Apple cancels production boost for iPhone Xr

The iPhone XR may not be selling as well as Apple hoped.                  Ian Knighton  CNET

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

Although Apple never said as much when it launched the Apple iPhone XR in September, its fairly obvious the device is meant to be more a direct competitor with the Android market.

Foxcomm originally planned to use 60 production lines for the handset but will only use 45 now.

Apple told its main phone assemblers, Foxconn and Pegatron, to stop plans for additional iPhone XR production lines, a report said Monday.

Yet Nikkei is also reporting that while Apple may be choosing not to initiate extra reserved production lines for the iPhone XR, the company is boosting its production of the iPhone 8 and iPhone 8 Plus this quarter by an extra 5 million units.

Pegatron apparently faces a similar situation, suspending plans to ramp up production of the iPhone XR and simply awaiting further instructions from Apple at this time.

Apple had asked Wistron, one of its smaller manufacturing partners, to "stand by" in case iPhone XR demand exploded.

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Apple has informed several of its suppliers that expectations should be tempered for orders of the Apple iPhone XR.

Tied to this is the unexpected news that demand of the previous-generation iPhone 8, which Apple still sells, has jumped.

Apple also stoked worries about iPhone sales last week when it said that beginning this quarter, it will no longer break down unit sales for iPhones, iPads and Macs.

The analyst predicts the company's Services business, which includes its App Store, Apple Music, and Apple Pay offerings, will grow 20% annually and rise more than $50 billion in sales by fiscal 2020.

Ives reaffirmed his $310 price target for Apple's stock, representing more than 50% upside to the current stock price.

The report follows Apple's decision last week to stop providing unit-sales figures in its quarterly earnings, making it even more hard going forward to determine individual unit success.

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