Apple is reportedly reining in production of its cheaper iPhone

Report: Apple cancels iPhone XR production boost

While Apple had great expectations for the iPhone XR, it's now ordering more iPhone 8 and 8 Plus models from its partners.

Apple shares fell almost 4 percent after a report signaled that its new, lower-priced iPhone XR might not be selling as well as expected.

Apple has told its top smartphone assemblers-Foxconn and Pegatron-"to halt plans for additional production lines dedicated to the new iPhone XR".

However, to enhance the company's global deployment, Tung said that Pegatron is studying the feasibility of producing in the Southeast Asia region and will make some adjustments if necessary.

Apple did not immediately respond to Reuters' request for comment.

The iPhone XR may not be selling as well as Apple hoped. The move will reduce total possible iPhone XR production by 100,000 units per day over the next few months, according to the report.

One source who claims to be familiar with iPhone XR production told the publication that Foxconn initially prepared 60 assembly lines for the iPhone XR but only uses about 45.

Other iPhone manufacturers face similar issues. Weakened demand for smartphones globally might not hurt Apple's revenue too much, but suppliers could feel the strain. And at a starting price of $749, it's the most affordable new iPhone on store shelves.

Per usual, you might want to take Nikkei's report with a grain of salt, especially in light of analyst Ming-Chi Kuo's recent investor note detailing how iPhone XR sales in the holiday quarter may reach as high as 38 million units. Originally Apple had ordered 20 million of the last generation model but has since raised the order to 25 million.

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. During that call, Apple also - for the first time ever - neglected to give iPhone sales numbers for the quarter.

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