Bad news continues to come out for Apple, whose stock was painfully closing at $176.8 (-0.1%) last night on Wall Street, after two sessions of sharp corrections. According to the Wall Street Journal today, Japanese telecom operators will receive subsidies from Apple, which they should use to reduce the lowest-priced device of the iPhone 2018 models even more. We talk about iPhone XR.
This information confirms a likely very disappointing launch of the device and will fuel fears of a more general slowdown in demand for Apple’s flagship product. “Less than a month after the release of the iPhone XR, Apple Inc. plans to offer subsidies to mobile network operators in Japan to support sales of its new cheapest smartphone,” says the WSJ.
This “promotion” on the most affordable device among the new ones, as well as the cuts in production plans, are a sign of limited consumer enthusiasm for this iPhone XR device, which displays fewer features than the other two new models released this year. Japanese GSM operators could reduce iPhone XR prices as early as next week.
iPhone XR Is A Huge Disappointment, And That Reflects In Apple Stock
Earlier this week, the Wall Street Journal reported that Apple had reduced production orders for the three iPhone 2108 models. It would have become more difficult for Apple to anticipate its needs in components and devices, in particular, due to a demand that’s lower than expected.
Yesterday, Foxconn, the world leader in electronic subcontracting, intended to reduce its costs by 20 billion Yuan (nearly $3 billion) in 2019, Apple’s supplier being confronted with “a very difficult and competitive year” according to Bloomberg. The Taiwanese group reported that it was carrying out a regular annual review of the budget for 2019.
Of course, such an adjustment could also increase concerns about the iPhone XR demand. Taiwanese spending on the iPhone models assembly activity is expected to fall by 6 billion Yuan in 2019, and the group is also reportedly considering cutting 10% of ‘non-technical’ jobs, added Bloomberg.
Jackson Bey was born and raised in Lethbridge Alberta but moved east when he was 22. Apart from running his own consulting firm. Jackson spends his time canoeing the many lakes of Ontario. As a financial journalist Jackson has published stories for CBC Business Online, as well as Buzz Feed and Motherboard. As a contributor to Billionaire 365, Jackson mostly covers markets and trade.