Apple signals poor demand for iPhone XR as suppliers asked to halt additional production lines: Report
Apple had also asked Wistron, a smaller iPhone assembler, to stand by for rush orders, but the company will receive no orders for the iPhone XR this season.
Apple has told its smartphone assemblers Foxconn and Pegatron to halt plans for additional production lines dedicated to the iPhone XR which launched last month, the Nikkei reported on Monday.
Apple had also asked Wistron, a smaller iPhone assembler, to stand by for rush orders, but the company will receive no orders for the iPhone XR this season, the report said, citing supply chain sources.
"For the Foxconn side, it first prepared nearly 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 Nikkei quoted a source as saying.
At its iPhone launch event in September, Apple introduced the lower-cost iPhone XR, made of aluminum, along with two other models, the XS and XS Max.
Five years ago, Apple cut production orders for its plastic-backed iPhone 5C a month after its launch, fueling speculation of weak demand for the model.
The Cupertino, California-based company warned last week that sales for the crucial holiday quarter would likely miss Wall Street expectations.
"The utilisation for the XR production is not reaching its maximum capacity now," the report added.
Apple did not immediately respond to Reuters' request for comment. Foxconn and Pegatron each said they would not comment on specific customers or products.
According to the report, Apple is now requesting more production of the older iPhone models including iPhone 8 and iPhone 8 Plus. These two models are roughly 20% cheaper than Apple's new iPhone XR which is available in the US at a starting price of $749.
"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. Apple is also said to have revised planned units for older iPhone models for this quarter from 20 million to 25 million.
Interestingly enough, Apple reported a strong September quarter, registering $62.9 billion in revenue. The strong quarter, however, was driven by the older models, iPhone 8 and iPhone X.
(With inputs from HT Correspondent)