Apple slashes production on three iPhone models

Muriel Colon
November 21, 2018

The iPhone XR, Apple's "cheap" entry-level model's production was cut down, as it was not performing as well as expected sales-wise.

Apple has reduced production orders for all three of its new iPhones, according to a November 19th, 2018 report from the Wall Street Journal.

With investors speculating that all these signs pointed to weakness in new iPhone sales, the Journal's sources detailed that Apple in October cut its production plan for iPhone XR, the cheaper model, by up to a third of the almost 70 million units it had asked some suppliers to produce between September and February.

Facebook's stock hit its lowest level since February 2017 after Journal reported that CEO Mark Zuckerberg blamed second-in-command Sheryl Sandberg for the Cambridge Analytica scandal and its subsequent fallout.

Screen maker Japan Display Inc. cut its full-year outlook citing weaker smartphone demand, while British chipmaker IQE Plc (IQE.L) said it expects a material reduction in its financial performance in the current year. The iPhone XS, XS Max and XR, unveiled in September, didn't sell as well right off the bat as analysts expected, and Apple cast doubt about sales volumes for the current quarter as well.

"The laboratory of the market now points to Apple being at the limit of their price premium for the iPhone", he wrote.

There's a good chance that this year we will see a similar situation with iPhone iPhone XS and XR. Apple had initially planned to manufacture almost 70 million iPhone XR units between September and February. Apple's CFO Luca Maestri said during the company's Q4 earnings call that it would stop reporting these kinds of unit sales in the future.

Share prices for many of Apple's suppliers including Lumentum, Oclaro, Cirrus Logic, and Broadcom significantly dropped over the past week, as well.

Apple also announced earlier this month that it would not release individual sales numbers for its iPhone, iPad and Mac.

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