Weak iPhone XR demand and component issues reportedly lead to second production cut

Weak iPhone XR demand and component issues reportedly lead to second production cut
Apple may have made a boatload of money in the July - September 2018 quarter, managing to considerably boost its share of US smartphone sales before the iPhone XR was even released, but it’s not all rosy in the Cupertino camp.

If it wasn't already obvious enough, the worldwide leader in smartphone profits is bracing itself for a potential drop in overall unit shipments this year compared to the previous holiday season.

Another respected analyst seems to back up recent supply chain gossip in a new investor note seen by AppleInsider, describing the iPhone XR “sell-through rate” as “weaker than initially expected.”

That’s going to prove particularly problematic for Apple during the year’s fourth calendar quarter (the company’s first fiscal quarter of 2019), as the lower-cost 2018 iOS handset was widely projected to outsell its pricier OLED screen-sporting siblings.

While the iPhone XS and XS Max could now exceed certain internal and external expectations, the family’s ASP (average selling price) might be held back by steady iPhone 8 demand and an unforeseen resurgence in iPhone X popularity.

Specifically, Rosenblatt Securities Managing Director and top research analyst Jun Zhang foresees an iPhone X production ramp-up of between 1 and 2 million units for the holidays. But iPhone XR numbers could drop by as much as 4 or 5 million units in addition to an already drastic first round of order cuts.

Then again, it’s important to highlight this second production adjustment is probably caused by a combination of factors. Apart from relatively weak demand, a very specific quality issue with a paramount component may be prompting the additional reduction.

Skyworks, a US-based supplier of semiconductors, reportedly failed to meet Apple’s famously stringent quality standards for printed circuit boards (PCBs), which made the smartphone manufacturer “quickly drop” its orders. Still, iPhone XR demand is at least partly to blame for these repeated manufacturing cuts.

Related phones

iPhone XR
  • Display 6.1" 828 x 1792 pixels
  • Camera 12 MP / 7 MP front
  • Processor Apple A12 Bionic, Hexa-core, 2490 MHz
  • Storage 256 GB
  • Battery 2942 mAh(25h talk time)

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26 Comments

1. bucky

Posts: 3771; Member since: Sep 30, 2009

If they lessened the specs just a bit and kept the price to $500 unlocked, it would have been good. That or Apple just wasn’t meant to sell “budget” devices.

7. palmguy

Posts: 955; Member since: Mar 22, 2011

Apple & “budget” devices? Lol. Two words never to be used together.

9. Venom

Posts: 3015; Member since: Dec 14, 2017

Iphone SE?

17. lyndon420

Posts: 6452; Member since: Jul 11, 2012

iPhone 5C?? C stood for cheap... remember??

26. NateDiaz

Posts: 1082; Member since: Mar 03, 2018

Cheap? Lol 600 euro for 16 gb in 2013 how was that cheap?

11. worldpeace

Posts: 3092; Member since: Apr 15, 2016

Just what part they can "lessened"? Most of XR specs is already below average flagships out there.

14. akistz

Posts: 31; Member since: Sep 26, 2018

Yeah right like the secure Face ID, the high end chipset, great battery life and a great display as fas as brightness and color gamut go. The only thing i could see as a downside is the “low” ppi and 3 gigs of ram but that is also debateable.

20. rouyal

Posts: 1566; Member since: Jan 05, 2018

The only thing "lessened" is the display. The A12 chip stomps every Android flagship.

21. Knownhost

Posts: 75; Member since: Nov 13, 2017

It's similar to the difference between a Toyota and a Lexus. Both are made by the same company but are targeted at different customers. The problem for Apple is that their Lexus came first, so the Toyota is seen as an inferior Lexus rather than a good, serviceable product on its own.

22. sissy246

Posts: 6959; Member since: Mar 04, 2015

You keep thinking that, LMAOhttps://youtu.be/2_xqVUp-wAM

2. AmashAziz

Posts: 2873; Member since: Jun 30, 2014

These investors have no break.

3. AmashAziz

Posts: 2873; Member since: Jun 30, 2014

Off-topic. Since Apple has removed the 3.5mm jack from it's latest iPad Pros and they seemto be all about USB-C now, I was wondering what if.... ....they had a 2nd USB-C port?! Wouldn't that be awesome. There's obviously space inside the new Pros for a 2nd port and it wouldn't require Apple to bring the jack back, while keeping customers happy (somewhat). How 'bout it guys?

6. Rampage_Taco

Posts: 997; Member since: Jan 17, 2017

that would make sense seeing that Apple is trying to make the iPad pro into more of a convertible laptop, so why not offer a second USB-C port for plugging in USB-C headphone (or adapter) as well as other USB-C peripherals

12. worldpeace

Posts: 3092; Member since: Apr 15, 2016

They know it will be useful for "some" users, but they just won't listen until they get massive backlash. Like when they put only one port on MacBook (2015), now they put more than that (and even 3.5mm jack) on the newest MacBook Air.

18. lyndon420

Posts: 6452; Member since: Jul 11, 2012

We've brought up that concept before...two USB-C ports - one for charging and another for wired accessories (headphones etc). It would only make sense, but OEM's care very little about what we want...we are supposed to cave to what they say is the 'new' and 'courageous' way of doing things. That's why we have no headphone jack, no swappable batteries, an ugly notch...it never ends.

4. OneLove123

Posts: 792; Member since: Aug 28, 2018

So, now component issues.

5. dubaiboy78

Posts: 442; Member since: Sep 19, 2014

Who will buy this crap?! It is more expensive than mate 20 pro here in dubai!!!

15. NateDiaz

Posts: 1082; Member since: Mar 03, 2018

Who will? Definitely not you, that phone costs more than what you earn feeding camels in Dubai.

19. lyndon420

Posts: 6452; Member since: Jul 11, 2012

Highly unlikely. You're rich when born in Dubai.

8. Xxtoxicskittlexx

Posts: 151; Member since: Jun 11, 2018

I mean... A Caveman could've predicted this.

16. NateDiaz

Posts: 1082; Member since: Mar 03, 2018

So why didn't you predict this earlier?

10. Panzer

Posts: 278; Member since: May 13, 2016

These stories seem to come earlier and earlier every year. We should see a record price per device this year though.

13. akistz

Posts: 31; Member since: Sep 26, 2018

Xr is a great phone with a sub par screen resolution nonetheless. On a side note “respected” analyst Ming chi Kuo predicted stronger demand for the xr and a lower budget price to begin with. Shows how much he is to be trusted smh

* Some comments have been hidden, because they don't meet the discussions rules.

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