Lumentum Holdings, one of the main suppliers of the Face ID technology used in Apple’s latest iPhones, cut its revenue forecast last week, suggesting that consumer demand for the new models is not as high as expected. New York-based the Wall Street Journal has now come up with a new report claiming Apple has cut production orders for all three 2018 iPhone models in recent weeks. The most affordable new iPhone released this year, iPhone XR has not received a great response either, with Apple reducing orders by up to a third recently.
iPhone XR, XS, and XS Max Sales Fail to Meet Expectations
The iPhone XR is the only new iPhone model this year to come with an LCD display and a single rear camera. Thanks to these downgrades, the iPhone XR is priced significantly lower than the iPhone XS and XS Max. The lower pricing was expected to make the iPhone XR even more popular than its more expensive siblings. Unfortunately, however, consumers do not seem very impressed by the device. Apple had initially planned to manufacture nearly 70 million iPhone XR units between September and February. That number has now been cut down by a third. Apple has reduced iPhone XS and iPhone XS Max orders as well in the recent past. While the iPhone XS and XS Max went on sale globally in September, Apple began selling the iPhone XR last month.
The Wall Street Journal report is certainly not surprising, as Apple had announced earlier this month that it will no longer provide unit sales figures for its iPhones, iPads, and Macs starting from the next quarter. Apple has also forecast a wide revenue range between $89 billion and $93 billion for the October – December quarter, hinting at uncertainty in the sales performance of its latest iPhones. While the lower demand for its new iPhones may not affect Apple too much, the company’s suppliers are certainly facing the heat.
iPhone Sales in India Set to Decline
Apple’s latest iPhones are priced significantly higher than the company’s previous models in India. The iPhone XR starts at INR 76,900 in India for the base storage variant, making it more expensive than pretty much all Android flagship smartphones. The iPhone XS starts at INR 99,990 for the 64GB storage variant, while the phablet-sized iPhone XS Max costs INR 1,09,900 for the 64GB storage variant. Hong Kong-based market research firm Counterpoint Research believes the high pricing of the 2018 iPhone models is the main reason behind the falling iPhone sales in India. Counterpoint expects iPhone sales in India to drop from three million units in 2017 to two million units this year. If their estimate is accurate, it would mark the first decline in iPhone sales in India in four years. It is also worth noting that nearly half of the iPhones sold in India are the more affordable older models. In the third quarter of the year, Apple was behind both Samsung and OnePlus in the premium smartphone segment in the country. That said, the high average selling price (ASP) of its iPhones allows the Cupertino-based firm to still make a lot of money. The combination of the high average selling price of iPhones and high Mac sales in India to hit $2 billion in revenue in India last year.