Published: Tue, November 06, 2018
Industry | By Faith Ward

IPhone XR isn't selling as well as Apple anticipated, production reportedly cut

IPhone XR isn't selling as well as Apple anticipated, production reportedly cut

Last year, we saw a number of stories from trusted publications claiming that Apple's iPhone X had hit early production problems or that it wasn't selling particularly well.

The data points to strong sales right out of the gate thanks to the September release of the newest and most premium versions of Apple's signature smartphone, which helped spur market share growth in Australia (up 3.8 percentage points), in China (up 1.3 percent points) and especially in its home market where strong iPhone 8 and 8 Plus sales are apparently helping that trend along. This has led the company to cancel a so called "production boost" for the model.

A source familiar with the matter said: "for the Foxconn side, it first prepared almost 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". It's possible iPhone XR demand isn't meeting Apple's expectations, but exactly the reason that's happening is hard to determine.

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

Foxconn production of the iPhone XR is said to be down as much as a quarter from the original goal. While the iPhone XS and iPhone XS Max are undoubtedly powerful and, with their OLED screens and dual cameras, capable, they're also expensive. Apple has also asked smaller iPhone assembler Wistron to be on standby for rush orders. Apple has ordered 5 million more iPhone 8 and 8 Plus units this quarter, bringing the total to 25 million.

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.

The report follows Apple's decision last week to stop providing unit-sales figures in its quarterly earnings, making it even more hard going forward to determine individual unit success.

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