The $749 model is Apple's budget iPhone, and at a few hundred dollars cheaper than the flagship XS and XS Max was meant to stir consumer interest among more cost-conscious buyers. Sporting a almost edge-to-edge display at a price point that is drastically lower than Apple's iPhone XS models, many analysts have been predicting that the iPhone XR will be a runaway hit this holiday shopping season.
The report, in Nikkei, states that demand for the iPhone XR has been "disappointing". So Apple is canceling plans to boost production over the holidays. Foxconn production of the iPhone XR is said to be down as much as a quarter from the original goal. However, it is now using only around 45 lines and does not require any additional production capacity. That suggested a 20%-25% reduced forecast in unit sales, per the Nikkei report, which cited anonymous sources.
"This performance management feature is specific to iPhone and does not apply to any other Apple products".
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.
"For the Foxconn side, it first prepared almost 60 assembly lines for Apple's XR model, but recently uses only around 45 production lines as its top customer said it does not need to manufacture that many by now", a source told Nikkei.
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. With more customers choosing less expensive and older iPhones, Apple will have trouble raising the average selling price (ASP) of the device lineup, in keeping with its new strategy, which I call "Apple Jacks".