Apple shares sank as much as 4.5% Monday following a report that the tech giant has scaled back production orders for its new entry-level iPhone XR model.
The company’s stock drop — pushing Apple’s market cap below $1 trillion — comes after shares closed down 6.6% last Friday, to $207.48 per share, as investors reacted to the September quarter earnings results with lower iPhone unit sales and weaker-than-expected December quarter revenue guidance. On Monday (Nov. 5) at 11 a.m. ET, the stock was down 3.0%, to $201.33 per share.
According to a report Monday by Japan’s Nikkei, Apple “signaled disappointing demand” for the iPhone XR by informing manufacturing partners Foxconn and Pegatron to halt plans for additional production lines of the smartphone targeted at price-conscious consumers. That suggested a 20%-25% reduced forecast in unit sales, per the Nikkei report, which cited anonymous sources.
The drop in Apple’s shares since last Thursday has cut its market cap by more than $100 billion. Even so, the company still has the biggest market valuation of any company in the world.
The iPhone XR — priced starting at $749 — is meant to replace the iPhone 8 introduced a year ago. The XR model borrows its looks from the iPhone X and features an all-screen glass and aluminum design with a 6.1-inch Liquid Retina LCD display.
The XR model went on sale on Friday, Oct. 26, after Apple unveiled the new model along with the pricier iPhone XS and XS Max in September. It’s available in six different colors: white, black, blue, coral, yellow, and red.
In discussing the September quarter results, Apple CFO Luca Maestri said the company will stop reporting unit sales, which Wall Street has long used as a barometer to measure the health of its hardware businesses.
Through the 2018 holiday shopping season, Apple is reviewing iPhone demand weekly “to adjust orders quickly in response to the market,” according to the Nikkei report.