Apple, after seeing allegedly poor demand for the iPhone XR, has reportedly told assembly partners Foxconn and Pegatron to stop any preparations the firms are making for new smartphone production lines specifically for the recently-launched model.
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.
Share prices of Apple's suppliers in Asia slipped on Monday, after U.S. President Donald Trump tweeted in response to Apple's letter to the U.S. Trade Representative about the proposed Chinese tariffs, with the President calling a shift in production from China to the United States an "easy solution."
Foxconn will not only manufacture every second-generation, 5.8-inch OLED iPhone — sometimes dubbed the "iPhone XS" — but 90 percent of 6.5-inch "XS Plus" units, and 75 percent of a 6.1-inch LCD budget model, according to one research firm.
Several Taiwanese companies in Apple's supply chain — including processor maker TSMC, and assembly firm Pegatron — are insisting that a major blackout which hit the island on Tuesday did little to disrupt production, a serious concern given the imminent arrival of new iPhones.
Four of Apple's manufacturing partners — Hon Hai/Foxconn, Compal, Wistron, and Pegatron — have filed counterclaims against Qualcomm, accusing the chipmaker of violating two sections of the Sherman Antitrust Act.
In an interview published on Tuesday, a New York University graduate student described working at a Pegatron factory near Shanghai last year as a summer project, where he assembled the iPhone 6s and later the iPhone 7.
After a few months of revenue boosted by Apple production demands, manufacturing partner Pegatron's CEO says that the company could build the "iPhone 7s" and "iPhone 8" in the U.S. if it is asked to — but Apple would have to shoulder all of the company's costs for doing so.
The chairman of Apple supplier Pegatron has revealed that his company could expand its operations in the U.S. by three to five times, should it be necessary — but even that won't make much of a dent in Apple's iPhone and Mac production needs.