Apple reportedly would change its orders for the iPhone XR at its assembly partners, moving part of the production from Pegatron to Foxconn over alleged capacity and component sourcing problems.
Capacity limitations and delayed shipments of key components slow the production of Apple's LCD-based iPhone XR for Pegatron, a report from the Chinese Economic daily news spotted by DigiTimes conclusions. The problems have reportedly prompted Apple to make a change in the number of devices that each company produces, with some of the orders being shifted to Foxconn to maintain production speed.
According to the report, Pegatron had secured between 50 and 60 percent of the total orders for the assembly of the iPhone XR, while Foxconn apparently received about 30 percent. It is now claimed that Apple has reduced Pegatron's share of orders below 30%, while Foxconn's orders have increased "substantially" at the same time.
Supply chain reports for the launch expected Foxconn would produce 75 percent of the iPhone XR models, relegate Pegatron to secondary status and include the rest.
The sudden shift in order ratios is apparently due to a number of factors that have a negative impact on Pegatron, including a lower than expected revenue and a shortage of employees in its factories in China. As far as components are concerned, the supply of LCD screens from Japan Display has been apparently unstable, which has further influenced production.
Neither Pegatron nor Foxcon responded to the report on the claims.
Earlier reports suggest that Apple plans to increase its capacity for the iPhone XR later in the year, with production up 50 percent in December and up to 20 million units in October. By way of comparison: shipments of the XS Max are expected to be around 4 to 5 million per month for some time and account for about 20 percent of the total production.
Announced in September, the iPhone XR is a cheaper alternative to the iPhone XS and iPhone XS Max, with a 6.1-inch LCD screen instead of OLED, while retaining many of the features found in its more expensive counterparts. Pre-orders start on October 19, with models starting at $ 749 for 64 GB of storage.