Published: Thu, November 08, 2018
Hi-Tech | By Preston Stone

IPhone XR Sales are Much Softer Than Expected

IPhone XR Sales are Much Softer Than Expected

Apple's iPhone XR was the third model the company unveiled in September.

The report says Apple informed its primary suppliers - Foxconn and Pegatron - to halt plans for additional production lines for the iPhone XR.

Five years ago, Apple cut production orders for its plastic-backed iPhone 5C a month after its launch, fueling speculation of weak demand for the model. "The moves to add orders for year-old iPhone models while suspending extra production for the latest product illustrates Apple's lack of innovation and inability to energize consumers with such a pricing strategy".

The company also warned last week that overall sales for the holiday season would likely be lower than expected. The phone does appear to have ramped more slowly than some of Apple's previous flagships, but it became the bestselling phone through much of the first half of 2018.

At the lowest level of the day, Apple shares have registered a loss of 10.8 per cent in two days. At Rs 76,900, the iPhone XR is still on the expensive side, and maybe some cashback, EMI and buyback offers could help Apple sell significant number of units.

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In Foxconn's case, it prepared 60 production lines for the iPhone XR, but so far has only used 45. The sales of the iPhone XS and XS Max were impressive. Similarly, with iPhones no longer launching on a set schedule these days (with last year's iPhone X launching in November and the iPhone XR launching in late October of this year), a random 12 week snapshot of iPhone sales is not almost as instructive as it was years ago.

Broadly speaking, the original report regarding a drop in iPhone production illustrates why Apple understandably wants to keep iPhone sales close to its chest.

Apple closed just above $200 amid a wider tech sell-off which has seen other FAANG stocks fall in recent weeks.

"We caution investors not to lose sight of the massive metamorphosis on the horizon at Apple being led by the services business", Ives wrote in a research report published Monday.

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