IPhone XR Sales are Much Softer Than Expected

Saul Franklin
November 8, 2018

Apple had introduced the iPhone XR, made of aluminum, along with two other models, the XS and XS Max, in September this year. Even more alarming, the report claimed that overall production might drop by as much as 25%.

Cutting corners: iPhone manufacturers are not able to make full use of their production capabilities and are closing down unneeded assembly lines.

Apple may have made a boatload of money in the July - September 2018 quarter, managing to considerably boost its share of United States smartphone sales before the iPhone XR was even released, but it's not all rosy in the Cupertino camp. And will instead supply Apple will far fewer iPhone XR handsets than originally expected. As a result, Apple has reportedly cancelled the production boost that it was likely to give after the smartphone hit the shelves.

Apple's Asian suppliers tanked after a bruising day of trading after a negative report about the iPhone XR sent Apple tumbling.

"Suppliers of iPhone 8 and iPhone 8 Plus are getting a combined order of around 5 million more units", Nikkei report quotes a source as saying.

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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".

"The utilization for the XR production is not reaching its maximum capacity now", the source said.

Maybe iPhone sales decline over time, or maybe Cupertino has something to hide.

Apple closed just above $200 amid a wider tech sell-off which has seen other FAANG stocks fall in recent weeks. With more customers choosing less expensive and older iPhones, Apple will have trouble raising the average selling price (ASP) of the device lineup, in keeping with its new strategy, which I call "Apple Jacks".

For starters, the claim that iPhone XR demand is exceedingly below expectations runs somewhat counter to a previous report from reputed analyst Ming-Chi Kuo who just recently raised his iPhone XR sales estimate for the December quarter.

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