Apple reportedly cutting iPhone 5c orders as it boosts 5s production [u]

Posted:
in iPhone edited January 2014
The Wall Street Journal reported on Wednesday that Apple has modified its iPhone supply chain forecast for the upcoming fourth quarter, reducing 5c orders from its two manufacturing partners, Foxconn and Pegatron, while bumping production of the 5s [updated with another affirmation].

iPhone 5c


Citing sources familiar with the matter, the WSJ claims Apple notified both suppliers that it would be cutting iPhone 5c shipments for the fourth quarter, with Pegatron seeing orders reduced by less than 20 percent, while Foxconn will cut production by roughly one third.

Update: Also on Wednesday, Reuters published its own separate story citing its own supply chain source, who also reportedly said that Apple has cut fourth-quarter orders for the iPhone 5c.

Analysts estimate Pegatron makes two thirds of all iPhone 5c units, while Foxconn handles the remaining third, the report said. As a result of the trimmed orders, Foxconn has purportedly stopped hiring new workers.

In addition to the assembly line slowdown, one iPhone 5c component supplier received word that orders would be slashed by 50 percent. It should be noted, however, that orders placed with a single supplier may not be an accurate gauge of consumer demand.

Seemingly buried in the WSJ article is mention of two Foxconn executives who said that along with the iPhone 5c cuts, Apple has raised orders for the more profitable iPhone 5s. The publication did not elaborate on specific numbers or how they compared to the 5c drawdown.

Wednesday's report aligns with recent retail inventory checks that showed iPhone 5c supply holding steady, while stock of the higher priced iPhone 5s continued to dwindle. KGI analyst Ming-Chi Kuo also slashed his iPhone 5c shipment model by 33 percent for the September quarter.

Apple introduced the pair of new iPhones at a special event in September, with the 5c priced as a mid-tier offering and the 5s positioned as the company's flagship model. The handsets combined to reach a record breaking nine million unit sales over the first three days of availability, though Apple declined to offer a per-device breakdown.
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Comments

  • Reply 1 of 162
    5c is just too expensive compared to 5s. Should I upgrade I'll gladly pay $100 extra for a phone that seems to last longer, processor wise. So I don't have to upgrade my phone in 2015, but maybe 2017 and switch to a sim only account.
    There is a crisis going on.
  • Reply 2 of 162
    agreed.

    I love the diversification: for the colourful (for young and colourful people) and the business/Pro model 5s. However, people evaluate:
    - a slight price difference,
    - a steep generation difference (especially with the 64bit and the TouchID)

    and conclude that the 5s is a better investment since it will have a longer lifecycle.
  • Reply 3 of 162
    sflocalsflocal Posts: 4,652member
    Quote:

    Originally Posted by AppleInsider View Post


    It should be noted, however, that orders placed with a single supplier may not be an accurate gauge of consumer demand.

     



    Of course... that little tidbit won't stop people from publishing such nonsense.



    I miss the days of "real" journalism.  This is just crap one would find on-par with the National Enquirer.  Any articles about "Bat Boy" by any chance?

  • Reply 4 of 162
    entropysentropys Posts: 1,751member
    I suspect apple is heartbroken if people are prepared to pay for a higher margin product. Heartbroken.

    That said, is the 5C selling as well as a 4S a year ago? Or better?

    Is this carry on just a short seller strategy?
  • Reply 5 of 162
    The comments by milting & racingbull indicate that Apple has got its pricing right with the 5C.

    The more affordable 5C attracts people wanting/aspiring to a new iPhone but on careful consideration they feel that the extra is worth it for the state of the art 5S, the most advanced smartphone around.

    Also retailers discounts for the 5C attracts and pulls in potential buyers to stores, many of whom also upgrade to the 5S.

    As racingbull rightly says, the 5S a better investment and will command a significantly higher trade in value, making it cheaper in the long run.

    Both the 5S and 5C have similarly high margins for Apple, but more people moving to 64 bit, Touch ID and motion sensor M7 chip create new opportunities for developers. There will be a rush of new, high quality Apps making use of these new features, greatly increasing the already large quality gap between iOS Apps, compared to inferior Android Apps.
  • Reply 6 of 162
    djsherlydjsherly Posts: 1,020member
    Quote:

    Originally Posted by Secular Investor View Post



    The comments by milting & racingbull indicate that Apple has got its pricing right with the 5C.



    The more affordable 5C attracts people wanting/aspiring to a new iPhone but on careful consideration they feel that the extra is worth it for the state of the art 5S, the most advanced smartphone around.



    Also retailers discounts for the 5C attracts and pulls in potential buyers to stores, many of whom also upgrade to the 5S.



    As racingbull rightly says, the 5S a better investment and will command a significantly higher trade in value, making it cheaper in the long run.



    Both the 5S and 5C have similarly high margins for Apple, but more people moving to 64 bit, Touch ID and motion sensor M7 chip create new opportunities for developers. There will be a rush of new, high quality Apps making use of these new features, greatly increasing the already large quality gap between iOS Apps, compared to inferior Android Apps.

     

    This reasoning is just as made up as any 'analysts'. 

     

    What it says is that Apple quite happily developed tooling for, and produced, millions of 5Cs so that it would sit on shelves and entice people to buy the 5S instead. Seriously?

     

    What it also says it that there is little reason to buy the 5C. Which is evidently true if the newspaper is to be believed and production is being cut back.

     

    BTW, the touch id is pretty cool, but I find it's rejecting my fingerprints more often after a week or so of use. Initially it was spot on.

  • Reply 7 of 162
    Quote:

    Originally Posted by miltenb View Post



    5c is just too expensive compared to 5s. Should I upgrade I'll gladly pay $100 extra for a phone that seems to last longer, processor wise. So I don't have to upgrade my phone in 2015, but maybe 2017 and switch to a sim only account.

    There is a crisis going on.

    This is a lot of peoples argument against the 5c, but it has no backbone.

     

    Nobody complained about the 4S when the 5 was around. There was a $100 difference then. If you were buying a new upgrade, it makes sense for $100 to get the latest.

     

    Oh, and it was the same with the previous generation, and generation before that, and generation before that.

     

    Only now people are complaining about price. Why? Because loser analysts started a rumour that it was going to be radically cheaper. They were wrong. Yet people still talk about price. Pretty ridiculous, really.

     

    The only comparisons people should make are what is different. The iPhone 5c takes what would of been the iPhone 5's spot (mid tier). The iPhone 5c comes in 5 coloured plastics, it has a slightly better battery and supports many, many more 4G base bands. So Apple has upgraded the 5, for free, as it is the same price as what the 5 would of been.

     

    /rant

  • Reply 8 of 162
    The iphone 5c could have been popular if they made them in colored metal like the touch. Plastic seems too synonymous with cheap.
  • Reply 9 of 162

    I don't mind plastic.  It's quality plastic.  It is a quality product.

     

    Logically, they'd can the iPod Touch and just add a phone receiver and price it for another £100 at the low end and another £150-ish at the high end.  Children and teens would have a great phone...in alu colours.  The 5C is in some ways bemusing.

     

    The iPod touch is the best designed mobile product they have.  It's slim, beautiful and trumps even the 5S design.  The Touch is light and curved alu back.  For me, it's a far better design.  

     

    You'd have phones in the £200-£350 range.

     

    How much would it cost to add a phone receiver to the iPod Touch?  No, seriously, I'm asking.  Anyone know?

     

    Lemon Bon Bon.

  • Reply 10 of 162

    And at £350, I don't think that's 'cheap' either.

     

    The iPod Touch doesn't look 'cheap' does it?  ANd what price does it start at?   What price did the original iPod start at?

     

    Lemon Bon Bon.

  • Reply 11 of 162
    Quote:

    Originally Posted by ayani1 View Post



    The iphone 5c could have been popular if they made them in colored metal like the touch. Plastic seems too synonymous with cheap.

    And reception antennas go where? Remember that the first iPhone had an aluminum back but also a pretty large plastic area for the antennas. With the current different bands inside the iPhone, that plastic area would be even bigger.

  • Reply 12 of 162

    Apple once sold the iMac for £595 here in the UK.  inc VAT.

     

    Even that wasn't as 'cheap' as some desktops are now at £399.

     

    It shows Apple can make quality products at lower prices.

     

    Now that they have the volume...it seems more about Shareholders than Customers in some ways.

     

    Lemon Bon Bon.

  • Reply 13 of 162

    Apple have tried to pad their margins with the 5C in my view.  £465 is it?  

     

    Lop one hundred off and you're talking for a 'year old' phone.  If they can make the 4S at £350 then Apple CAN make a £350 phone.

     

    It would fly at those prices.  And take the fight to Android and still make a decent profit.

     

    There just isn't enough difference to not warrant going for the extra for the 5S which is a far superior product.

     

    Lemon Bon Bon.

  • Reply 14 of 162
    I don't mind plastic.  It's quality plastic.  It is a quality product.

    Logically, they'd can the iPod Touch and just add a phone receiver and price it for another £100 at the low end and another £150-ish at the high end.  Children and teens would have a great phone...in alu colours.  The 5C is in some ways bemusing.

    The iPod touch is the best designed mobile product they have.  It's slim, beautiful and trumps even the 5S design.  The Touch is light and curved alu back.  For me, it's a far better design.  

    You'd have phones in the £200-£350 range.

    How much would it cost to add a phone receiver to the iPod Touch?  No, seriously, I'm asking.  Anyone know?

    Lemon Bon Bon.

    The issue with trying to add antennas to the touch is that you need space.

    Space for the antennas and sim tray obviously, but more important space for a bigger battery to keep a constant connection to a cellular network, which i guess is why we are left with the 5s design.
  • Reply 15 of 162
    matrix07matrix07 Posts: 1,993member
    WSJ. Enough said. A tiny bit better than Digitimes. Anything sourced from this is not worth a discussion IMO.
  • Reply 16 of 162
    blackbookblackbook Posts: 1,361member
    I've seen a few 5Cs in the wild now. A friend of a friend bought a blue model.

    I was looking at it yesterday and I really can't bring myself to like it.

    It looks and feels cheap, considering nowadays you can get an HTC One for the same price as the 5C.
  • Reply 17 of 162
    saareksaarek Posts: 1,133member
    Quote:

    Originally Posted by MazeCookie View Post

     

    This is a lot of peoples argument against the 5c, but it has no backbone.

     

    Nobody complained about the 4S when the 5 was around. There was a $100 difference then. If you were buying a new upgrade, it makes sense for $100 to get the latest.

     

    Oh, and it was the same with the previous generation, and generation before that, and generation before that.

     

    Only now people are complaining about price. Why? Because loser analysts started a rumour that it was going to be radically cheaper. They were wrong. Yet people still talk about price. Pretty ridiculous, really.

     

    The only comparisons people should make are what is different. The iPhone 5c takes what would of been the iPhone 5's spot (mid tier). The iPhone 5c comes in 5 coloured plastics, it has a slightly better battery and supports many, many more 4G base bands. So Apple has upgraded the 5, for free, as it is the same price as what the 5 would of been.

     

    /rant


    True but the 4s had the same glass and aluminium construction, the 5c has a cheaper plastic case. It should be cheaper.

  • Reply 18 of 162
    Apple may have some difficulty determining why the 5c has not sold as well as expected. The plastic, the price, the marketing that it was just a 5 with color (it's not).

    I do think that the 5c may have contributed to the 5s success, assuming the numbers are good. It was the contrast between the two that spurred sales of the 5s, it can be argued. But that is speculation at this point. Is it possible to decide?
  • Reply 19 of 162
    asdasdasdasd Posts: 5,312member
    mazecookie wrote: »
    This is a lot of peoples argument against the 5c, but it has no backbone.

    Nobody complained about the 4S when the 5 was around. There was a $100 difference then. If you were buying a new upgrade, it makes sense for $100 to get the latest.

    Oh, and it was the same with the previous generation, and generation before that, and generation before that.

    Only now people are complaining about price. Why? Because loser analysts started a rumour that it was going to be radically cheaper. They were wrong. Yet people still talk about price. Pretty ridiculous, really.

    The only comparisons people should make are what is different. The iPhone 5c takes what would of been the iPhone 5's spot (mid tier). The iPhone 5c comes in 5 coloured plastics, it has a slightly better battery and supports many, many more 4G base bands. So Apple has upgraded the 5, for free, as it is the same price as what the 5 would of been.

    /rant

    The problem with this reasoning is simple - it doesn't explain why Apple didn't continue with the old strategy and created two models. Despite what you say the two models strategy is not the same at all - for instance the iPhone 5C will be updated as long as the 5S is with new OS releases. As the release is the same year.

    Clearly apple expected higher sales from this, hence the cut in orders. Would orders have to be cut were the iPhone 5 C $200 cheaper than the 5S. Probably not.

    If the high price of the 5C is driving higher than expected 5S sales apple will be happy enough for now, for Christmas and Chinese New Years. They can offer discounts in
    Feb.

    However unless these reports are wrong Apple miscalculated, and having too much inventory in the Channel is not a good thing.

    Why did they miscalculate? That should be the question as it seems critics of the price were correct.
  • Reply 20 of 162
    djsherlydjsherly Posts: 1,020member
    Quote:

    Originally Posted by waldobushman View Post



    Apple may have some difficulty determining why the 5c has not sold as well as expected. The plastic, the price, the marketing that it was just a 5 with color (it's not).



    I do think that the 5c may have contributed to the 5s success, assuming the numbers are good. It was the contrast between the two that spurred sales of the 5s, it can be argued. But that is speculation at this point. Is it possible to decide?

     

    It could be interpreted as a bit of cynical move. Put the same guts in a new shell and call it the best thing since whatever. That was certainly my first thought. Struck me as a bit of a piss take.

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