Apple cancels iPhone XR production boost

Report: Apple cancels iPhone XR production boost

Report: Apple cancels iPhone XR production boost

Taiwanese assembler Pegatron Corp fell almost 4 per cent and rival Hon Hai Precision Industry Co Ltd (Foxconn) fell 2.5 per cent. Apple is widely considered the biggest customer for Foxconn.

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.

Foxconn, the world's largest contract electronics manufacturer and the leading iPhone XR assembler, is apparently using "only around 45 production lines" of a prepared total of 60 to manufacture its share of Apple-requested units.

However, it looks like the iPhone XR isn't selling as well as Apple might have hoped, according to a new report from Nikkei Asian Review. As a result, Foxconn will build 100,000 fewer units every single day than would have happened under Apple's original order.

The company's decision to not expand production lines doesn't necessarily suggest problems.

Last year, Apple had to face one of the most controversial year endings when the infamous performance throttling feature was discovered to bog down older iPhones.

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"For the Foxconn side, it first prepared almost 60 assembly lines for Apple's XR model, but recently uses only around 45 production lines as its top customer said it does not need to manufacture that many by now", a source told the Japanese financial paper.

It's too early to tell if the iPhone XR will have a similar fate as the iPhone 5C.

Ives reaffirmed his $310 price target for Apple's stock, representing more than 50% upside to the current stock price.

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

Suppliers of the 8 and 8 Plus have received a combined order of around 5 million more units.

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.

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