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

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.

iphone xs vs xr
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:

Even if a particular data point were factual, it would be impossible to interpret that data point as to what it meant to our business. The supply chain is very complex and we have multiple sources for things. Yields can vary, supplier performance can vary. There is an inordinate long list of things that can make any single data point not a great proxy for what is going on.

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.

Related Forum: iPhone

Top Rated Comments

2ilent8cho Avatar
66 months ago
Need to cut the price, not the orders.
Score: 251 Votes (Like | Disagree)
sequential Avatar
66 months ago
keep robbing your customers and eventually it's going to come back to you.
Score: 175 Votes (Like | Disagree)
MacFather Avatar
66 months ago
Deleted.
Score: 146 Votes (Like | Disagree)
Radon87000 Avatar
66 months ago
Good. Time to bring prices down to a sane level.
Score: 115 Votes (Like | Disagree)
japanime Avatar
66 months ago
Apple also slashed iPhone SE production — to zero. :mad:

That's when they lost me as a phone customer.
Score: 110 Votes (Like | Disagree)
BruiserBear Avatar
66 months ago
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.
Score: 97 Votes (Like | Disagree)

Popular Stories

apple card 1

Apple Ending Apple Card Partnership With Goldman Sachs

Tuesday November 28, 2023 3:09 pm PST by
Apple is ending its credit card partnership with Goldman Sachs, according to The Wall Street Journal. Apple plans to stop working with Goldman Sachs in the next 12 to 15 months, and it is not yet clear if Apple has established a new partnership for the Apple Card. Apple and Goldman Sachs will dissolve their entire consumer partnership, including the Apple Card and the Apple Savings account....
iOS 17

Everything New in iOS 17.2 Beta 4

Tuesday November 28, 2023 12:18 pm PST by
Apple is wrapping up development on iOS 17.2, with the update expected to come out in December. While we're getting to the end of the beta testing period, Apple is still tweaking features and adding new functionality. We've rounded up everything new in the fourth beta of iOS 17.2. Default Notification Sound Under Sounds & Haptics, there's a new "Default Alerts" section that allows you to ...
iOS 17

Apple Releases iOS 17.1.2 With Security Fixes

Thursday November 30, 2023 10:12 am PST by
Apple today released iOS 17.1.2 and iPadOS 17.1.2, small updates to the iOS 17 and iPadOS 17 operating systems that Apple introduced in September. iOS 17.1.2 and iPadOS 17.1.2 come a few weeks after the release of iOS 17.1.1, another bug fix update. iOS 17.1.2 and iPadOS 17.1.2 can be downloaded on eligible iPhones and iPads over-the-air by going to Settings > General > Software Update....
Apple 5G Modem Feature Triad

Apple to Discontinue Custom 5G Modem Development, Claim Reports

Wednesday November 29, 2023 4:19 am PST by
Apple is discontinuing in-house modem development after several unsuccessful attempts to perfect its own custom 5G modem chip, according to unconfirmed reports coming out of Asia. According to the operator of news aggregator account "yeux1122" on the Naver blog, supply chain sources related to Apple's 5G modem departments claim that the company's attempts to develop its own modem have...
All New CarPlay Five New Features Article 2

What to Expect From All-New CarPlay, Still Listed as Coming 'Late 2023'

Tuesday November 28, 2023 7:44 am PST by
At WWDC in June 2022, Apple previewed the next generation of CarPlay, promising deeper integration with vehicle functions like A/C and FM radio, support for multiple displays across the dashboard, increased personalization, and more. Apple's website still says the first vehicles with support for the next-generation CarPlay experience will be announced in "late 2023," but it has not shared...
Apple Logo

Apple Discontinued These 5 Products This Year

Monday November 27, 2023 7:03 am PST by
As the end of 2023 nears, now is a good opportunity to look back at some of the devices and accessories that Apple discontinued throughout the year. Apple products discontinued in 2023 include the iPhone 13 mini, 13-inch MacBook Pro, MagSafe Battery Pack, MagSafe Duo Charger, and leather accessories. Also check out our lists of Apple products discontinued in 2022 and 2021. iPhone Mini ...
iOS 17

iOS 17.1.2 Update for iPhone Likely to Be Released This Week

Monday November 27, 2023 8:24 am PST by
Apple will likely release iOS 17.1.2 this week, based on mounting evidence of the software in our website's analytics logs in recent days. As a minor update, iOS 17.1.2 should be focused on bug fixes, but it's unclear exactly which issues might be addressed. Some users have continued to experience Wi-Fi issues on iOS 17.1.1, so perhaps iOS 17.1.2 will include the same fix for Wi-Fi...
iOS 17

28 New Things Your iPhone Can Do in December's iOS 17.2 Update

Friday December 1, 2023 2:57 am PST by
Apple made the first beta of iOS 17.2 available to developers in October. Since then we've seen three more betas, and with each iteration Apple continues to add more new features and changes, many of which users have been anticipating for quite a while. Below, we've listed 28 new things that are coming to your iPhone when the finalized version is publicly released this December. 1. Help...