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Apple cancels iPhone XR production boost due to low demand
06 November 2018, 11:10 | Megan Pierce
The iPhone XR may not be selling as well as Apple hoped. Ian Knighton CNET
The $749 model is Apple's budget iPhone, and at a few hundred dollars cheaper than the flagship XS and XS Max was meant to stir consumer interest among more cost-conscious buyers.
Apple shares sank as much as 4.5% Monday following a report that the tech giant has scaled back production orders for its new entry-level iPhone XR model.
Throwing some cold water on that idea is a new report from Nikkei which claims that Apple is reducing iPhone XR production due to lower than anticipated demand. So Apple is canceling plans to boost production over the holidays. A source familiar with the matter said: "for the Foxconn side, it first prepared almost 60 assembly lines for Apple's XR model, but recently uses only around 45 production lines as its top customer said it does not need to manufacture that many by now". However, it is now using only around 45 lines and does not require any additional production capacity. As a result, Foxconn will build 100,000 fewer units every single day than would have happened under Apple's original order.
It's too early to tell if the iPhone XR will have a similar fate as the iPhone 5C.
Despite Apple hinting at a lesser performance deterioration compared to the older models, the feature will eventually tune down the CPU' performance to prevent the device from abruptly switching off. These phones are about 20 percent less expensive than the iPhone XR.
Apple said it would stop providing unit sales for iPhones, iPads, and Macs in fiscal 2019. Originally Apple had ordered 20 million of the last generation model but has since raised the order to 25 million.
Per usual, you might want to take Nikkei's report with a grain of salt, especially in light of analyst Ming-Chi Kuo's recent investor note detailing how iPhone XR sales in the holiday quarter may reach as high as 38 million units.
This information may help explain why Apple provided a dim forecast for iPhone sales in the current quarter.
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