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Home / Technology / The demand for iPhone XR forced Apple to cut production expansion plans

The demand for iPhone XR forced Apple to cut production expansion plans



After seeing allegedly weak demand for the iPhone XR, Apple told assembly partners Foxconn and Pegatron to abandon the company's new smartphone production line preparations specifically for the recently introduced model.

  Apple boss Tim Cook in a Chinese Foxconn factory.

Apple boss Tim Cook in a Chinese Foxconn factory.

The iPhone XR, Apple's latest iPhone version from late October, is available for a limited time only. While the production of key products could lead to an expansion of production to cope with increased demand, similar plans to do the same for the new iPhone were scrapped as well.

A source familiar with the situation. Nikkei Asian Review "The Foxconn site initially produced nearly 60 assembly lines for Apple's XR model, but recently only about 45 production lines were used as the main customer." It must be said that there are not that many

It is claimed that the reduction would mean that Foxconn would produce around 1

00,000 fewer units per day, which is between 20 and 25 percent lower than the original optimistic outlook, according to the source. "

Pegatron, Apple's other major iPhone XR assembler, is also expected to suspend production plans and is waiting for more information from Apple. "The capacity utilization for XR production is not reaching its maximum capacity," the source said.

Wistron, the third iPhone installer, has previously been asked to rush as needed. However, the source of the supply chain suggests that no orders will be transmitted to the company over the holidays.

One month before the release of the iPhone XR, a report said Apple planned to increase production after the first launch phase and into December, with the model expected to account for 50 percent of production.

Analysts estimated the first sale of around 9 million units on the first weekend, beating the introduction of the iPhone 8, but Jun Zhang von Rosenblatt Securities recommended investors who he believed were "weak pre-orders" and would reduce production in November and December for all new models.

While iPhone XR orders are reported to decline, Apple is apparently demanding more iPhone 8 and iPhone 8 Plus phones to be produced.

"Suppliers of iPhone 8 and iPhone 8 Plus will together receive an order from some 5 million additional units," a report said. Previously, the report was set at 20 million units. As a result, total orders for Foxconn and Pegatron for both older models will be increased to up to 25 million units.

Apple will now check weekly the demand for iPhones, the source added, to quickly adapt the orders to the market.

Changes in post-launch production levels are not an unexpected phenomenon as manufacturers typically try to produce enough to meet demand without producing too many or too few units. Since the source of such stories comes from unnamed sources within the supply chain, and sometimes with different reports between the publications, there is no guarantee that the reduction claims will actually apply.

In particular, the Nikkei Asian Review has a mixed track record regarding details of Apple's production schedules. It is also not clear how "cuts" can now be compared to previous seasonal adjustments.


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