Apple cancels iPhone XR production boost due to low demand

Nichole VegaNov 06, 2018

However, Apple did indicate that it's a feature that will be part of all future iPhones, which has brought last year's gleaming iPhone models to suffer from the same wrath.

Monday's fall came after Apple told its smartphone assemblers Foxconn and Pegatron to halt plans for additional production lines dedicated to the iPhone XR which hit shelves in October, Reuters reported citing a Nikkei report. It's possible iPhone XR demand isn't meeting Apple's expectations, but exactly the reason that's happening is hard to determine. As a result, Foxconn will build 100,000 fewer units every single day than would have happened under Apple's original order.

Foxcomm originally planned to use 60 production lines for the handset but will only use 45 now.

Other iPhone manufacturers face similar issues.

Healthy early sales of iPhone XS and iPhone XS Max models in the States are good news for Apple.

Meanwhile, Pegatron, which is another key partner of the Cupertino-based tech giant, has had to "suspend plans to ramp up production", now "awaiting further instructions", according to supply chain sources that are typically right about these things. Instead, insiders in the supply chain claim, there'll be no need for its iPhone XR manufacturing capacity to meet Apple's holiday season forecasts.

In contrast, the iPhone XR's $750 starting price made it seem a relative bargain.

"Suppliers of iPhone 8 and iPhone 8 Plus are getting a combined order of around 5 million more units", Nikkei report quotes a source as saying. "The moves to add orders for year-old iPhone models while suspending extra production for the latest product illustrates Apple's lack of innovation and inability to energize consumers with such a pricing strategy". With more customers choosing less expensive and older iPhones, Apple will have trouble raising the average selling price (ASP) of the device lineup, in keeping with its new strategy, which I call "Apple Jacks".

If this all sounds familiar, you're probably thinking of the Apple iPhone 5C, which Apple launched five years ago.

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