Nikkei: Apple has told suppliers to cancel their plans for additional production lines for the iPhone XR

Apple has asked iPhone manufacturers to suspend their plans for additional production lines dedicated to the iPhone XR, a new report said Monday.

According to sources cited by Nikkei Asian ReviewApple has informed Taiwan's smartphone manufacturers Foxconn and Pegatron of the cancellation, which the report said indicated a "disappointing demand" for Apple's flagship low-cost model launched last month.

"Foxconn first prepared nearly 60 assembly lines for Apple's XR model, but has only recently used 45 production lines, and its main customer has it. said: he does not need to make as many now, "said a source close to the situation. .

This means that Foxconn, the Taiwanese company marketed as Hon Hai Precision Industry, would produce about 100,000 fewer units a day to reflect the new demand outlook, down 20% to 25% from optimistic prospects. initials, said this person.

For its part, Pegatron said that the iPhone assembler would suspend its production plans and wait for further instructions from Apple, according to the same source. Nikkeisupply chain sources of.

Apple would also have asked the smaller iPhone assembler, Wistron, to be ready for urgent orders, but NikkeiAccording to sources, the company will not receive any orders for the iPhone XR this holiday season.

NikkeiThe report on iPhone supplies has been disappointing in recent years, Apple's claims to reduce production orders for iPhone due to weak demand being at odds with subsequent sales figures.

The latest report also opposes recent remarks by analyst Apple Ming-Chi Kuo, who said that iPhone XR pre-order request in the first three days of availability of the device was "better than that" of the iPhone 8 and iPhone 8 More during the same period last year.

Kuo said that although pre-order demand immediately after launch was lower iPhone XR compared to the flagship models of the iPhone XS, overall iPhone XR The momentum of shipments is "more stable" because it will encourage more customers to upgrade than iPhone 8 series over time.

On the other hand, some analysts have expressed concern that the iPhone XRThe high availability of the product after launch implied low handset sales of $ 749.

In addition, Apple's revenue forecast for the first quarter of 2019, between $ 89 billion and $ 93 billion, was cautious, but Apple attributes this to foreign exchange costs, supply-demand balance issues, and emerging market weakness.

Apple CFO Maestri also explained that Apple had "some uncertainty" on the balance between supply and demand for the "unprecedented number" of new products that the company had launched over the past few years. last six weeks.

The timing of the launch of the new iPhones would also have played a role, the iPhone XR come later than the XS and the XS Max. This had an effect on the fourth quarter business of Apple and should also affect the first quarter.