Slower-than-expected demand has reportedly led Apple to direct its top phone assemblers, Foxconn and Pegatron, to halt a planned production boost for iPhone XR, a relatively cost-effective model that hit the shelves late last month.
Foxconn, a Taiwan-based company, would produce around 100,000 fewer units daily to reflect the new demand outlook, down 20-25 per cent from the original optimistic outlook, Japanese financial paper Nikkei reported on Monday citing anonymous 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,” a source told Nikkei.
Fellow Taiwanese manufacturer Pegatron is also suspending plans to ramp up production, the report said.
iPhone XR debuted alongside the iPhone XS and top-of-the-line XS Max.
While the demand for iPhone XR appears to have not met Apple’s expectations, the Cupertino, California-headquartered tech giant is requesting more of the older iPhone 8 and iPhone 8 Plus models, which are up to 20 per cent cheaper than the XR’s starting price of $749.
“Suppliers of iPhone 8 and iPhone 8 Plus are getting a combined order of around five million more units,” one source told Nikkei.