Apple cancels iPhone XR production boost

Report: Apple cancels iPhone XR production boost

The iPhone XR is reportedly not selling as well as Apple and analysts predicted

All in all, if Apple really is opting to not enable extra production lines for the iPhone XR it means around 100,000 fewer iPhone XR models will be produced every day during the next few months.

Apple's market capitalisation (M-Cap) or market value slipped below the $950-billion mark as shares of the iPhone maker fell, news agency Reuters reported. Its cheaper build materials, colorful design, and emphasis on core features are in stark contrast with the luxury-minded Apple iPhone XS and XS Max.

Apple shares fell almost 4 per cent on Monday after the report from the Nikkei financial daily, which fuelled concerns that the iPhone XR - the cheapest of three iPhones unveiled in September - was facing weak demand just days after it hit shelves.

Tung's remarks are tantamount to a denial of rumors that claimed Apple had lowered the proportion of iPhone XR orders allocated to Pegatron to 35%, and switched more orders to Foxconn Electronics, as Pegatron's production had been affected by shortages of labor and some key components. It's possible, for instance, that overall iPhone demand is down and Apple is reducing its production costs.

One source who claims to be familiar with iPhone XR production told the publication that Foxconn initially prepared 60 assembly lines for the iPhone XR but only uses about 45. 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".

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A smaller third assembler, Wistron, originally tapped to be on standby for rush demands, will also reportedly not receive rush orders this season.

Other iPhone manufacturers face similar issues.

The Nikkei report comes days after Apple said sales for the usually busy holiday period would likely miss analyst expectations as sales in emerging markets including India were weak.

This information may help explain why Apple provided a dim forecast for iPhone sales in the current quarter.

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