Apple Inc. (NASDAQ: AAPL) has just ordered its suppliers from Taiwan to reduce the production of iPhone XR due to weak demand. As surprising as it sounds, let's take a closer look at the story.
Apple's iPhone XR was something that, after announcing, was expected to attract more masses. In fact, Apple has asked its suppliers to produce more than the iPhone XR from the other two models. The other two models, especially the iPhone XS Max, had faced many flak initially to be the most expensive iPhone ever. But sales and supply figures tell a totally different story. The forecasts made by the media initially proved to be largely open. Sales of XS XS and XS Max were impressive, at least. On the other hand, the iPhone XR was not addressed to consumers as much as people thought.
Apple was so surprised to have ordered their major suppliers at Foxconn, now known as Hon Hai Precision Limited, and Pegatron to reduce the number of supply chains provided for the iPhone XR. This meant that, on a daily basis, iPhone XR production would be reduced by the thousands. Apple was, in fact, so confident about the success of the model that had ordered a smaller iPhone assembler called Wistron to stand next would have to have a burst of demand during the holiday season. Unfortunately, they never had the opportunity to use it.
Let's try to analyze why the demand for the iPhone XR has decreased with the failure of many market analysts.
iPhone XR: Caught in the middle?
Honestly, the weak demand of the iPhone XR, compared to its more expensive counterparts, is a humdinger on its own. According to the latest report, the iPhone XR provides performance upgrades in its previous versions, which are almost entirely identical to the more expensive ones respectively. In fact, offers the best battery life of all three. But perhaps, the place where Apple people made it wrong is pricing.
Apple's iPhone XR, at $ 749, is significantly cheaper than the iPhone XS and XS Max. But, on the other hand, it is also significantly higher than the models below it, namely iPhone 8 and 8 Plus. In comparison, iPhone 8 and 8 Plus cost about 20% less than the iPhone XR. Therefore, different people went for different models. Apple's fans, people who are not afraid to spend a new iPhone each year, target higher-end models on iPhone XS and iPhone XS Max. For people who wanted more than one iPhone budget, they found the iPhone 8 and 8 Plus offering greater value for money, in the absence of any significant difference from the iPhone XR.
Demand for iPhone 8 and 8 Plus is rising
One of the surprises in the show was the fact that people really demand the older iPhone 8 and 8 models more than Apple expected. Originally expected to sell about 20 million units, the Cupertino giant ordered production for 5 million units more to cover unexpected demand in front of them. It is not surprising that the company monitors holiday sales to quickly adapt to the resulting demands.
Considering the growing demand for the iPhone 8 series, the company has begun to offer the refurbished iPhone 8 model, starting at just $ 499. And guess what, the iPhone 8 Plus has never exhausted.
Immersion on iPhone XR requires not to worry
Irrespective of the decline in demand, iPhone XR is still highly rated by the entity review. Arstechnica has recently described it as "the best new iPhone for most people"CNBC's Jim Cramer described the low demand for the iPhone XR as" complete nonsense. "It is also possible for people to prefer the model over time, but it can not be denied that Apple, along with most reviewers , were really disappointed with the discouraging demand created by the iPhone XR – the earliest projected iPhone being sold more than H2 2018. Will the trend change? Suppose time will tell you.