iPhone XR Production Issues Cause Apple to Reallocate Orders Among Suppliers
Apple is reportedly shifting around iPhone XR orders amongst its manufacturing partners to ensure production issues don’t cause supply constraints when the smartphone officially launches late next month.
According to a Chinese-language Economic Daily News (EDN) report, Pegatron has lost up to half of its original iPhone XR orders to Foxconn, following delayed shipments of some key components and a shortage of workers at its plants in China.
Apple had originally divvied up between 50 and 60 percent of total orders for the lower-cost LCD iPhone to Foxconn, with Pegatron taking about 30 percent of orders. However, Apple has recently lowered the portion of iPhone XR orders allocated to Pegatron to below 30 percent, while ramping up those to Foxconn substantially.
On top of that, the supply of LCD panels from Japan Display (JDI) for the production of the iPhone XR has not been steady, according to the report. Pegatron and Foxconn declined to comment.
Morgan Stanley analyst Katy Huberty cautioned in July that Apple’s 6.1-inch LCD iPhone would not launch until October because of issues with backlight leakage, although it’s not clear whether the latest LCD supply constraints are down to the same problem.
The iPhone XR starts at $749 in the United States. The October launch means Apple will likely lose a few sales to customers this month who are interested in a new iPhone but don’t want to pay several hundred dollars more for the iPhone XS and XS Max, which start at $999 and $1,099, respectively. Because of this, Huberty saw Apple delivering a “slightly weaker-than-consensus September quarter.”
Global shipments of Apple’s new iPhone lineup are expected to exceed 85 million units in the second half of the year, with the more budget-friendly iPhone XR expected to account for over half of all sales.
Apple’s lower-spec iPhone XR features an edge-to-edge “Liquid Retina” LCD display with wide color and True Tone support, and the same all-screen design as the OLED-based iPhone Xs and Xs Max, but with an aluminum frame instead of stainless steel.
Other downgrades from the iPhone XS that make the XR cheaper include a single-lens rear facing camera instead of the dual lens on the XS, and a lack of 3D Touch support.
The lower-priced iPhone XR becomes available to order on Friday, October 19, with orders shipping the following Friday, October 26.
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