Apple rumored to have restarted iPhone X production, but motive not clear

Posted:
in iPhone edited November 2018
Apple has restarted production of last year's iPhone X, according to one of the nation's most prominent financial publications, which claims the company is doing so out of international demand and a questionable obligation to fill a sales quota with OLED supplier and smartphone rival Samsung.

iPhone XS Max and iPhone X
iPhone XS Max and iPhone X


The iPhone X was removed from sale in Apple Stores around the world following the introduction of the iPhone XS and iPhone XS Max, with an expectation that consumers would want to acquire the more recent product launches. For models that are effectively entirely replaced by a newer version, production for older variants typically reduce down to match the lower levels of demand, or cease entirely.

According to sources of the Wall Street Journal, Apple has resumed production of the iPhone X. While it is unclear exactly why production has recommenced, a person familiar with Apple's sales and production tactics advised the report that Apple does produce legacy models for select markets where there is enough demand.

The production is a way to fuel sales and increase margins, the sources advise, with components for the iPhones typically costing less to produce or acquire, and with manufacturing equipment depreciated in value to make production viable again.

An example of this is Apple's production with Wistron in India, where the manufacturing partner is producing the iPhone 6s in the country alongside the iPhone SE. In June, it was estimated the iPhone 6 series accounts for a third of iPhone sales in India.

The report also suggests the resumption of iPhone X production is in part caused by Apple's contract with Samsung SDI for the production of OLED panels used in the iPhone X, iPhone XS, and iPhone XS Max. Apple is supposedly required by contract to buy a minimum amount of OLED panels from Samsung, and due to alleged cuts in the iPhone XS and iPhone XS Max production, Apple has turned to the iPhone X to use up the remainder of the supply.

This claim is dubious for a few reasons, with a key element being the improbability that Apple would not protect itself from such minimum orders to such a level it would require the manufacturing of older hardware. Considering the price of the iPhone XS at launch mirrored the cost of the iPhone X, as well as the considerable similarity of the two models, it seems even more unlikely that consumers would elect for an iPhone X over an iPhone XS or iPhone XR.

The talk of new iPhone X production is part of a report claiming Apple is cutting the price of the iPhone XR in Japan to boost its sales, with carriers in the country apparently set to start reducing the cost of the handsets from early next week.

Carrier officials believe it is rare for Apple to perform a price cut on a recently-released device in the market, though it has done so before. "A price cut within a month of release is rare not just for Apple but for smartphone makers in general," one senior official advised.

Japanese consumers are said to claim the iPhone XR's price is too high for the sacrifices it makes in display quality, cameras, and slower transmission speed. The iPhone 8, a 2017 release, is reportedly still popular in the country for those looking for an affordable iPhone, as it is both cheaper than the iPhone XR and was available at the time of the iPhone XS and iPhone XS Max launches.
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Comments

  • Reply 1 of 60
    gatorguygatorguy Posts: 20,445member
    I thought I remembered reading here in some AI story that the reason the X was discontinued in the first place was the higher production costs compared to the XS and XR. 
  • Reply 2 of 60
    wood1208wood1208 Posts: 1,931member
    Only reason I think of is $100 price difference for consumers and for Apple lower cost of production due to possible reasons explained in article. Bottom line $ savings on both sides.
    netmage
  • Reply 3 of 60
    croprcropr Posts: 924member
     
    The report also suggests the resumption of iPhone X production is in part caused by Apple's contract with Samsung SDI for the production of OLED panels used in the iPhone X, iPhone XS, and iPhone XS Max. Apple is supposedly required by contract to buy a minimum amount of OLED panels from Samsung, and due to alleged cuts in the iPhone XS and iPhone XS Max production, Apple has turned to the iPhone X to use up the remainder of the supply.


    Both Samsung and Apple are big companies, prepared to play it hard.  Samsung does not depend only on the sales of OLED screens (like many other suppliers of Apple do).  Being the sole supplier of OLED screens for Apple during the contract negotiations, Samsung was in the easier seat.

    I could imagine that if Apple was playing it hard in terms of costs, that Samsung replied back with strong commitments on volume.  We of course don't know the exact details of the supply contract, but there might be some truth in this scenario.
    edited November 2018 mbenz1962avon b7forgot username
  • Reply 4 of 60
    Apple just enhances the mid-range, alongside the 8 series. Wise move.

    A12 Bionic for high-end: XR, XS, XS Max.
    A11 Bionic for mid-range: 8, 8 Plus, X.
    A10 Fusion for low-end: 7, 7 Plus.

    If Apple places the X at the same slot as the XR ($749) that would be great ;-) That may require some tweaking with the storage. But there is an "empty" slot between the XR (749) and the XS (999), most probably the X will go there: 799-849. If that happens then my classification above will be no longer valid and we'll understand that Apple considers all the Xx series as high-end.
    edited November 2018 cornchip
  • Reply 5 of 60
    I see a lot of people suggesting the XR is a failure even comparing to to the 5C. Some claim it’s the poor mans iPhone X. Funny how nobody said this when the phone was launched. Even with reviews I didn’t see anyone arguing it would be viewed as a lesser XS. In fact many argued it would be the best selling model because it had the best battery life, came in colors, was cheaper and the XS looked the same as the X with only incremental improvements. Now it’s the 5C all over again? Give me a break.
    DAalsethn2itivguycanukstormMisterKitpbruttomagman1979jcs2305bb-15
  • Reply 6 of 60
    ...
    The talk of new iPhone X production is part of a report claiming Apple is cutting the price of the iPhone XR in Japan to boost its sales, with carriers in the country apparently set to start reducing the cost of the handsets from early next week.

    Carrier officials believe it is rare for Apple to perform a price cut on a recently-released device in the market, though it has done so before. "A price cut within a month of release is rare not just for Apple but for smartphone makers in general," one senior official advised.

    Japanese consumers are said to claim the iPhone XR's price is too high for the sacrifices it makes in display quality, cameras, and slower transmission speed. The iPhone 8, a 2017 release, is reportedly still popular in the country for those looking for an affordable iPhone, as it is both cheaper than the iPhone XR and was available at the time of the iPhone XS and iPhone XS Max launches.
    Price cuts in international markets depend mostly on currency fluctuations, that has nothing to do with Apple's product positioning or the quality/outcome of the XR. Apple also may set price slots differently in different countries and adjust these as necessary.
    n2itivguyStrangeDayselijahgbb-15
  • Reply 7 of 60
    More evidence that prices are too high across the board. The phones are not the problem; the prices are. Half of the iPhone’s price increase since it was released a decade ago has come in the last year alone.  
    trackerozatomic101elijahgmuthuk_vanalingamasdasdapplecored
  • Reply 8 of 60
    All of this is assuming that any of this is true.
    There is an article on AI just below this one saying how Qualcomm,  hired a company to seed bogus Apple stories. 
    https://appleinsider.com/articles/18/11/22/tim-cook-for-president-and-other-campaigns-from-qualcomms-pr-bulldog
    tmaychasmforgot usernamefocher
  • Reply 9 of 60
    gatorguygatorguy Posts: 20,445member
    DAalseth said:
    All of this is assuming that any of this is true.
    There is an article on AI just below this one saying how Qualcomm,  hired a company to seed bogus Apple stories. 
    https://appleinsider.com/articles/18/11/22/tim-cook-for-president-and-other-campaigns-from-qualcomms-pr-bulldog
    It actually doesn't claim that any Qualcomm-funded stories (if there are any, it's a rumor AFAICT) are bogus does it? AI says they're negative stories and/or slants rather than false ones. 
    muthuk_vanalingam
  • Reply 10 of 60
    Rayz2016Rayz2016 Posts: 4,564member
    Dead_Pool said:
    More evidence that prices are too high across the board. 
    Well, since it’s just a rumour, it’s not actually proof of anything. 

    Just so you know how this “rumour” thing works. 
    edited November 2018 StrangeDaysnetmagepbruttoracerhomie3elijahgcornchipbb-15
  • Reply 11 of 60
    Dead_Pool said:
    More evidence that prices are too high across the board. The phones are not the problem; the prices are. Half of the iPhone’s price increase since it was released a decade ago has come in the last year alone.  
    We won't know if it's evidence (or not) until Apple reports their financial results for the holiday quarter.
    netmagecornchipbb-15
  • Reply 12 of 60
    Unfortunately due to currency fluctuations, this year’s iPhone X would be the same price as last year’s iPhone X in many countries.
    pbruttobb-15
  • Reply 13 of 60
    I see a lot of people suggesting the XR is a failure even comparing to to the 5C. Some claim it’s the poor mans iPhone X. Funny how nobody said this when the phone was launched. Even with reviews I didn’t see anyone arguing it would be viewed as a lesser XS. In fact many argued it would be the best selling model because it had the best battery life, came in colors, was cheaper and the XS looked the same as the X with only incremental improvements. Now it’s the 5C all over again? Give me a break.
    Also, the 5C was sold very well. Per AI and other sources, it was the #2 selling handset in carrier stores, second only to the....5S flagship.

    https://appleinsider.com/articles/13/10/04/apples-iphone-5s-tops-sales-charts-at-big-4-us-carriers-iphone-5c-close-behind
    netmageMisterKitmagman1979racerhomie3cornchipbb-15
  • Reply 14 of 60

    Dead_Pool said:
    More evidence that prices are too high across the board. The phones are not the problem; the prices are. Half of the iPhone’s price increase since it was released a decade ago has come in the last year alone.  
    Actually, you’re wrong - the only “evidence” is Apple’s record profits, which suggest the price on iphones has been too *low*, as explained by Warren Buffet. Read up.

    Just because you want things for free or cheaply, doesn’t mean there’s a problem. It’s good to want things. 
    edited November 2018 netmagepbruttomagman1979radarthekatracerhomie3elijahg
  • Reply 15 of 60
    Maybe they had to make more devices due to the quality program for the X displays that either stop working or develop lines on the display.  There might be a larger amount of phones that will need whole unit replacements if the repair fails. 

    https://www.apple.com/support/iphone-x-display-module-replacement-program/

    pbruttomuthuk_vanalingam
  • Reply 16 of 60
    avon b7avon b7 Posts: 3,648member
    I can only speak about pricing from my own perspective and state that I backed off from a new XR purely on that point.

    If it had topped out at 749€ I would have got one. The problem is that tha final retail price is touching 900€ after sales tax here.

    It wouldn't surprise me if Europeans have reacted in the same way as me.

    In terms of value I feel the XR is lacking but 749€ would have got the sale nevertheless for other reasons. At current end-pricing it is a no go.
    elijahg
  • Reply 17 of 60
    avon b7 said:
    I can only speak about pricing from my own perspective and state that I backed off from a new XR purely on that point.

    If it had topped out at 749€ I would have got one. The problem is that tha final retail price is touching 900€ after sales tax here.

    It wouldn't surprise me if Europeans have reacted in the same way as me.

    In terms of value I feel the XR is lacking but 749€ would have got the sale nevertheless for other reasons. At current end-pricing it is a no go.
    I'm the opposite. I actually think the XR offers the most in terms of value vs the iPhone 8 Plus and the iPhone XS series even though the starting price is $1,029 (before sales tax) here in Canada.  The screen, performance, camera, build quality are all great..  Plus the option of different colors gives the XR its own personality.
    edited November 2018 magman1979bb-15
  • Reply 18 of 60
    avon b7 said:
    I can only speak about pricing from my own perspective and state that I backed off from a new XR purely on that point.

    If it had topped out at 749€ I would have got one. The problem is that tha final retail price is touching 900€ after sales tax here.

    It wouldn't surprise me if Europeans have reacted in the same way as me.

    In terms of value I feel the XR is lacking but 749€ would have got the sale nevertheless for other reasons. At current end-pricing it is a no go.
    €859 incl. €151 tax. 859 - 151 = €708. 708 EUR in USD = 807.67. The difference from the US store is only $50. Now take this $50 and please shut up.
    magman1979radarthekatStrangeDaysbb-15
  • Reply 19 of 60
    Maybe they had to make more devices due to the quality program for the X displays that either stop working or develop lines on the display.  There might be a larger amount of phones that will need whole unit replacements if the repair fails. 

    https://www.apple.com/support/iphone-x-display-module-replacement-program/

    Your linked article says nothing about display issues - did you expect no one to click? It says the touch controller could develop problems and require repair.
    edited November 2018 macpluspluselijahg
  • Reply 20 of 60
    I think many analysts overlook the used iPhone market

    "From “How is the iPhone installed base growing double digits with no unit growth?,” a note sent to clients Tuesday by analyst Wamsi Mohan:

    We view the installed base (IB) as a key indicator of the eventual potential of the Apple ecosystem. In our opinion the following points are the most important to consider in evaluating the long term potential for Apple:

    (1) Size of the global iPhone IB of about 1 billion units by the end of 2018 (about 750mn primary and 270mn in the used iPhone IB),

    (2) Installed base CAGR [compound annual growth rate] over the past 2 years is 15%, primarily driven by strong double-digit growth in the used iPhone IB (2-year CAGR of 61% y/y, albeit off of a small base), while the new iPhone installed base has grown at a mid-single digit CAGR (6% y/y),

    (3) Future growth in IB will largely come from the used phone market which can be a detractor to primary phone sales,

    (4) A larger installed base can eventually drive higher consumption of services and sales of incremental devices (halo effect),

    (5) The elongation of replacement cycles is additive to IB growth but the onus of unit growth will fall on Android switchers and first-time smartphone buyers (primary only), and

    (6) Secondary market growth presents a large services opportunity but currently even primary market services attach is relatively low."


    https://www.ped30.com/2018/11/22/merrill-lynch-used-iphones-apple/

    magman1979racerhomie3mattinozcornchip
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