Apple, Inc. (NASDAQ: AAPL) ordered Pegatron and Foxconn to halt its plans for additional production lines dedicated to the iPhone XR. Shares of apple continue to fall from its financial statement last week. The cheapest of the three new iPhones have spurred investor concern as demand after its release has been weaker than expected.
The Nikkei, noting supply chain sources claimed that Apple had request iPhone assembler Wistron to standby for rush orders but that the company will receive no orders for the iPhone XR this season. “For the Foxconn side, it first prepared nearly 60 assembly lines for Apple’s XR model, but recently uses only around 45 production lines as its top customer said it does not need to manufacture that many by now,” the Nikkei quoted one source as saying.
Apple is considered Foxconn’s largest customer. “If the reports are accurate, we do find it somewhat disturbing that this would take place so early after the launch of the iPhone XR,” said Angelo Zino, an analyst at CFRA. “We did not witness any notable order push-outs for the iPhone XR after the initial week of its launch, which is the first time we can say that about a new phone release that took place in the fall,” Zino added.
The decline in Apple’s stock was “way overdone and undeserved,” said Tigress Financial Partners analyst Ivan Feinseth. “History has shown all kinds of statements made about Apple supply chain and the endless predictions of slowing of iPhone and other Apple product sales have been wrong,” said Feinseth, who rates Apple’s stock a “strong buy.”