Apple Cuts iPhone XS, XR Production Anew Due To Poor Sales
Apple has announced yet another round of iPhone XS and iPhone XR production cuts reportedly due to slow movement of the latest flagship. Production has been cut by 10-percent, raising questions on whether the latest flagships have been a dud in the consumer market.
According to Nikkei, the original production volume of 19 for the first quarter (January to March) has been reduced by 10-percent. iPhone production including the old models was estimated to be 47 million to 48 million in January to March, but there is a view that it will remain at around 40 to 43 million.
Part of the reason behind the production cuts is reportedly the sluggish demand over in China. The latest announcement appends a previous one made last month where an analyst estimated an iPhone XS production cut by nearly half.
The economic slowdown over in China is singled out as one of the reasons, 9 to 5 Mac reported. Regardless, this has not stopped Apple CEO Tim Cook from remaining optimistic about the iPhone XR, believing a trade dispute between China and the United States will eventually be resolved.
Hence, it comes to no surprise that some outlets are branding the latest iPhones, the iPhone XR in particular, as failures. Apple Insider, however, begs to differ, terming it as ludicrously mistaken.
This was in response to an article made by Yoko Kubota of the Wall Street Journal which took aim at the iPhone XR as the root of the problem of Apple's woes over in China. He saw the device as not fancy enough and too expensive. He did, however, backtrack a bit, saying that it is still too early to call the iPhone XR a flop after only a few months.
With attention on the unit sales of Apple, Apple Insider says that analysts may have misinterpreted the figures. It could be a matter of concluding too early. There's evidence that China's iPhone buyers are driving record sales of apps and other Services, as well as looking to Apple for sales of Macs, iPads, Apple Watch, and other products, which collectively grew in China by 19-percent even as iPhone sales dipped.
If China's affluent users were being swayed by cheaper Huawei phones, why not also by cheap Huawei PCs, tablets, watches and other products?
Seeing how Apple's products don't come cheap, production cuts will always raise questions. But in this case, it would be best to wait and see first to see how the trend comes out. Some calls may be on point while others not.