According to a report Monday by Japan's Nikkei, Apple "signaled disappointing demand" for the iPhone XR by informing manufacturing partners Foxconn and Pegatron to halt plans for additional production lines of the smartphone targeted at price-conscious consumers.
Apple shares fell almost 4 per cent after the report, which fueled concerns that the iPhone XR, the cheapest of three iPhones Apple unveiled in September, was facing weak demand just days after it hit shelves.
Apple reportedly told three different suppliers to reduce or completely eliminate production lines for the device. This means that Foxconn might only produce some more 100,000 units daily to reflect the new demand outlook.More news: Messi could play, but Barca coach taking ‘no risks’ at Inter
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Other iPhone manufacturers face similar issues.
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. Apple has also asked smaller iPhone assembler Wistron to be on standby for rush orders. And at a starting price of $749, it's the most affordable new iPhone on store shelves. The publication notes that Apple had previously planned 20 million units for the older iPhone models this quarter, but raised the figure to 25 million units. The company forecasted fiscal-first-quarter sales of $89 billion to $93 billion versus the average analyst projection of $93.02 billion.
Apple announced it has taken $62.9bn (£48.2bn) in revenue for Q4 2018, an increase of 20 per cent ($52.5m) year-on-year. This is not the first time, five years ago, when Apple launched the iPhone 5C with plastic back, it had cut production orders a month after its launch, which fuelled speculation of weak demand for the model.