Apple Cutting iPhone 5c Production at Two Major Suppliers

[tann]

I think they just overestimated the demand for them. I think even though they can advertise the new 5C a lot of customers tend to know or understand that the 5S is the actual new phone. So while the 5C appears to sell better than the 4S did after the 5 release people still really want the 5S.

Especially since the cost difference between a 5C and 5S isn't really that much in the grand scheme of things.

 

[ValSalva]

No it's cheaper for apple to manufacture the plastic 5C vs the iPhone 5/5S

Yes it is cheaper to produce. But does the non-techie average consumer know or even care?

 

[malnar]

Nobody's considered that Apple ramped up production of the 5c prior to launch in order to have a larger number of them available, especially in lieu of limited amounts of 5s models, and now that things with the 5s are clearing up, they don't need to be producing that many of them? Of course not.

I'm sure Apple's perfectly content with 5c sales. They knew going in that it wasn't going to be a massive seller, but it's cheaper to manufacture than the iPhone 5. Again, no one has considered that it's the plastic case, and the manufacturing processes, that allow Apple to sell the 5c at a lower cost? The 5s' aluminum shell demands a lot more time and money to create it, which isn't worthwhile to Apple for their second-tier device.

When we're talking sales of multi-millions (9 million the first weekend alone, who knows how many by now) the selling ratio of 5s to 5c being 2:1 is pretty spectacular - 6 million to 3 million. Every other phone manufacturer out there would be thrilled to sell 3 million devices in a single weekend.

 

[MacHiavelli]

Most of the people I've spoken to about the 5S and 5C regard the 5C as looking like a toy and being garish/tacky.

 

[Rogifan]

Vogue.com is advertising the 5C on their website. If the 5C is just fugly cheap plastic would Anna Wintour even allow it anywhere near Vogue?

http://www.vogue.com/vogue-daily/article/match-your-outfit-to-your-apple-iphone-5c/#1

 

[CausticPuppy]

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.

Don't forget that the iPhone 5C is still outselling the Samsung GS4:

http://techcrunch.com/2013/10/07/iphone-5s-5c-sales-vs-samsung-galaxy-s4/


Scaling back production is to be expected for a "long tail" strategy with the 5C. Ramp up for the initial release, then scale back to the "steady state" level. The 5C is the phone that Apple expects people to buy (at $99, an impulse buy) all throughout the year rather than camp out and buy at the release date.

"Analysts" will make up whatever narrative they want to fit these observations, of course.

 

[kemal]

There is an unapologetic plasticity to Apple ordering numbers.

 

[yossi]

Apple overestimated how many people in emerging markets would buy a $500 un-subsidized phone?

 

[ValSalva]

Apple overestimated how many people in emerging markets would buy a $500 un-subsidized phone?

The emerging markets Apple is targeting are the high end ones in places like China. Ultimately Apple doesn't care if iPhone 5s sales cannibalize 5c sales. Apple is not going to compete in the race to the bottom.

 

[Rogifan]

Apple overestimated how many people in emerging markets would buy a $500 un-subsidized phone?

When did Tim Cook say the 5C was made for emerging markets?

And Reuters just put up a story about Apple stock shrugging off 5C weak demand. Ha, so as hard as they (and others) are trying to push D&G, this time Wall Street doesn't give a damn.

 

[neuropsychguy]

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.

I disagree (difference of opinion is all). Yes, it does not have the premium feel of the 5s (of course, no other phone does, although the HTC One comes close & the Nexus 4 surprisingly feels premium too) but it is a far cry from the cheap plastic of Samsung phones (my wife uses a Samsung phone & I use a Nexus 4). The 5c feels solid and does not feel cheap at all. It is a huge step up in quality over most Android-based phones and fits within Apple's history of quality (they've long been using colored plastics in their computing devices).

 

[Syk]

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.

I think the average consumer will do down to the local cell store, Walmart, etc and purchase a phone before going to apple.com, that's where I'd expect the nerds to go.

Apple really seemed to push the 5C more than the 5S though

 

[Gudi]

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

Your misfeelings don't change anything. The performance gap to price gap relation between the 5c and 5s prohibits most sales of the c-model. As we say in Germany: "Better is the enemy of Good." My 2010 MBP doesn't feel stale to me either and I continue to use it. But that doesn't mean I would buy a new one today at only $100 cheaper. Computers lose their trading value long before they lose their value in use. Exactly at the date, when a much faster iPhone is released, most of the trading value of the old one is gone. That's how things always have been.

 

[ccuilla]

Here we go again: Those for whom the 5C was pre-ordained as a failure now have the evidence to fit their pre-determined conclusion.

 

[everything-i]

But how is this any different than if Apple had just kept the iPhone 5 and made it $99 on contract? I'd think that people who are buying on price don't care if it's last year's model. At least they haven't seemed to in the past. If 5c sales really are lower than expected could it be a consumer aversion to plastic?

They had to get rid of the 5 because it was a disaster to manufacture. They could not wait to drop it and produce an easier to build redesigned version. I think after Christmas the price will come down though as production costs reduce and the early adopters will have already got theirs full price

 

[croooow]

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.

Lots of people on MacRumors.com's forums have been saying just that about the iPhone 5c

 

[TallManNY]

They still don't have them on the shelf in my little Verizon store down the block here in New York City. And forget about the 5s, that they want a $100 "preorder" down payment and they will have it in a few weeks.

It seems a popular phone. And if Apple can keep selling 150,000 of them per day for the next quarter, that will be about 13 million. Which would basically make the phone comparable in sales to anything short of the current Galaxy flagship.

 

[croooow]

No it's cheaper for apple to manufacture the plastic 5C vs the iPhone 5/5S

Not by very much (Those gold iPhones are not made of actual gold. It's aluminum, which Apple has been working with for years and they have the process down)

The iPhone 5c (carryover from iPhone 5 with a few tweaks for plastic body, and a few updated components made for the 5s) was cheaper to develop compared to the iPhone 5 (a new design with new internal components) and the iPhone 5s (same design other than home button and camera/LED panel, plus new internal components) But manufacture costs are not too far off (cheaper components maybe?)

 

[duffmanth]

The idea of a cheaper iPhone is a good idea, but make it just that, CHEAP! Apple made a mistake pricing the 5C only $100 cheaper than the 5S. It needs to be free on a contract for the base model, and maybe $50 on contract for the higher end model. There also needs to be at least a $200 price difference on the unlocked price of the 5C and 5S.

 

[Syk]

Don't sugarcoat this. This is a pricing strategy failure. Tons of people here said the 5c was grossly overpriced. So did scores of analysts. Price is both too high, and too close to the 5s.

These production cuts confirm the critics correctly perceived how the market would react to the 5c's pricing.

I think it's priced at what the iPhone5 would have been priced at if it was kept inline.

The problem is the Apple is presenting this as a new phone but it's more of a small refresh to the iP5 but the big back lash is because all the rumors were that Apple was coming out with a new cheaper phone supposedly in the $300-400 range and that didn't happen nor did Apple do anything to shut down the rumor of a cheaper iPhone. They took the free press it was getting and it may not have gone as planned for them as far as the 5C is concerned, it probably caused some people to hold out on buying another brand phone in hopes of a cheaper iPhone though.

 

[Burger Thing]

I wished had broken their 's' Model design tradition this year and would have rather released a 4.3" and a 5.3" phone model. Obviously with a redesign of the outer shell with smaller bezels to keep the smaller model as the same size as the current 4" iPhone. And those of, us, who are lusting for a bigger screen iPhone, would have been happy, too.

Add some clever software tweaks to iOS to enable single hand input for the bigger model and, of course, market them both as meticulously crafted high end models. Sales Figures: *Booooooooom* - Through the roof.

 

[Thunderhawks]

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.

Your post shows that you clearly do not know how things work when it comes to forecasting and production procurement..

And, it would only be a debacle, if Apple would lose sales due to non availability.

They will get all the sales (and profits) as customers wait!

 

[ValSalva]

They had to get rid of the 5 because it was a disaster to manufacture. They could not wait to drop it and produce an easier to build redesigned version. I think after Christmas the price will come down though as production costs reduce and the early adopters will have already got theirs full price

Seems reasonable. Prices are discounted at some retailers already. I guess the Telcos could decrease the 5c price to $49 on contract. But I find it hard to believe Apple will decrease the price of the unlocked 5c. It would give the impression that they priced it too high at first. Not sure what will happen.

 

[everything-i]

I think the average consumer will do down to the local cell store, Walmart, etc and purchase a phone before going to apple.com, that's where I'd expect the nerds to go.

Apple really seemed to push the 5C more than the 5S though

Your right about the average consumer, they mostly pick up whatever the salesman at the local store pushes on them. Retailers push whatever earns them the most and that is not Apple phones, in fact it is surprising how well Apple continues to do despite this. Apple is pushing the 5C so hard because it was always going to be the harder model to sell, the 5S pretty much sells itself.

 

[Adelphos33]

1) It seems that the 5s is cannibalizing 5c sales rather than the other way around. But overall iPhone sales are up, which is the goal

2) 5c internals are actually too good - the phone outcompetes basically all in the market except for the 5s, so Apple can't really discount the off contract price too much

3) The phone was never meant to be a cheap emerging market phone.