Apple cancels production boost for iPhone Xr

The iPhone XR may not be selling as well as Apple hoped.                  Ian Knighton  CNET

The iPhone XR may not be selling as well as Apple hoped. Ian Knighton CNET

According to a report in the Nikkei, however, things may not have been quite so enthusiastic in stores.

Apple has canceled the additional production lines for its budget iPhone XR meant to cover the original expected demands for the phone, reported the Nikkei Asian Review.

Both Foxconn and Pegatron are used by Apple to assemble its smartphones, alongside Wistron. All told, Nikkei's source claims that overall iPhone XR production may be anywhere from 20% to 25% lower than initial estimates.

Meanwhile, Pegatron, which is another key partner of the Cupertino-based tech giant, has had to "suspend plans to ramp up production", now "awaiting further instructions", according to supply chain sources that are typically right about these things.

The drop in Apple's shares since last Thursday has cut its market cap by more than $100 billion.

"The utilisation for the XR production is not reaching its maximum capacity now", the report added. And then there is the "affordable" iPhone XR that starts at Rs 76,900 for base model, and goes all the way up to Rs 91,900.

Apple had also asked Wistron, a smaller iPhone assembler, to stand by for rush orders, but the company will receive no orders for the iPhone XR this season, the report said, citing supply chain sources. So it looks like customers are considering those the true lower-priced alternatives to the XS and XS Max, and not the XR.

In contrast, the iPhone XR's $750 starting price made it seem a relative bargain. According to the report, demand is still strong for those models and Apple not expects to produce 25 million iPhone 8 and iPhone 8 Plus units during the fourth quarter.

The company's stock drop - pushing Apple's market cap below $1 trillion - comes after shares closed down 6.6% last Friday, to $207.48 per share, as investors reacted to the September quarter earnings results with lower iPhone unit sales and weaker-than-expected December quarter revenue guidance.

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