Malcolm Owen
Apple is reportedly changing its orders for the iPhone XR with its assembly partners, with some production being shifted from Pegatron to rival Foxconn over alleged capacity and component sourcing issues.
Capacity constraints and delayed shipments of key components is slowing down production of Apple's LCD-based iPhone XR for Pegatron, a report from the Chinese Economic Daily News spotted by DigiTimes claims. The problems have allegedly prompted Apple to make a change to how many of the devices each company produces, shifting some of the orders to Foxconn to retain the production rate.
According to the report, Pegatron had secured between 50 and 60 percent of total orders for the iPhone XR's assembly, while Foxconn apparently received around 30 percent. Now, it is claimed Apple has lowered Pegatron's proportion of orders to below 30 percent, while at the same time increasing Foxconn's orders "substantially."
Supply chain reports before the launch anticipated Foxconn would be producing 75 percent of the iPhone XR models, with Pegatron relegated to second-tier status and picking up the remainder.
The sudden shift in order proportions is apparently due to a number of factors negatively affecting Pegatron, including a lower-than-expected yield rate and a shortage of workers at its plants in China. In terms of components, the supply of LCD panels from Japan Display has apparently been unsteady, further affecting production.
Neither Pegatron nor Foxcon commented to the report about the claims.
Earlier reports suggest Apple is planning to increase capacity for the iPhone XR later in the year, with production boosted past the 50 percent ratio by December, and up to 20 million units in October. By comparison, shipments of the XS Max are expected to be around 4 to 5 million per month for some time, and accounting for roughly 20 percent of overall production.
Announced in September, the iPhone XR is a cheaper alternative to the iPhone XS and iPhone XS Max, sporting a 6.1-inch LCD display instead of OLED, while retaining many of the features found in its more expensive counterparts. Pre-orders will start on October 19, with models starting from $749 for 64GB of storage.
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5 Comments
Pegatron is cheaper, Foxconn is faster.
It would be interesting to see a side by side comparison. How much better is the OLED?
Also, a battery life comparison, plus a durability comparison.
It’s hard to imagine the OLED version being worth the extra $$$.
As always, it’s worth mentioning that DigiTimes is the tech industry version of Fake News.
So far, I've heard how no one will be buying the iPhone XR because of the display technology being tied to 2010. Supposedly, no one wants a display where the pixels can be seen from arms' length and have to pay $750 for the privilege. This is every reviewer's claim so I'd say Apple is doing something terribly wrong. My eye's vision is poor, so I wouldn't care but anyone with 20/20 vision is going to skip buying the iPhone XR and go Android. That's what's being claimed and I hope that's not going to turn out to be true. I'm not sure why Apple has to make such odd decisions but it really paints a nice big "don't buy" target on its back.
This story seems at odds with revenue projections from Pegatron themselves. According to them it's up 43% for November. Unless the production really did shift to Foxconn a couple months back only to be restored in November, which seems really unlikely but suppose could account for the revenue spike, I seriously doubt this story.