Apple’s iPhone XR isn’t a runaway hit despite its budget-friendly nature. Two major assemblers were instructed by the Cupertino-based company to reduce production, according to Nikkei.
The report claims that, due to an underperforming opening weekend, Apple asked Foxconn and Pegatron to create a dramatically lower number of units until demand picks up. It wasn’t expected to be so sluggish out of the gate, but there’s still an opportunity for momentum to pick up around the holidays when shopping increases. Apple should be far from worried at the moment.
One source told Nikkei about the response from suppliers:
“For the Foxconn side, it prepared nearly 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.”
Foxconn’s transitioned its mass production on the iPhone XR to be as much as 25% lower than originally projected.
If anything, it’s a sign that older iPhone models are remaining popular or customers are hanging onto their current smartphones longer than usual. Another source said the iPhone 8 has received a bump in production while iPhone XR orders go down.
The earnings report for FY18 Q4 wasn’t brutal, but it did tell us that Apple’s hardware might not be moving as quickly as it once did. In fact, Tim Cook confirmed it won’t share unit sales any longer. Apple will stay quiet on how many units of iPhone, iPad, and Mac are sold.
Again, Apple shouldn’t be in a panic. It’s only when unit sales for all hardware face steady declines on a quarterly basis that anyone will feel concerned. Let’s give the iPhone XR, in particular, more time to breathe.