Apple Reportedly Cancels Plans for Major iPhone XR Ramp

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Apple's lower-priced XR model was expected to be popular over the holiday season, luring owners of older iPhones to upgrade.

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. And as a result, Apple's suppliers have canceled plans to ramp up production of the device.

Tung's remarks are tantamount to a denial of rumors that claimed Apple had lowered the proportion of iPhone XR orders allocated to Pegatron to 35%, and switched more orders to Foxconn Electronics, as Pegatron's production had been affected by shortages of labor and some key components.

Apple has informed several of its suppliers that expectations should be tempered for orders of the Apple iPhone XR. At Foxconn, only 45 production lines of the planned 60 are now being used. This means that Foxconn might only produce some more 100,000 units daily to reflect the new demand outlook.

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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In contrast, the iPhone XR's $750 starting price made it seem a relative bargain.

Apple had asked Wistron, one of its smaller manufacturing partners, to "stand by" in case iPhone XR demand exploded.

This information may help explain why Apple provided a dim forecast for iPhone sales in the current quarter. It's also possible that more people are opting for other iPhones, leaving Apple to modify its original plan.

Five years ago, Apple cut production orders for its plastic-backed iPhone 5C a month after its launch, fueling speculation of weak demand for the model.