Report: iPhone XR Sales are Much Softer Than Expected
- Paul Thurrott
- Nov 05, 2018
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Apple’s new iPhone XR has apparently gotten off to a slow start. So Apple is canceling plans to boost production over the holidays.
The report, in Nikkei, states that demand for the iPhone XR has been “disappointing.” And as a result, Apple’s suppliers have canceled plans to ramp up production of the device. And will instead supply Apple will far fewer iPhone XR handsets than originally expected.
Key data from the report includes:
- Apple has told its top smartphone assemblers—Foxconn and Pegatron—“to halt plans for additional production lines dedicated to the new iPhone XR.”
- Foxcomm originally planned to use 60 production lines for the handset but will only use 45 now. As a result, Foxconn will build 100,000 fewer units every single day than would have happened under Apple’s original order.
- Other iPhone manufacturers face similar issues. They are “suspending plans to ramp up production and awaiting further instructions from Apple.”
- Apple had asked Wistron, one of its smaller manufacturing partners, to “stand by” in case iPhone XR demand exploded. But Wistron now expects to “receive no orders for the iPhone XR this holiday season.”
Tied to this is the unexpected news that demand of the previous-generation iPhone 8, which Apple still sells, has jumped. These phones are about 20 percent less expensive than the iPhone XR.
“Suppliers of iPhone 8 and iPhone 8 Plus are getting a combined order of around 5 million more units,” one source told Nikkei. The publication notes that Apple had previously planned 20 million units for the older iPhone models this quarter, but raised the figure to 25 million units.
This information may help explain why Apple provided a dim forecast for iPhone sales in the current quarter. With more customers choosing less expensive and older iPhones, Apple will have trouble raising the average selling price (ASP) of the device lineup, in keeping with its new strategy, which I call “Apple Jacks.”
This, combined with the rapid rise of China-based handset makers like Huawei, may also help explain why Apple will no longer provide iPhone unit sales figures: The firm is no longer the number two player in the smartphone market and may fall to number four or five in the coming year by unit sales.
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Conversation 42 comments
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Stooks
<p>If true, which is a BIG IF since Nikkei has gotten this kind of thing wrong 5 out of the last 6 years or something like that, like they did with the X (tracking suppliers to comment on demand)….anyhow if true this is very bad news for Apple.</p><p><br></p><p>The XR was predicted to be the smash hit of this iPhone season, outselling all the rest since is was a cheaper "X" class phone.</p><p><br></p><p>With flat iPhone growth, Apple pulling future numbers, the new Macbook Air a complete joke and with the price of everything Apple going up and up and up……are we seeing Apple peak? Even if so it would be very long ride down to whatever they would end up at.</p><p><br></p><p>Personally my 2017 15inch Macbook is my very last and thankfully my work paid for it.</p><p><br></p><p>Apple is going to push a iOS Macbook in the future but the timing of that is super critical. They have to do it when iOS can really take over as a computer for 90% of people and sadly I can't even come close to doing my job on iOS even with a new $2300 iPad Pro. (top of the line with keyboard and pencil). If they push it too early and kill of the Intel Mac's it could flounder big time.</p>
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PeterC
<p>if they deploy 0 % interest free credit options then there's definitely too low sales numbers. I shall wait and see as I fancied an XR. Cant pass up a 0% offer if it happens.</p>
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PeterC
<blockquote><em><a href="#360944">In reply to Chris_Kez:</a></em></blockquote><p>UK – apple finance offers in UK tend to be 14.9%. I reckon if sales are slow there will be a 0% offer but we're so close to xmas I reckon it might not happen till January, unless sales really are slow. </p>
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skane2600
<p>All things have limits, including the amount of money one can charge for a product. Apple has been pushing this limit successfully for a long time, but even they can't overcome the inevitable. </p>
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skane2600
<blockquote><em><a href="#360975">In reply to unkinected:</a></em></blockquote><p>A company hyped as much as Apple has been by the media is also going to see the downside of it. Apple certainly hasn't had any trouble making money in recent years, but dropping first from number 1 to number 2 and now dropping to 3, doesn't IMO qualify as blowing away everyone's expectations. </p>
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skane2600
<blockquote><em><a href="#361396">In reply to Jeffsters:</a></em></blockquote><p>I'm not sure what the definition of a "meaningful" profit is supposed to be, but companies don't usually continue to make a type of product for years without making any money. If Apple hadn't considered Samsung a threat, it's unlikely they would have sued them.</p><p><br></p><p>It's funny how some Apple fans argue both that Apple products aren't expensive compared to similar offerings from other companies and yet claim that Apple is the only one making money.You would expect those scenarios to be mutually exclusive.</p>
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Stooks
<blockquote><em><a href="#360976">In reply to MikeGalos:</a></em></blockquote><p>I read and article today that talked about Apple's "services" revenue/success. 9 BILLION of that came from Google this year to be the default search engine. Subtract that from the total and how successful is it? Next year that payment goes up to 12 BILLION!</p><p><br></p><p>A couple of really scary things come from that. </p><p><br></p><p>First Google is not a charity if they can afford 9 and 12 Billion just to be the default search in iOS they are making some serious money off of those search queries. Basically our data.</p><p><br></p><p>Second, like China, Apple has ZERO problem with selling that to Google…..so much for their "privacy" stance which is nothing but convenient BS since all of their money comes from high hardware sale margins.</p><p><br></p><p>I own a Apple phone because it is the lesser of two bad choices to be honest. I will never use a iPad to do work and I will never pay for one either. The one I have was gifted to me and its nothing but a Netflix/Hulu, Prime video, Kindle device.</p><p><br></p>
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provision l-3
<p>Jan 5th 2016 Nikkei reported iPhone 6s orders were cut. </p><p>Dec 30th 2016 Nikkei reported iPhone 7 orders were cut.</p><p>Oct 20th 2017 Nikkei said iPhone 8 orders were cut. </p><p>Jan 29th 2018 Nikkei said iPhone X orders were cut. </p><p><br></p><p>None of those ended up actually being accurate. So iPhone Xr orders could be cut but I'm taking the news with a grain of salt. </p><p><br></p>