In a bid to call off a production boost for the iPhone XR, Apple has reportedly told Pegatron and Foxconn to stop plans for more production lines for the phone. With the new outlook, Foxconn might make 100,000 fewer phones each day, the Nikkei Asian Review reported.
“For the Foxconn side, it first prepared nearly 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 with knowledge of the matter told the outlet.
At the same time, Pegatron is reportedly stopping its efforts to increase production. In addition, sources claim that Apple told Wistron, a smaller company that assembles iPhones, to be on hold should rush orders occur, but the sources said the firm would not see iPhone XR orders during the holidays.
Apple has taken a beating since announcing its Q4 earnings last week. The stock price is off nearly 7 percent, even though its trillion-dollar market cap remains intact. And CEO Tim Cook said Apple would stop reporting unit sales of its products, including its crown jewel, the iPhone, next quarter. This came on the heels of reported iPhone sales that didn’t meet analyst expectations.
The Wall Street Journal threw some serious shade on that move, citing Steve Jobs’ reaction to Amazon’s decision in 2009 to do the same for the Kindle — that it must not be selling many. Jobs’ point then was that if a company is selling a lot of stuff, they want to tell people about it. If they aren’t, then they don’t.
The combination of pricier phones and longer upgrade cycles, which experts say will stretch to just shy of three years in 2020, hits Apple particularly hard, and the focus of Karen Webster’s latest piece on Apple is the company’s plans to make it up from their Services businesses.