Alleged cuts to iPhone 5c orders cited as Apple supplier Pegatron's profits disappoint

Posted:
in iPhone edited January 2014
The launch of the iPhone 5c helped push Pegatron to record revenues last quarter, but pressure on margins and rumors of alleged order cuts for Apple's new plastic-backed handset have caused concern for the supplier.

iPhone 5c


Pegatron reported lower-than-expected third-quarter net profit on Monday, as costs associated with the ramp-up in production of the iPhone 5c affected the company's bottom line. While Foxconn has been Apple's primary assembly partner for years, Pegatron has nudged its way in with contract to build both the iPhone 5c and the iPad mini.

Two different major news organizations reporting on Pegatron's earnings on Monday both cited unnamed sources as saying that Apple has cut orders for the iPhone 5c. The new plastic iPhone model has seen "weak sales" since its launch in September, according to The Wall Street Journal, which has apparently led Apple to raise orders for the flagship iPhone 5s through assembly partner Foxconn.

Separately, Reuters also reported that Pegatron has been affected by "order cutbacks" for the iPhone 5c. Those alleged reductions were prompted by "less-than-stellar sales," the report said, and have left market watchers concerned about Pegatron's prospects for the end of 2013.

Rumors of disappointing iPhone 5c sales are not new, though it's possible that order revisions through Pegatron could have another explanation. Last week, it was reported that Apple is actually adding new suppliers for both the iPhone 5c and iPad mini to boost production in 2014. Specifically, Taiwan-based contract manufacturesr Wistron and Compal Communications are expected to join Foxconn and Pegatron has assemblers.



Speculation about iPhone 5c sales is partially driven by the fact that Apple does not break down sales figures for specific models, citing competitive reasons. The iPhone 5c and iPhone 5s both went on sale the same day in September, and reached sales of 9 million units in their first three days of availability.

Some market watchers believe the success of Apple's iPhone 5c lies in the long run, as early adopters are much more likely to buy Apple's flagship iPhone 5s, with the speedy A7 chip and Touch ID fingerprint sensor, than a plastic phone featuring components from last year's iPhone 5. The belief is casual smartphone buyers, who may not feel a need to upgrade as soon as Apple launches a new handset, will be drawn to the five color options available in the iPhone 5c lineup.
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Comments

  • Reply 1 of 41
    rogifanrogifan Posts: 10,669member
    Another day another anonymous source in the supply chain claiming iPhone 5C orders are being cut. And we'll get another thread full of posts complaining about cost, colors, etc. without anyone questioning the original story. Yawn.
  • Reply 2 of 41
    And people say Apple products are too expensive, while their customers buy the more expensive model.
  • Reply 3 of 41
    saareksaarek Posts: 1,133member
    Quote:

    Originally Posted by Rogifan View Post



    Another day another anonymous source in the supply chain claiming iPhone 5C orders are being cut. And we'll get another thread full of posts complaining about cost, colors, etc. without anyone questioning the original story. Yawn.

    Have you seen a single iPhone 5c in the wild, I've kept a keen look out on my daily commute/within my office and I am yet to see someone with a 5c.

     

    I've seen loads of 5s handsets though, I wonder if it is more popular in the US where hideously expensive contracts rule the roost and people may see it as good value.

  • Reply 4 of 41
    lol, they should have started with the Apple is adding new suppliers bit.. Apple's had issues with Pegatron several times now.. I suspect this 'rumor' is more disgruntled supplier talk as I highly doubt they have inside information on sales figures. They get the orders, they build it.. No reason for them to have sales info..

    All they know is Apple is not using them as they did, and I think they only have themselves to blame for it.. several 'labor' issues have come up with Pegatron in the past year.. You don't play by the rules, you loose the business.
  • Reply 5 of 41
    Quote:

    Originally Posted by saarek View Post

     

    Have you seen a single iPhone 5c in the wild, I've kept a keen look out on my daily commute/within my office and I am yet to see someone with a 5c.

     

    I've seen loads of 5s handsets though, I wonder if it is more popular in the US where hideously expensive contracts rule the roost and people may see it as good value.


    Yes, just saw several people buying them in the Apple store.. and on Twit a guy had one.. he preferred the 'red/pink' phone.. ick.. haha!

  • Reply 6 of 41
    512ke512ke Posts: 782member
    Apple is increasing production of the 5C.

    The 5C is a very successful phone that well outsells last years 4S that it replaces.

    Look at Apples last reported iPhone sales. The 5S was in limited supply. You don't get those fantastic numbers without healthy 5S sales.

    Maybe this article or the cited source is just trying to disparage Apple. They can't do it through facts. So why not just make stuff up?
  • Reply 7 of 41
    lkrupplkrupp Posts: 7,162member

    Looking for signs of Apple’s demise has become a cottage industry. Do other companies get this kind of scrutiny? Or is it just because we see more of it on tech websites?

  • Reply 8 of 41
    rogifanrogifan Posts: 10,669member
    saarek wrote: »
    Have you seen a single iPhone 5c in the wild, I've kept a keen look out on my daily commute/within my office and I am yet to see someone with a 5c.

    I've seen loads of 5s handsets though, I wonder if it is more popular in the US where hideously expensive contracts rule the roost and people may see it as good value.
    I have no idea because I don't pay attention to what phone someone is using.
  • Reply 9 of 41
    My friends just upgraded to 5C from 4 and 4S. They both got the white one and I've gotta say, it looks fantastic. I have a 5S myself, and the 5C is just as snappy and runs iOS 7 like a beast. It's just lacking the fingerprint sensor, improved camera with ability to take 120FPS, and the benefits that next-gen 64bit processing will bring. They also seem indestructible.

    However, IMHO, milled aluminum is aesthetically incredible.
  • Reply 10 of 41
    Wow, bad news, people are shunning cheaper iPhones in favor of more expensive and profitable ones This should send its stock down to new lows. /s/
  • Reply 11 of 41
    iaeeniaeen Posts: 588member
    Didn't we see an article about Apple hiring new suppliers for the 5C last week?
  • Reply 12 of 41
    I often wonder who starts these supply chain "leaks". I follow a few companies that manufacture products but I almost never see things about what's going on in their supply chains. Now Amazon has the Fire HDX and Bezos never releases Kindle sales numbers. I honestly have never heard about any supply chain numbers about Kindle production being tossed around. Seriously, why would suppliers be announcing cuts from a particular company when they're probably bound under contract not to let out that sort of information. When the original Surface RT was being sold, I know that I never read any stories about production cuts. Sure, I heard vague stories about lowered sales expectations but that's about it. With this article it talks about "cited cuts" but those cuts of the 5c production could also mean Apple had to use those production lines to increase 5s production which would be a good thing.

    I'm just saying the article is fishing to blame Apple for Pegatron's losses. Apple isn't Pegatron's only client. Pegatron was originally a subsidiary for Asus and they make all sorts of products such as motherboards, game consoles, netbooks, set-top boxes, etc. To pin their losses on 5c production cuts seems to be quite a stretch. Unless Pegatron actually came out and said their losses were caused by Apple 5c cutbacks, then there's no guarantee this article is valid at all. Unofficial unnamed sources blaming Apple don't mean a damn thing.
  • Reply 13 of 41
    Quote:
    Originally Posted by Rogifan View Post





    I have no idea because I don't pay attention to what phone someone is using.

     

    Well, I do pay attention, actually, close attention, and I have seen one. The most popular phone so far that I've seen in the wild has been the Iphone 5 followed by various Android phones, mainly Samsung, quite a few 5s (which still could outnumber any specific Android variety, not sure), some 4 or 4s and then, still, a few blackberries.

  • Reply 14 of 41
    flaneurflaneur Posts: 4,510member
    Well, I do pay attention, actually, close attention, and I have seen one. The most popular phone so far that I've seen in the wild has been the Iphone 5 followed by various Android phones, mainly Samsung, quite a few 5s (which still could outnumber any specific Android variety, not sure), some 4 or 4s and then, still, a few blackberries.

    That's a busy island you're a hermit on.
  • Reply 15 of 41
    flaneurflaneur Posts: 4,510member
    Here's the WSJ story not behind a paywall:

    edit: never mind, they shut that door.
  • Reply 16 of 41
    Quote:

    Originally Posted by Flaneur View Post





    That's a busy island you're a hermit on.

     

    Naw, it just tells me that a few people on here that say they are paying attention really aren't. ;)
  • Reply 17 of 41
    dcgoodcgoo Posts: 213member
    Quote:

    Originally Posted by saarek View Post

     

    Have you seen a single iPhone 5c in the wild, I've kept a keen look out on my daily commute/within my office and I am yet to see someone with a 5c.

     


     

    I see way more 5C on the street than the others. Very distinctive and easy to pick out. much easier than picking out a 5S out of the crowd of plain 5s.

  • Reply 18 of 41
    saareksaarek Posts: 1,133member
    dcgoo wrote: »
    I see way more 5C on the street than the others. Very distinctive and easy to pick out. much easier than picking out a 5S out of the crowd of plain 5s.
    Maybe it's just Cardiff then, one day I know I'll see one that's not in a shop window.
  • Reply 19 of 41
    rogifanrogifan Posts: 10,669member
    I often wonder who starts these supply chain "leaks". I follow a few companies that manufacture products but I almost never see things about what's going on in their supply chains. Now Amazon has the Fire HDX and Bezos never releases Kindle sales numbers. I honestly have never heard about any supply chain numbers about Kindle production being tossed around. Seriously, why would suppliers be announcing cuts from a particular company when they're probably bound under contract not to let out that sort of information. When the original Surface RT was being sold, I know that I never read any stories about production cuts. Sure, I heard vague stories about lowered sales expectations but that's about it. With this article it talks about "cited cuts" but those cuts of the 5c production could also mean Apple had to use those production lines to increase 5s production which would be a good thing.

    I'm just saying the article is fishing to blame Apple for Pegatron's losses. Apple isn't Pegatron's only client. Pegatron was originally a subsidiary for Asus and they make all sorts of products such as motherboards, game consoles, netbooks, set-top boxes, etc. To pin their losses on 5c production cuts seems to be quite a stretch. Unless Pegatron actually came out and said their losses were caused by Apple 5c cutbacks, then there's no guarantee this article is valid at all. Unofficial unnamed sources blaming Apple don't mean a damn thing.
    This is certainly not anything new. For two years now the media has been fishing for anything they could find to suggest demand for Apple products is soft. Same thing with all these labor stories....even though Foxconn and others manufacture for more than just Apple whenever there is a negative story these companies are always referred to as iPhone makers. It's all BS invented to drive negative sentiment stock price down. Heck some Wall Street firm just lowered their price target today citing weak 5C demand, even thought they admitted their "checks" show the 5C is selling better than the 4S was at this time last year.
  • Reply 20 of 41

    I have seen more people with a Lumia than I have with a iPhone 5c.  3-1

     

    Almost every person I see with an iPhone is the 5.

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