Apple Cancels Plans to Boost iPhone XR Production

Report: Apple cancels iPhone XR production boost

Apple cancels iPhone Xr production boost

Apple Inc. has told Foxconn and Pegatron to halt plans for additional production lines dedicated to iPhone XR, the Nikkei reports, citing unidentified people familiar with the matter.

There are three quotes by anonymous sources in the report that gets to the heart of the matter.

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With regards to the growing uncertainty caused by the US-China trade disputes, Tung said Pegatron, being a technology company with global deployments, does not see it necessary to relocate its production capacity completely out of China, noting that a 3% capacity relocation might be sufficient.

Yet Nikkei is also reporting that while Apple may be choosing not to initiate extra reserved production lines for the iPhone XR, the company is boosting its production of the iPhone 8 and iPhone 8 Plus this quarter by an extra 5 million units.

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The analyst predicts the company's Services business, which includes its App Store, Apple Music, and Apple Pay offerings, will grow 20% annually and rise more than $50 billion in sales by fiscal 2020.

Separately, Apple's stock was downgraded for the second time since its earnings report, this time by Rosenblatt Securities, which said it has lowered its expectations for iPhone production and shipments, CNBC reported here on Monday. And this isn't an Apple thing. History is littered with "Apple cuts production" headlines that meant little. However, it doesn't bode well that the device is seeing such little demand, especially when you consider it delivers the same speed as the iPhone XS with many similar features - at a much lower cost. Apple is still selling the previous generation iPhone and is now producing it again in larger quantities. And it's only achievable by having overcapacity at launch. These two models are roughly 20% cheaper than Apple's new iPhone XR which is available in the U.S. at a starting price of $749. "Last year, Apple gave rush orders for the iPhone 7 series following the launches of the iPhone 8 series and premium iPhone X", the Japanese financial newspaper said.

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