Apple Had To Cut Production Of iPhone XR Due To Poor Demand

Apple told Pegatron and Foxconn, its phone manufacturers, to cancel plans for iPhone XR's additional lines of production because of low demand for this model.

In late October, Apple released the iPhone XR. However, both Apple and industry analysts seemed to overestimate the iPhone XR demand. Nikkei Asian Review reported that Apple told its main phone assemblers to cut back the production of the device.

Based on the latest available data, the actual manufacturing initially set up 60 production lines specifically for this device and it's actually been reduced to 45 production lines. So they shut down 15 production lines for the XR. This also means:

Apple's manufacturers have been ahead with plans to expand production to cope with a surge in demand for iPhone XR. However, these visions seem to be scrapped. The company's main assembler, Pegatron,  temporarily cut down production of iPhone XR because it doesn't reach the maximum capacity. And Wistron, which is a smaller assembler, also said:

However, the fact that Wistron didn't receive any planned orders for the iPhone XR over the holidays.

  Apple struggle with the iPhone XR demand 

As the initial sales, the iPhone XR actually beats the iPhone 8 and 8 plus. In fact, Apple sold around 9 million iPhone XR’s units in the first weekend. Nonetheless, Rosenblatt Securities' Jun Zhang said, “iPhone XR pre-orders have been weaker than our expectations”. He also added that Apple may reduce its iPhone XR production for November and December.  Apple is said to be considered to adjust the supply ratios of the devices due to higher demand.

On the other hand, the iPhone 8 and 8 plus sales are actually increasing. So this implies that the 8 and 8 plus is definitely a better phone and people find it more valuable than the XR. Apple’s suppliers have received a combined of order book around  5 million units for the iPhone 8 and 8 plus. To be more specific, Apple has projected production of  20 million units for the iPhone 8 and 8 plus. However, the total number has now raised up to 25 million mainly due to the high demand.