Sci-tech

Apple cancels iPhone Xr production boost

Apple cancels iPhone Xr production boost”

Pegatron has already solved the issue of labor shortage at its plants in China and has made prompt shipments allowing its major brand client to start delievering its new smartphone models in late October, according to company chairman TH Tung.

The Nikkei report comes days after Cupertino, Calif. -based Apple warned in its quarterly earnings report that sales for the crucial holiday quarter would likely miss Wall Street expectations. And as a result, Apple's suppliers have canceled plans to ramp up production of the device. However, it is now using only around 45 lines and does not require any additional production capacity.

It looks like the iPhone XR is not doing as well as analysts and Apple had expected. According to Nikkei, this means that Foxconn will be producing almost 100,000 units less every day based on the new forecasts available.

Apple shares fell almost 4 percent after a report signaled that its new, lower-priced iPhone XR might not be selling as well as expected. It's possible, for instance, that overall iPhone demand is down and Apple is reducing its production costs.

Tied to this is the unexpected news that demand of the previous-generation iPhone 8, which Apple still sells, has jumped. Weakened demand for smartphones globally might not hurt Apple's revenue too much, but suppliers could feel the strain. The math makes sense, as they are up to 20% cheaper than the iPhone XR's starting price of $749.

Last Friday, Apple shares had fallen sharply, dragging the U.S. 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. Apple has ordered 5 million more iPhone 8 and 8 Plus units this quarter, bringing the total to 25 million. During that call, Apple also - for the first time ever - neglected to give iPhone sales numbers for the quarter.



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