Apple cuts production of iPhone XR after seeing poor demand for the 'budget' $749 phone

Apple has told its main smartphone assemblers to stop plans for additional production lines of the iPhone XR, a new report claims.

The order to Foxconn and Pegatron may signal disappointing demand for the most affordable handset in Apple's new iPhone lineup, the Daily Mail reports, citing the Nikkei Asian Review which had talked to sources close to the situation. 

It comes as the iPhone XR hit the shelves just a few weeks ago.

“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,” an anonymous source told the Nikkei.

This means it would produce about 100,000 fewer units daily to reflect reduced demand - down 20 percent to 25 percent from the original projections. 

Production plans have been similarly cut back for fellow Apple manufacturer Pegatron. 

Wistron, another iPhone assembler, was told it will not receive any orders for the iPhone XR, the Nikkei reported. 

Instead, Apple has asked to ramp up production of the iPhone 8 and iPhone 8 Plus models, which Foxconn and Pegatron also oversee. 

“Suppliers of iPhone 8 and iPhone 8 Plus are getting a combined order of around 5 million more units,” a source told the Nikkei. 

Apple had planned to produce 20 million units of older iPhone models, but upped that number to 25 million units. 

At its iPhone launch event in September, Apple introduced the lower-cost iPhone XR, made of aluminum, along with two other models, the XS and XS Max.  

The firm hoped the iPhone XR would persuade owners of older iPhones to switch to the newer model, which costs $749 (£749) - a sizable discount from the $999 iPhone XS and the $1099 XS Max. 

The 2017 iPhone 8 and iPhone 8 Plus are still cheaper, however, at $600 and $700, respectively.  

It comes as Apple said last week it didn't sell as many iPhones as analysts had expected and warned that sales for the crucial holiday quarter would likely miss projections as well.