Apple cancels iPhone XR production boost

Apple cancels iPhone XR production boost

Apple has told its top smartphone assemblers-Foxconn and Pegatron-"to halt plans for additional production lines dedicated to the new iPhone XR". "The utilization for the XR production is not reaching its maximum capacity now", Nikkei's source stated. Apple has ordered around 5 million more units of iPhone 8 and iPhone 8 Plus from suppliers, raising the total order to 25 million units this quarter, said the Nikkei report.

Before we dive into this, I want to recommend caution where Apple and iPhones are concerned. 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.

Healthy early sales of iPhone XS and iPhone XS Max models in the States are good news for Apple. Given the disparity between what we saw being said about the iPhone X previous year and its 12-month performance, some caution is clearly warranted.

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

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. 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. Most people don't buy as I do. Apple is widely considered the biggest customer for Foxconn. Weakened demand for smartphones globally might not hurt Apple's revenue too much, but suppliers could feel the strain.

"Combined with the continued strong momentum we're seeing among its iPhone 8 and 8 Plus, these sales have contributed to a 5.0 percentage point increase in OS share for Apple in the USA - the biggest gain seen worldwide this quarter. iPhone 8 was the top selling model in the United States over the quarter, with a 9.4% share of the handset market, and with iPhone XR launching outside this period we'd expect Apple share to tick up further towards the end of the year".

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