AppleInsider Staff
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].
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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162 Comments
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.
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.
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?
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?
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.