Apple cancels iPhone XR production boost due to low demand

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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.

According to a report in the Nikkei, however, things may not have been quite so enthusiastic in stores.

The iPhone XR might be too good to ignore, based on in-depth reviews, battery life ratings, and rigorous durability tests, but it seems that's precisely what a lot of potential buyers are doing.

Foxcomm originally planned to use 60 production lines for the handset but will only use 45 now.

Pegatron apparently faces a similar situation, suspending plans to ramp up production of the iPhone XR and simply awaiting further instructions from Apple at this time. Reportedly, Apple has instructed three separate suppliers to either reduce or completely eliminate production expectations for the new device.

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.

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

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. The math makes sense, as they are up to 20% cheaper than the iPhone XR's 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.

Last Friday, Apple shares had fallen sharply, dragging the United States tech major's market value below $1 trillion after the company forecast softer-than-expected sales for the holiday quarter and fueled nerves over iPhone sales by saying it would no longer release the figures.

This information may help explain why Apple provided a dim forecast for iPhone sales in the current quarter.

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