Apple Reportedly Cuts iPhone XS and iPhone XR Production Orders Amid Lower-Than-Expected Demand

[technole]

I just upgraded from an ageing iPhone 5s to a brand new 8. The spec is good enough and the price, at £599, sane enough for what I need. I contemplated the X range but the prices are simply too high. Apple needs to start living in the real world with regards pricing – its devices are good, but not so good that they can command the premiums that Tim and co. are throwing on, seemingly at random. Like the new Mac Mini, for example.

Yep, that's the real issue here. iPhone 7 and 8 will likely last for years. Apple canibalizes their own products, when there used to be one iPhone, we now have well over 5+ choices any given cycle and that's ultimately not the best business model either.

Even if you have an iPhone 6s with iOS 12. You're pretty much set. At this point it's just better screens, cameras, and some performance improvements that most don't even need.

 

[goobot]

Here is an interesting fact. Apple makes $150 profit on average on each iPhone. Xiaomi's average profit from their smartphones - $2. Both are probably not sustainable.

I think Apple makes more than that.

 

[840quadra]

Correction, the market got used to bigger screens and less bezels for a cheaper price and aren’t willing to pay flagship prices for even an iphone SE.

That’s one of the main reasons why Apple is doing so shameful bad in India. Why buy a device with 6 years old tech and screen when you can have so much better for even less?

Link?

https://www.cnbc.com/2018/11/12/ali...e-was-the-top-selling-mobile-phone-brand.html

Granted this is a singular event, however based on friends who live in Pune, there are quite a bit of Apple phones within bigger urban areas. Though I admit, personal observations can be, and often are biased.

 

[emulajavi]

This whole debate is ridiculous.

2014: iPhone 6+ = $749
2018: iPhone Xr = $749

It’s all the other Apple products except iPhones which are too expensive.

6+ wasn’t the cheaper ‘new iPhone’. That was the $100 less iPhone 6

XR is the cheaper ‘new iPhone’ of 2018.

 

[Mr. Skeleton]

ha not really. I upgraded from the 6S + which was working fine but I was tempted by the better camera etc and went for the XS MAX. its a great phone but I regret buying it. I wish I'd just stuck with the 6s + to be honest as I don't use all the features.

About the same as buying a sports car and realizing you really in need the Prius

 

[WatchFromAfar]

Has there ever been an iPhone release where there were *not* stories like this? Most or all have turned out to be false.

A story where Apple cut their entire new iPhone line-up? No that's never happened. This is new, first time, doesn't look good.

 

[ryanwarsaw]

they made a calculated gamble to raise prices across the board thinking people would go along with it.
they didnt.
end of story.
expect lower price points across the board with the next generation along with claims of "improved manufacturing process" or something to make you think they're doing you a favor by selling it for $50 less.

It would be an easy enough fix if that's what it comes to. People are always willing to spend $700 to save $50.

 

[Dominicanyor]

I hope Apple really sees that the price increase has not really helped..

 

[Mr. Skeleton]

6+ wasn’t the cheaper ‘new iPhone’. That was the $100 less iPhone 6

XR is the cheaper ‘new iPhone’ of 2018.

Xr is a large screen phone. So the comparison is accurate.


XR is the cheaper end of the new generation. Hence the X.

So in reality, the cheaper iPhone is the IPhone 8 at $599.

 

[UltimaKilo]

This. None of this is a surprise and I'm a little shocked Apple leadership didn't see it coming. Or maybe they did?

They have been paying a lot of attention to the Mac lineup, finally offering a new MacBook Air worth buying, an amazing Mac Mini and a MacBook Pro worthy of the "pro" moniker, not to mention iMac Pro for power users.

They have also beefed up their iPads to finally be machines that can replace laptops for a lot of consumers and have a real hit with the Apple Watch and AirPods. However, this is still not enough.

Apple should look at Apple TV and it's services for growth much more aggressively, including possibly introducing a Smart TV to compete with those on the market, that will offer tons of original content, but that's not big enough either.

A $199 HomePod mini would be good, but it wouldn't bring in crazy revenue without significant improvements to Siri.

I'm not sure what else is out there that will increase revenues. The iPhone XR is a great device and the XS line is incredible, but people just don't have/feel the need to upgrade and China's slowdown is making it worse.

Lol. Lower end. It’s literally the same phone as the flagship with LCD and one camera.
[doublepost=1542656382][/doublepost]

Maybe you should take your phone to the Apple store. I’ve never had a call drop on my x or XS max


Look I get it, some people have issues. Take it to an Apple store with the best in class customer service. Otherwise, save your hate filled exaggerations and ‘Apple needs new leadership’ for another forum. It’s getting old. Nobody wants to replace the leadership of one of the only ethical companys that is protecting our rights.

 

[tkermit]

Good. Can we go back to smaller (and, ideally, more affordable) phones now?

 

[9081094]

Link?

https://www.cnbc.com/2018/11/12/ali...e-was-the-top-selling-mobile-phone-brand.html

Granted this is a singular event, however based on friends who live in Pune, there are quite a bit of Apple phones within bigger urban areas. Though I admit, personal observations can be, and often are biased.

Thanks for the link, but I was referring to India instead of China. Although I believe apple’s overall marketshare will drop in China too.

https://www.bloomberg.com/news/arti...ia-to-android-rivals-here-s-its-comeback-plan

 

[ryanwarsaw]

I hope Apple really sees that the price increase has not really helped..

The tricky part is people are saying these devices last forever these days. So is a $50 price drop or whatever going to drive enough sales to off set the loss in margin? People also say Tim is such a petty bean counter. If that's the case he is the perfect guy to figure this out.

 

[H.E. Pennypacker]

We can agree to disagree. In 2007 the iPhone price was above and beyond what other phones cost. It was considered a very pricey but intriguing product. Technology was state of the art at the time. That can probably be said about the Max or the Xs if you want but certainly not about the Xr which uses okay but certainly not state of the art screen technology.

The XR has all of the state of the art tech inside as the XS and XS max minus an OLED Panel and 3D Touch. While I agree OLED is the latest tech on screens, it’s by no means a phone that doesn’t offer state of the art technology.

 

[840quadra]

Thanks for the link, but I was referring to India instead of China. Although I believe apple’s overall marketshare will drop in China too.

https://www.bloomberg.com/news/arti...ia-to-android-rivals-here-s-its-comeback-plan

Oops my bad! I don’t know why I keep thinking Singles day is an Indian holiday.

That said, Pune (which I mentioned) is actually in India, but I can’t take peoples personal observations as gospel.

 

[Mr. Dee]

Too many Apple shareholders in this thread.

 

[run1976]

The XR has all of the state of the art tech inside as the XS and XS max minus an OLED Panel and 3D Touch. While I agree OLED is the latest tech on screens, it’s by no means a phone that doesn’t offer state of the art technology.

It is a compromise due to cost. The original iPhone was not compromised because of costs.

 

[9081094]

Oops my bad! I don’t know why I keep thinking Singles day is an Indian holiday.

That said, Pune (which I mentioned) is actually in India, but I can’t take peoples personal observations as gospel.

No problem. Admitting errors make a man great . You mean you’ve heard Apple is doing well in India? Apple is really pricing itself out of the market here in the Netherlands in favor of Huawei and Samsung. It’s a pity but the new iPhones are even more expensive over here than in the USA.

 

[technole]

The XR has all of the state of the art tech inside as the XS and XS max minus an OLED Panel and 3D Touch. While I agree OLED is the latest tech on screens, it’s by no means a phone that doesn’t offer state of the art technology.

Just like how iPhone 8 practically had the guts of an iPhone X. Just like face, camera, and OLED being the main difference. Which isn't a premium many people don't desire.

 

[DailySlow]

I want a (maybe slightly larger) bulletproof SE version with an earphone jack, thmprint unlock, lightning connector and better battery life. Else my next iPhone and maybe last will be a 2nd hand 6S.

In recent weeks, Apple slashed production orders for its latest iPhone XS, iPhone XS Max, and iPhone XR models due to "lower-than-expected demand," among other reasons, according to unnamed sources cited by The Wall Street Journal.

The report claims the production cuts have hit the iPhone XR hardest, with Apple said to have slashed its production plan for the device by "up to a third of the approximately 70 million units" it had asked some suppliers to produce between September and February, amounting to a reduction of up to 23.3 million units or so.

And in the past week, the report claims Apple told several suppliers that it cut its production plan again for the iPhone XR, as it battles a mature smartphone market and increasing competition from Chinese vendors like Huawei.

The production cuts are said to have "reignited frustration" among iPhone suppliers and "raised worries about Apple's ability to forecast demand."

We've heard this narrative before. Last year, a flurry of reports variously referred to the iPhone X as a "failure," "disappointment," and "flop." Another report said the iPhone X "did not live up to the hype." Yet, the iPhone X went on to become not only the top-selling iPhone at Apple, but in the entire world.

Apple also reported record-breaking iPhone revenue of $61.5 billion in the iPhone X launch quarter, so the device was anything but a flop.

Apple CEO Tim Cook has dismissed these kind of reports in the past. During an earnings call in January 2013, he noted that the company's supply chain is very complex and that conclusions shouldn't be drawn from singular data points:Apple's financial chief Luca Maestri has also cautioned about trying to determine iPhone demand based on potentially misleading supply chain reports.

It is possible, however, that Apple is increasingly struggling to forecast iPhone demand. Today's report claims that Apple was "excessively optimistic" about its initial production forecast for the iPhone X, which it proceeded to slash "by some 20 million units" for the first three months of 2018.

Unfortunately, iPhone sales will be less transparent going forward, as Apple announced that it will no longer disclose iPhone unit sales in its earnings reports starting with the first quarter of its 2019 fiscal year.

Justifying the move, Maestri said unit sales are "not particularly relevant for our company at this point," as they are "not necessarily representative of the underlying strength of our business." He added that Apple may provide qualitative commentary related to unit sales if the info is valuable to investors.

Apple will still disclose iPhone revenue on a quarterly basis, however, and any significant year-over-year decline in that amount would help indicate if iPhone XS, iPhone XS Max, and iPhone XR demand is truly lower than expected.

AAPL is down nearly 15 percent since Apple's earnings report on November 1.

Article Link: Apple Reportedly Cuts iPhone XS and iPhone XR Production Orders Amid Lower-Than-Expected Demand

want

 

[daneoni]

Unsurprising. Also, just because Apple sold a lot of iPhones over the year doesn't mean the iPhone X was the biggest seller...it wasn't. It shifted more units compared to competitors, but majority of iPhone sales came from the iPhone 7 and 8.

 

[curtvaughan]

I think there are a quite a few of us out there that still like Touch ID and don’t want the phone to unlock with our face. I’m hanging on to my “old” 7 for as long as I can. Still does everything I need it to do.

I have similar wants - like touch id and like headphone jacks, both of which my 6S+ provides just fine. A new battery should give it another year or two, and if by that time Apple comes up with a reasonable price point for practical function, maybe I'll get another iPhone. Apple has been able to have their way with high pricing and trimming of features the last several years since they have commanded a loyal customer base, assimilated over decades. I'm not only referring to phones, but more especially to Macs. They may have just about bled that customer cash cow for all she's worth. Time will tell.

 

[Lozza013]

As many others have pointed out now and in the past few years. We have reached peak Smartphone. What more can we add to the smartphone considering it almost does everything we can think of? I brought an XS Max outright for over $2000 AUD (My first "Plus" sized phone) while I love the phone, I will be holding onto this phone for longer than two years.

 

[DevNull0]

When will Apple’s Board of Directors realize that Tim Cook’s greed is a threat to this company in a long-term?

The problem is most of the board knows what Timmy is all about and are making a fortune by sharing his short-term greed. They will be the first rats to abandon the Apple ship before it sinks and walk away with billions in profit for destroying Apple.

 

[curtvaughan]

It's a good point, I loved my 6S and did the battery thing as well. It still worked great. I planned to keep it for at least another year.

Unfortunately this weekend I accidentally ran over it with my snowblower (pics available upon request! LOL) and it isn't an iPhone that will be replacing it for the first time since the 3G. I did the only thing I can do to protest XS & XR carrier deals & off contract prices: not buy any of them.

You can still purchase new 6S phones - Sprint, for example, is selling them for $450, and the 6S+ for $550. Other carriers probably are similar.