Apple is reportedly reining in production of its cheaper iPhone

Nov 07, 2018, 02:05
Apple is reportedly reining in production of its cheaper iPhone

According to a Nikkei source, Apple's decision to reduce iPhone XR production came alongside an additional order of 5 million units for its older iPhone 8 and iPhone 8 Plus. And as a result, Apple's suppliers have canceled plans to ramp up production of the device.

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. Apple's array of color options were also expected to give consumers more of the choice they wanted. The XR model borrows its looks from the iPhone X and features an all-screen glass and aluminum design with a 6.1-inch Liquid Retina LCD display.

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A bunch of Apple's other Taiwanese suppliers fell sharply, including camera lens-maker Largan Precision Co, which was down more than 7 percent, and Flexium Interconnect, which fell 6 percent.

"The utilisation for the XR production is not reaching its maximum capacity now", the report added.

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The iPhone XR also managed to get glowing reviews, both from the critics and users, but it is still one of the pricier models, which may be affecting the smartphone demand. This is not the first time, five years ago, when Apple launched the iPhone 5C with plastic back, it had cut production orders a month after its launch, which fuelled speculation of weak demand for the model. The company killed the iPhone SE without so much as an announcement. And are you surprised by the low demand for the iPhone XR? Apple's willingness to raise its prices across the board is a testament to just how strong a product the iPhone X was. The publication notes that Apple had previously planned 20 million units for the older iPhone models this quarter, but raised the figure to 25 million units.

Meanwhile the iPhone 8 has profited significantly from the weakness of the iPhone XR.

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Indeed, it was widely hailed as the unexpected hit of Apple's 2018 iPhone event.