Alleged cuts to iPhone 5c orders cited as Apple supplier Pegatron's profits disappoint
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.
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.
41 Comments
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.
And people say Apple products are too expensive, while their customers buy the more expensive model.
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.
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.
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!