Apple slashes iPhone XR production orders as demand fails to meet expectations

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It's possible iPhone XR demand isn't meeting Apple's expectations, but exactly the reason that's happening is hard to determine.

Apple's iPhone XR was the third model the company unveiled in September.

Apple's Asian supplier and assembler stocks fell on Tuesday on a media report that the iPhone maker had told its smartphone assemblers to halt plans for additional production lines dedicated to its new iPhone XR.

Apple shares fell almost 4 percent after a report signaled that its new, lower-priced iPhone XR might not be selling as well as expected.

The latest iPhone may be one of the hottest flagships this year, but it seems like Apple has miscalculated demand for the product if a report from Nikkei is accurate.

All in all, if Apple really is opting to not enable extra production lines for the iPhone XR it means around 100,000 fewer iPhone XR models will be produced every day during the next few months. At Foxconn, only 45 production lines of the planned 60 are now being used.

Tied to this is the unexpected news that demand of the previous-generation iPhone 8, which Apple still sells, has jumped.

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 math makes sense, as they are up to 20% cheaper than the iPhone XR's starting price of $749. Instead, insiders in the supply chain claim, there'll be no need for its iPhone XR manufacturing capacity to meet Apple's holiday season forecasts. Apple is also said to have revised planned units for older iPhone models for this quarter from 20 million to 25 million.

Apple shares dipped as much as 4.5 per cent to hit an intraday low of $198.17 in early deals, from the previous close of $207.48. "Last year, Apple gave rush orders for the iPhone 7 series following the launches of the iPhone 8 series and premium iPhone X", the Japanese financial newspaper said.

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