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

[Krizoitz]

Well - when it costs you less than $400 to make a device,

It doesn’t. Unless you think all it costs to make a phone is to buy the parts.

Which means you think R&D costs $0
And shipping.
And marketing.
And paying retail staff.
And software engineers.
And testers.
The list goes on.

But sure, it’s costs $400 cause some random website says that’s how much the parts cost. Gotta love that “logic”

 

[DNichter]

This doesn't surprise me too much. iPhone sales have plateaued, like much of the industry. I think this is fine in the long term though as Apple is focusing on quality, services, performance, and long term retention. As long as by the time someone decides to get a new phone, they get an iPhone, then it's a win for Apple. They will still be the phone of choice for a long time. I am sure costs will come back down to reality in the coming years as well.

 

[Macbook14in]

Increasing the prices leads to lower demand, it's that simple Timmy Crook!

 

[iapplelove]

I’m just keeping my devices longer. Got 5 plus years out of my iPad Air.

And anyone who upgraded iPhones every year is just wasting money imo.

Keep your devices longer. Apple knows this is what people are doing and will have no choice but to cut back on the price.

 

[QCassidy352]

Their older products work too well. My two year old iPhone, 4 year old iPad, and 5 year old Mac all do their jobs flawlessly.

Combine that with very unattractive pricing on the new models, and I would bet a lot of people, including me, are just using what they have, even if an upgrade would be fun.

 

[I7guy]

The iPhone 6 is an excellent example of the opposite narrative as suppliers scrambled to meet unexpected high demand.

I don't think this should be trivially dismissed as fake news.

Supply chain management probably was different and not as refined with the iPhone 6.

 

[golftime]

Tim Cook has lost his vision for the company. The new products, from iphones to Macs are good, but not great, and his prices do not justify the improvements in technology, particularly in light of the competition. Capitalism is sending him a message.

 

[Tijdelijk]

No, the price

Well for me it was the notch.
It's a disease

 

[tubular]

Apple also slashed iPhone SE production — to zero.

That's when they lost me as a phone customer.

They gained a sale — I bought an SE to stick on the shelf for when my current one goes belly up.

Tim’s gotta stop chasing just the highest high end by wiping out the low end.

 

[StevieD100]

They sure haven't cut down the advertising budget. Every other television commercial is an apple product. Either through an apple add or through a carrier ad.

Product overload.

TV Adverts? Oh how quaint. Do they still have them? /sic
I can't remember the last time I saw any adverts let alone any Apple ones. There again, I never watch TV unless I've recorded the programme first and then I skip over the ads.

 

[Mosey Potter]

I cannot say if my experience is common, but assuming that Apple monitors these forums to see what their customers are thinking/doing, I’ll share. I was holding out for the iPhone Se2. When Apple said the SE is over, I thought, hmm, now I have a dilemma. My iPhone 5 had served me well but it was time to upgrade. Upon seeing the incredible cost of the iPhone Excess, I pulled out my credit card and bought a shiny new iPhone 7 for a bit more than one third the cost of the Excess. Me happy. I actually tried to talk my wife into upgrading to the XR phone, but she decided to get a new battery installed into her iPhone 6 for $29. So that’s us, fwiw. Wish they had kept the SE phone line going, though. I think they made an error with that decision, but life goes on.

 

[HoosBruce]

Their greedy push for bigger profit margins was bound to bite them in the ass. I won't be surprised one bit if the new iPad Pro sees sales fall off as well. They can't continue to raise prices with this much competition.

Their profit margins have remained largely the same. Production costs have risen which has led to MSRP rising. It sucks, but it hasn't just been because Apple is evil and greedy

 

[LordVic]

TV Adverts? Oh how quaint. Do they still have them? /sic
I can't remember the last time I saw any adverts let alone any Apple ones. There again, I never watch TV unless I've recorded the programme first and then I skip over the ads.

it'll depend on area and what you're watching.

For example, while i'm watching hockey, The owners of the team, are also the owners of the major carriers. So they will have iPhone (Now available on Rogers!) commercial's almost every single other commercial.

Thankfully commercial breaks are time to get a beer or a bowl

 

[I7guy]

Tim Cook has lost his vision for the company. The new products, from iphones to Macs are good, but not great, and his prices do not justify the improvements in technology, particularly in light of the competition. Capitalism is sending him a message.

The only message to be sent is the next record breaking quarter.

 

[TheShadowKnows!]

The reality is that Apple's sales strategy is simple, hinging on a six-step dance:

1. raise the iPhone's MSRP to match ever-increasing mobile computer levels
2. hide MSRP using 24-month, installment loans
3. rely on low inflation for 0% interest
4. use either provider-supported monthlies, or a cooperative bank, to source the loan
5. demand AppleCare+ surcharge on the loan to pad its "services" (when relying on Apple's own iPhone upgrade plan)
6. market the monthly payments and their increases, as "just a few Starbucks coffee purchases per month."

It is simply genius.
But this six-step dance can and will fall flat, when/if:

1. inflation picks up,
2. consumer credit-to-debt ratio grows beyond 10%
3. consumers keep existing hardware beyond the two-year cycle
4. competition provides a palatable, albeit imperfect, alternative

Cook will continue raising prices until that six-step dance, and its music, stops. Just my view.

 

[Rogifan]

And this is the same story the WSJ and every one else writes every year this time of the year. And next year there will be a story about weak sales for whatever the XS successor is.

Remember this gem?

Apple Cuts Orders for iPhone Parts
Juro Osawa
Updated Jan. 13, 2013 10:20 p.m. ET
Apple's orders for iPhone 5 screens for the January-March quarter, for example, have dropped to roughly half of what the company had previously planned to order, two of the people said.

The Cupertino, Calif., company has also cut orders for components other than screens, according to one of the people. Apple notified the suppliers of the order cut last month, the people said.

Or these?

Apple is said to be cutting iPhone 6S production by 30%
Apple is expected to cut its iPhone 6S and 6S Plus production by 30 percent in the January to March quarter, Japan's Nikkei reported Tuesday.

The report said the cut is due to the excess level of inventories of the latest iPhone models, which in part was due to the higher exchange rate that made iPhones more expensive in emerging countries.

Apple Will Reduce iPhone 7 Production By 10% in Early 2017 Due to 'Sluggish' Sales
Apple plans to reduce production of the iPhone line by 10 percent beginning in the first quarter of 2017, according to supplier data collected by Nikkei. Apple is said to have experienced a similar situation thanks to accumulated inventory of the iPhone 6s late in 2015, which also caused it to lower output of that smartphone in Q1 2016.

The company attempted to prevent the same thing from happening again with the iPhone 7 by curbing production quantities on the 2016 smartphone, but even with that preemptive move Apple is again looking at a manufacturing downturn for its flagship iPhone line in the new year.

'Anemic' iPhone 8 demand drags Apple shares lower
(Reuters) - Apple Inc’s shares fell nearly 3 percent on Thursday on signs of weak demand for the iPhone 8 that caused analysts and investors to question the company’s staggered release strategy for its latest phones.

Wireless carriers in the United States and Canada have reported slow third-quarter customer upgrades. While some expect a pickup after the iPhone X goes on sale in November, others cautioned that phone’s high price tag could weigh on demand.
Apple to Cut iPhone X Production in the Face of Weak Demand
By Yoko Kubota in Beijing and
Tripp Mickle in San Francisco
Updated Jan. 30, 2018 12:55 p.m. ET

Apple Inc. AAPL -2.61% is slashing planned production of the iPhone X for the three-month period ending March 31, people familiar with the matter say, in a sign of weaker-than-expected demand for the pricey handset.

Apple plans to make about 20 million iPhone X handsets in the first quarter, down from roughly 40 million initially planned, according to a person with knowledge of Apple’s production goals. Other people familiar with the iPhone supply chain said Apple had cut orders for components used in the iPhone X by 60%.

 

[shanson27]

Most Europeans buy Chinese smartphones from Huawei, Xiaomi, Oppo, OnePlus, Vivo, Honor, Nubia etc. Apple has no chance against Chinese smartphones!

 

[zorinlynx]

The iPhone 6 is an excellent example of the opposite narrative as suppliers scrambled to meet unexpected high demand.

I don't think this should be trivially dismissed as fake news.

iPhone 6 had a lot of pent up demand from people who wanted bigger screens.

I remember when I was in a line to pick up my 6 that year people were talking about how they would "finally" have a big screen. Remember, at that point we had the competition producing bigger-screened phones for a couple of years. Apple was playing catch-up.

This year there's really not much new on the table. It's just incremental improvement and the prices are too high. It's telling this is the first two year cycle that I don't upgrade, since 2010.

 

[EvilEvil]

This is what happens when you have too many SKUs and jack up the prices.

 

[neoelectronaut]

They’re way too big. That’s my big gripe.

They’re also too expensive, and the phone market is just saturated. My wife is just fine still using her iPhone 6 and likely won’t replace it until it starts to malfunction.

 

[shanson27]

Well for me it was the notch.
It's a disease

To be honest, why would someone care about the notch, the notch is the last thing I would care !

 

[archvile]

I think this is fine in the long term though as Apple is focusing on quality, services, performance, and long term retention.

They have shown this with iOS 12 (quality, or performance/bug fixes), and enhancing their services portfolio with Apple Music, and breaking into original content. Retention has never really been an issue for Apple though.

As long as by the time someone decides to get a new phone, they get an iPhone, then it's a win for Apple. They will still be the phone of choice for a long time. I am sure costs will come back down to reality in the coming years as well.

Part of me feels like costs won't necessarily come down, but since I am tied 100% into the Apple ecosystem, I don't foresee myself switching to anything else. So what this means is, I'm hoping my XSM lasts me a loooong time, because at these price points I'm not looking forward to upgrading again. But who knows, given the iPhone X price jump last year, being a new model with new tech and all, maybe in a few years prices will calm down, or maybe next year's X or XI or whatever will be 899 instead of 999, and the XRS could be 649. Haha, who knows... all I know is it feels like 2018 has been an especially greedy year for Apple.

 

[Tijdelijk]

And this is the same story the WSJ and every one else writes every year this time of the year. And next year there will be a story about weak sales for whatever the XS successor is.

Remember this gem?

Apple Cuts Orders for iPhone Parts
Juro Osawa
Updated Jan. 13, 2013 10:20 p.m. ET
Apple's orders for iPhone 5 screens for the January-March quarter, for example, have dropped to roughly half of what the company had previously planned to order, two of the people said.

The Cupertino, Calif., company has also cut orders for components other than screens, according to one of the people. Apple notified the suppliers of the order cut last month, the people said.

Or these?

Apple is said to be cutting iPhone 6S production by 30%
Apple is expected to cut its iPhone 6S and 6S Plus production by 30 percent in the January to March quarter, Japan's Nikkei reported Tuesday.

The report said the cut is due to the excess level of inventories of the latest iPhone models, which in part was due to the higher exchange rate that made iPhones more expensive in emerging countries.

Apple Will Reduce iPhone 7 Production By 10% in Early 2017 Due to 'Sluggish' Sales
Apple plans to reduce production of the iPhone line by 10 percent beginning in the first quarter of 2017, according to supplier data collected by Nikkei. Apple is said to have experienced a similar situation thanks to accumulated inventory of the iPhone 6s late in 2015, which also caused it to lower output of that smartphone in Q1 2016.

The company attempted to prevent the same thing from happening again with the iPhone 7 by curbing production quantities on the 2016 smartphone, but even with that preemptive move Apple is again looking at a manufacturing downturn for its flagship iPhone line in the new year.

'Anemic' iPhone 8 demand drags Apple shares lower
(Reuters) - Apple Inc’s shares fell nearly 3 percent on Thursday on signs of weak demand for the iPhone 8 that caused analysts and investors to question the company’s staggered release strategy for its latest phones.

Wireless carriers in the United States and Canada have reported slow third-quarter customer upgrades. While some expect a pickup after the iPhone X goes on sale in November, others cautioned that phone’s high price tag could weigh on demand.
Apple to Cut iPhone X Production in the Face of Weak Demand
By Yoko Kubota in Beijing and
Tripp Mickle in San Francisco
Updated Jan. 30, 2018 12:55 p.m. ET

Apple Inc. AAPL -2.61% is slashing planned production of the iPhone X for the three-month period ending March 31, people familiar with the matter say, in a sign of weaker-than-expected demand for the pricey handset.

Apple plans to make about 20 million iPhone X handsets in the first quarter, down from roughly 40 million initially planned, according to a person with knowledge of Apple’s production goals. Other people familiar with the iPhone supply chain said Apple had cut orders for components used in the iPhone X by 60%.

Well the iphone 6 was the latest iphone which was very difficult to get. All other models (for sure the X models) were not even sold out in the preorder here in Europe

 

[Rogifan]

This is what happens when you have too many SKUs and jack up the prices.

What happened besides the WSJ publishing a rumor?

 

[redbill2]

Need to cut the price, not the orders.

but didn't you see the sweet deals you can get? Buy 1 at full price, you can get a 2nd almost free, if its a new line, and you have direcTV, and you pay full tax on both, and you actually have to pay u front for the 2nd one, but in like 6 months you'll get some credit on your bill. how can you pass that up?