Apple Cutting iPhone 5c Production at Two Major Suppliers

[MacRumors]

Apple has notified two of its major iPhone 5c suppliers that it is reducing orders of the smartphone for the fourth quarter, reports The Wall Street Journal. Taiwanese assemblers Pegatron and Foxconn (also known as Hon Hai Precision Industry Co.) were given notice by Apple that fourth quarter production of the device would be slowed, with the former being told orders would be cut by less than 20% and the latter being told that orders would be cut by one-third of the original production. A report by Reuters corroborates the claim of production cuts at Pegatron.

Apple told its Taiwanese assemblers Pegatron Corp. and Hon Hai Precision Industry Co. that shipments of the iPhone 5C in the fourth quarter would be cut, the people said. Pegatron, which analysts say assembles two thirds of the iPhone 5Cs, was told orders would be cut by less than 20%, said a person familiar with the matter. Hon Hai, which assembles the remaining low-cost iPhones, was told orders would be cut by a third, said two people familiar with the matter.

One component supplier was notified of a 50% cut in orders for iPhone 5C parts, which analysts say could suggest a slowdown in device shipments next year, or mean an inventory reduction by assemblers.

Reflecting continued tight supplies of the higher-priced iPhone 5s, sources at Foxconn have also indicated that Apple has requested an increase in production for those models.

Apple's notice to suppliers comes after various reports about the iPhone 5C's market demand and production over the past month, with one report stating last week that Apple was cutting iPhone 5c production from 300,000 units to 150,000 units per day, as the iPhone 5c seeing much greater availability compared to the iPhone 5s. New data from the Consumer Intelligence Research Partners last week also stated that the iPhone 5s has been outselling the iPhone 5c by more than a two-to-one margin since the launch of both devices last month.

It remains difficult to say, however, whether Apple's cuts are a result of lower than expected demand or perhaps simply part of a planned scaling back following an initial surge to ensure that distribution channels are adequately filled heading into the holiday season. With strong availability of the iPhone 5c continuing, a number of third-party retailers have been discounting the device in order to entice customers.

Apple announced last month that the iPhone 5s and iPhone 5c had sold a record nine million units during their launch weekend, but the company did not break down the sales distribution between the two models. However, a report from earlier this month stated that the iPhone 5c finished second in sales during the month of September at US carriers AT&T and Sprint, and finished within the top three in sales at all four major carriers, which suggests that the lower-cost iPhone is at least selling fairly well.

Article Link: Apple Cutting iPhone 5c Production at Two Major Suppliers

 

[JaySoul]

Don't cut the supplies - cut the price.

 

[tomtendo]

Doesn't mean much. Rush is over from the initial release. And I'm sure they feel comfortable for Christmas.

 

[ob81]

If this had been a Samsung phone that got discounted and production was pulled back on, we would say that it was because the phone was not selling as well as expected. We wouldn't miss a beat.

The iPhone 5c is not selling as well as expected. The 5s is selling better than expected. 5s was ramped up. 5c scaled back.

End of story.

 

[musika]

I think it's time for Apple to cut it back on the front page of apple.com, too. I'd rather see the fancy 5s on the front page.

 

[KanosWRX]

No surprise here.. trying to resell a iPhone 5 like this just seemed like a pretty big disaster from the start. The iPhone 5 at least looked like a quality device.. this one looks like it should start at 0 dollars on contract, and sell for less then 500 off contract. Instead they sold it much higher when people would just say, well if I am paying that much, might as well just get the 5S. Or like most Apple people.. they just like the latest and greatest stuff so they could care less about this.

 

[KindredMAC]

Not really surprised. We saw already packaged final goods of the C 4-6 weeks before it was even announced. So now that the warehouses and channels have plenty, slow down until there is a balance again of supply and demand.

 

[billnye97]

What people didn't want an expensive phone that had last year's technology in it? Shocking.

 

[ValSalva]

What did Tim Cook say about trying to decipher sales from supply chain leaks? This report fits the narrative of poor iPhone 5c sales but in reality there's no way to tell from this.

 

[2457282]

They have not even finished rolling out to all countries, so this is interesting.

 

[Mums]

Stop making plastic iGarbage and bring back the pro products Apple!

I want a new 17" MacBook Pro.

 

[mikeyhd]

the print is in the wall for weeks 5S numbers is better than expected and 5C is lower than expected, just a re-alignment of production

 

[Rogifan]

I think MacRumors needs a special 5C blog where they can post rehashed stories about supposed 5C cuts.

 

[kappaknight]

Way too much scrutinizing here. There is supply out in the wild which makes for the need to over produce not there. No big deal. I really wouldn't judge about the 5c's success or failure till after the holidays though - that's when the mainstream shoppers will come in hordes to pickup the latest gadgets for their loved ones.

 

[Zellio]

People wanted gold, not an iphone 5 wrapped in plastic for $100 less.

 

[phillipduran]

Need to cut prices not production.

 

[Xenomorph]

Cool.

Cue a thousand more "analysts" and forum users making stupid predictions about their own false claim and ideas of a "cheaper" iPhone failing.

If I'm not mistaken, Apple *never* claimed to be working on or releasing a "cheaper" iPhone. The iPhone 5C is EXACTLY at the price expected for a 1 year-old iPhone.

And if I'm not mistaken, the iPhone 5C is selling better now than the iPhone 4S was selling when the iPhone 5 came out.

 

[dvoros]

cut back production

Sure, they put out enough 5c models which they did not need to do in order to have enough in stock to meet demand. However, on the models that REALLY are in demand, they did not have enough to go around even on the first launch day. In fact, most people have to wait until Nov. to possibly get their hands on a 5s. How insightful is that? Someone in marketing and supply should be fired over this debacle.

 

[Rogifan]

What did Tim Cook say about trying to decipher sales from supply chain leaks? This report fits the narrative of poor iPhone 5c sales but in reality there's no way to tell from this.

But another front page story about it is good for page hits I guess. Don't know why though. What does this story say that the others haven't? What can be said that hasn't already been said?

 

[martygras9]

I think it's time for Apple to cut it back on the front page of apple.com, too. I'd rather see the fancy 5s on the front page.

Everyone knows the 5s as it resembles the iPhone 5. Average consumers that are going to apple.com are more likely to purchase a phone based solely on surprise. "Wait, it comes in colors AND it's cheaper??"

We forget that we're a bunch of nerds who thrive on tech specs. Apple's pushing the 5c not to us, but to those who don't care.

I agree with you though, the colorful splash pages makes me recoil in horror every time.

 

[DougTheImpaler]

What people didn't want a phone that had last year's technology in it? Shocking.

The vast, vast majority of cellular shoppers don't know what kind of technology is in their phones.

The problem is that it LOOKS cheap. In person it looks awful. It looks Samsungy to me and feels Samsungy to me in the hand when I picked up a display model in the Verizon store. Why would anybody buy a cheap-looking phone from Apple for $100 on contract (or at certain stores, even $50 on contract) when even the 4S is a better looking and better feeling phone, let alone the 5S.

What Apple SHOULD have done was wrap the iPhone 4S in plastic with the 4" screen, like they did the iPod Touch, continued selling the iPhone 5, and then have the 5S at the top end. They got greedy, though, and thought they could pass plastic as premium. What a load of garbage.

 

[iSee]

Hm... personally I hope Apple decides the 5c underperformed because of the stale innards and not because of the colorful plastic casing.

I like the case and would probably have already updated from my 4S if I could get the 5s innards with the 5c casing.

It remains difficult to say, however, whether Apple's cuts are a result of lower than expected demand or perhaps simply part of a planned scaling back following an initial surge to ensure that distribution channels are adequately filled heading into the holiday season.

I suppose it might just be a case of making sure the supply chain is full. But with retailers widely discounting the 5c, it really feels like it is selling below projections.

Apple has sold millions already so it's not like it's a total flop. It's hard to believe they are perfectly happy with it though.

 

[CarpalMac]

Who is to say that this wasn't always planned production cut?

I know it is early days, and it seems unlikely, but perhaps they produced in big numbers so they could get a healthy stock built up. Maybe that worked out cheaper for them that way?

 

[Rogifan]

Hm... personally I hope Apple decides the 5c underperformed because of the stale innards and not because of the colorful plastic casing.

I like the case and would probably have already updated from my 4S if I could get the 5s innards with the 5c casing.



I suppose it might just be a case of making sure the supply chain is full. But with retailers widely discounting the 5c, it really feels like it is selling below projections.

Apple has sold millions already so it's not like it's a total flop. It's hard to believe they are perfectly happy with it though.

How are the innards stale? I'm using an iPhone 5 right now and it sure doesn't feel stale to me.

 

[Digital Skunk]

For what it's worth I actually like the 5c, but yes, at the price it's at one might as well go for broke and get the 5s. Even with last years technology and a plastic case Apple couldn't lower the price even by $200? At $300 off contract it'd be a great product.