IPhone: Apple cancels production boost for iPhone XR

Isaac Cain
November 6, 2018

Sporting a almost edge-to-edge display at a price point that is drastically lower than Apple's iPhone XS models, many analysts have been predicting that the iPhone XR will be a runaway hit this holiday shopping season.

According to a report by Nikkei Asian Review, the most affordable iPhone of 2018 is definitely not doing as well, sales-wise, as Apple anticipated it would.

Apple has told its top smartphone assemblers-Foxconn and Pegatron-"to halt plans for additional production lines dedicated to the new iPhone XR".

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. So Apple is canceling plans to boost production over the holidays.

The iPhone XR - priced starting at $749 - is meant to replace the iPhone 8 introduced a year ago. The move will reduce total possible iPhone XR production by 100,000 units per day over the next few months, according to the report.

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It's too early to tell if the iPhone XR will have a similar fate as the iPhone 5C. It's possible, for instance, that overall iPhone demand is down and Apple is reducing its production costs.

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.

Interestingly, the iPhone 8 and iPhone 8 Plus have had orders increase by more than 5 million units.

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. That's down 20% to 25% compared to Apple's most optimistic prognosis.

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