Apple reportedly cancels production boost for the iPhone XR

Apple reportedly cancels production boost for the iPhone XR

Apple reportedly cancels production boost for the iPhone XR

While Apple had great expectations for the iPhone XR, it's now ordering more iPhone 8 and 8 Plus models from its partners.

Foxconn initially built out 60 assembly lines for the iPhone XR, expecting extremely high demand for the unit.

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.

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However, to enhance the company's global deployment, Tung said that Pegatron is studying the feasibility of producing in the Southeast Asia region and will make some adjustments if necessary.

Apple shares fell almost 4 per cent on Monday after the report from the Nikkei financial daily, which fuelled concerns that the iPhone XR - the cheapest of three iPhones unveiled in September - was facing weak demand just days after it hit shelves.

"We caution investors not to lose sight of the massive metamorphosis on the horizon at Apple being led by the services business", Ives wrote in a research report published Monday. 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". That's down 20% to 25% compared to Apple's most optimistic prognosis.

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It's too early to tell if the iPhone XR will have a similar fate as the iPhone 5C.

In contrast, the iPhone XR's $750 starting price made it seem a relative bargain.

The analyst predicts the company's Services business, which includes its App Store, Apple Music, and Apple Pay offerings, will grow 20% annually and rise more than $50 billion in sales by fiscal 2020. During that call, Apple also - for the first time ever - neglected to give iPhone sales numbers for the quarter.

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