Apple Struggles With iPhone XR Demand And Cuts Back Production
As we're starting to settle down after Apple's quarterly and annual earnings release last week, it's looking as if there's trouble in the iPhone world. At its latest earnings report, not only did Apple (NASDAQ:AAPL)share less-than-optimistic forecasts for its first quarter of 2019, but the company also announced its intention to stop sharing figures of iPhone units shipped. Now, it's looking as if the latter decision might be related to some market problems. Take a look below for more details.
Apple Cuts Down Supply Orders For The iPhone XR; Analysts Suspect Weak Demand Is The Motive Behind This Move
Prior to Apple's 2018 iPhone launch, the rumor mill correctly predicted that the Cupertino tech giant will launch a new entry-level iPhone with a 6.1" LCD panel. Apple has struggled to incite older users to an upgrade, and the iPhone XR was expected to fulfill this purpose. However, the Japanese Nikkei is out with a fresh report today, which suggests that things might not be going as planned for Apple.
According to the publication's sources, Apple has ordered two of its manufacturing partners, Foxconn and Pegatron, to scale back on iPhone XR production. Foxconn had set aside 60 production lines for the iPhone XR but is using only 45 of them. Furthermore, Apple's cutback of orders will mean that the contract manufacturer will decrease its output approximately by 100,000 units produced per day.
Not only is the iPhone XR failing to reach maximum production capacity, but Apple continues to face the problem of older iPhone models continuing to cannibalize sales of newer models. Another source believes that Apple (NASDAQ:AAPL) revised its production demand for the iPhone 8 and iPhone 8 Plus upwards by 5 million. While the company had expected to produce 20 million units this quarter but has now raised this number to 25 million.
If this report is accurate, then it looks as if Face ID and new colors have failed to attract a sufficient amount of users. Of course, Nikkei has been wrong in the past with such reports, but this alone is insufficient to cast doubt on the authenticity of today's claims. Thoughts? Let us know what you think in the comments section below and stay tuned. We'll keep you updated on the latest.