Plans for additional production lines for the iPhone XR halted by Apple: Report
Apple has told its primary smartphone assemblers Foxconn and Pegatron to halt any plans for additional production lines dedicated to the budget iPhone XR model, according to industry sources. This is because Apple is sensing lesser than anticipated demand for the iPhone XR that was launched in late October.
Industry sources say that given the expected boost in iPhone shipments that the XR was supposed to provide, Foxconn had already allocated 60 dedicated assembly lines for this model. However, that number has been cut down to 45 as Apple feels that the demand is not that high as of now. This would result in a 20 to 25% reduction (about 100,000 units) in the number of daily produced units. Another supply chain source has indicated that Pegatron also faces a similar situation and it has suspended plans for ramping up iPhone XR production for now. Further plans would depend on instructions from Apple. Wistron is another of Apple's iPhone assemblers, albeit a smaller one, and it has been told to be on standby for rush orders but it is unlikely to receive any iPhone XR orders for this holiday season.
The iPhone XR was announced alongside the iPhone XS and the iPhone XS Max in September this year. The lower entry cost of the iPhone XR was expected to provide Apple with increased shipment volumes and consequently, more revenue from its software services such as Apple Music. Interestingly, Apple has ordered increased production of around 5 million additional units of last year's iPhone 8 and iPhone 8 Plus (to a total of 25 million units), which are retailing cheaper than the iPhone XR's starting price of US$749.
According to sources, Apple will be reviewing the demand for the iPhone weekly and adjust production accordingly. The news of lowered iPhone XR production comes on the heels of Apple's stock plunging below the US$200 mark following a lowered sales forecast for the holidays and the revelation that Apple will henceforth not be disclosing the actual hardware sales figures for the iPhone, iPad, and MacBook.