Published: Wed, November 07, 2018
Hi-Tech | By Kristin Zimmerman

Apple cancels iPhone XR production boost

Apple cancels iPhone XR production boost

According to a Nikkei source, Apple's decision to reduce iPhone XR production came alongside an additional order of 5 million units for its older iPhone 8 and iPhone 8 Plus. The company reported an average selling price of $793 - a year-over-year increase of 28 percent. As per the source, this means Foxconn would be producing 100,000 few units of the iPhone XR daily than initially estimated - a decline of around 20-25 percent. The phone does appear to have ramped more slowly than some of Apple's previous flagships, but it became the bestselling phone through much of the first half of 2018.

Apple's lower-priced XR model was expected to be popular over the holiday season, luring owners of older iPhones to upgrade.

"History has shown all kinds of statements made about Apple supply chain and the endless predictions of slowing of iPhone and other Apple product sales have been wrong", said Feinseth, who rates Apple's stock a "strong buy".

"The utilisation for the XR production is not reaching its maximum capacity now", the report added. It's entirely possible that the reason Apple doesn't need very many XR's is that most customers are choosing the highest-end models or defaulting to the lower-end, cheaper products.

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.

As a reminder, iPhone XR sales began in the fourth quarter (last month), so we'll see a look at how they're affecting market share sometime in early 2019. "Starting with iOS 12.1, iPhone 8, iPhone 8 Plus, and iPhone X include this feature, but performance management may be less noticeable due to their more advanced hardware and software design", reads the support page. It's possible iPhone XR demand isn't meeting Apple's expectations, but exactly the reason that's happening is hard to determine. Originally Apple had ordered 20 million of the last generation model but has since raised the order to 25 million.

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