Apple Reportedly Cutting iPhone 5c Production as Chinese Gray Market Prices Drop

[initialj]

From what I've heard in China...

Yes, parallel imports have always been a problem with mules hauling not just iPhones, but everything from baby powder to toilet paper, into China from HK and the US.

What I've heard in the case of the 5c, however, is the way that purchase contracts have been setup. Due to the lower than expected demand, vendors in China are forced to buy 5c's along with 5s's. For example - a vendor wants to buy eight 5s's, but he also has to buy two 5c's in accordance to the agreement. Because 5s demand is so high, all vendors want to carry them but they become locked in to all these 5c's. So to unload them, vendors sell at a lower price which still keep them profitable given the 5s margins.

I don't think Apple saw this coming. It highlights the fact that even though Apple says China is a very important market, Apple still has much to learn.

 

[FelixAng]

Google know that Nexus 4 will sell out. how can it not? Nexus 4 was sold about 1/2 the price as the LG G2 and they were slow to get additional Nexus 4. Google price the nexus line low to pull down Android devices price. Google get the state of art Android device from different manufacturers, cut the price and put it out on sales in the Google play store. What can other Android device makers do other than matching the price with their own state of the art device? At the end, Google get it's wish of populate the world with cheap Android device and each of them use the search engine from Google. Now Google can play with Motorola and Motorola can produce it's own state of the art Android device, let's see if Google will price Motorola's devices as low as previous Nexus devices (so far it is a resounding no)...

Motorola doesn't get special access to the Android team---it's treated just the same as Samsung, HTC, LG, and others, and it must compete with others to make a next-gen Nexus phone. Nexus is pure Android, unadulterated when purchased directly from Google.

Nexus is still the heart of Google's Android interests, and whether or not Motorola wins a bid, it's a matter of time.

 

[tongxinshe]

So when people compared/reviewed the iPhone 5 to other phones it was only the aluminum back that made it stand out?

No one said that it's the ONLY factor, but it is a factor cannot be ignored.

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Until postpaid plans are available that offer a lower rate for consumers bringing unsubsidized phones to a carrier, this point is (and always has been) moot. To the vast majority of users in the US, phones are $99-$299, and servcie plans are $90-100 for a single user and some discount for family users.

That's your own problem to not choose the right plan and right carrier.

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You actually don't pay back one penny of the subsidy in your monthly payment. Case in point, my parents are on my family plan and they were eligible for an upgrade. They have flip phones and are happy with them. I wasn't eligible for an upgrade, so used their upgrade to get me a new iPhone 5S. So, I got a fully subsidized iPhone for a line I pay $9.99/month for.

Either your parents don't look closely at their monthly service statement or they don't bother to tell you. When you change a flip phone to a smartphone, AT&T/Verizon automatically add a $30 monthly charge for the data service.

 

[jlnr]

Why is it curious that someone with a lot of money would prefer the better phone?

Because the prediction isn't "the 5c is cheap, it will sell like hotcakes" (it is not cheap), instead it is "the 5c is not my kind of design but EVERYONE ELSE will absolutely LOVE it!". And predicting what other people are going to like is always hard. Kind of like the bizarre "I'm white but Asians will love iOS 7" article a while ago.

People who state what they want to use themselves always seem more credible to me. And I have yet to see more than three MacRumors posters who say that about the 5c. (Just an observation, I'd actually prefer a plastic phone myself, generally speaking.)

 

[BvizioN]

Sorry, "Space ****** Grey", better Mr Pedantic? I don't really fancy a pastel phone as a 36 year old man, just not my thing. I don't have "Hello Kitty" pyjamas either.

Just out of curiosity, do you guys wear always "all black" as well? And your walls painted black, and black cars too? I am man too and personally don't mind colors, I live in a world that happen to be colored!

 

[Jimrod]

A man more than 20 years your senior is buying a yellow 5c, so you might consider keeping your prejudices to yourself next time.

Though it would actually be better if you got over them.

People get so offended so easily nowadays, I'm not criticizing anyone, I'm not doubting many men have bought pastel coloured iPhones. What I AM saying is that Apple would broaden the appeal of the 5C greatly if they offered it in a colour/shade that was more masculine as all of the choices currently (aside from white) are inherently feminine. I'm not being prejudiced about anything - it's just a fact of design and natural/learned preferences of the sexes.

Yes, many girls would also like a black phone, many guys want a pink one, I am talking in general and if people can't figure that out then I think that's more on them than me.

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Just out of curiosity, do you guys wear always "all black" as well? And your walls painted black, and black cars too? I am man too and personally don't mind colors, I live in a world that happen to be colored!

See my post above.

I also like colour but it doesn't get around the fact that Apple's colour selection for the 5C is pretty poor as pastels generally appeal to a smaller set of people than bold colours - a bold red would be good rather than just pink for example. Since you mention cars - how many pastel cars do you see compared to black/silver/red? Not many when I look out my window as I type this.

 

[elgrecomac]

Hey Jony lover...

And take a look around your home, car and office and if you pay attention you will see some form of plastic in so many items (cheap and expensive!) and even more if you look under the hood or behind you walls and floors!
Image
People need to stop being snobs regarding the plastic phone back.

My point is not the plastic issue but rather Apple's marketing hype machine is trying to brand it as something it is not: new. It is an iP5 encased in plastic, which I can do with ANY iphone on the market but just going and buying an
'unapologetically' plastic case for it.

Marketing is marketing. It is not a new or improved product. Nor 'cool'.
Now my wife's $5 Louis Vuitton case (from China, of course) for her iphone 5 IS cool, and unapologetically so.

 

[coolspot18]

Is "gray market" just really a euphemistic term for "black market"??

AKA Apple "UN"authorized Retailers!

No, because Black Market implies it is illegal.

Grey market products are not illegal. In fact, your local Costco carries them from time to time... and many camera stores in the US carry grey market products (i.e. B&H Photo).

 

[cube]

When they make the black parts of an iPhone black, do they do it by removing color? (This whole color thing started with people suggesting black and grey iPhones and others saying those are not colors)

When you look at a black object (a black iPhone, a black car, etc) you are still seeing something, it is not the absence of light. Why do some cars available in more than one black?

I noticed no one address grey and white in my original post

Everyone thinks Apple is getting the black components of the iPhone from the center of a black hole?

Yes, you make a black object by adding pigments which subtract colour.

Except a black hole or the 2001 monolith, there are no black objects, "black colour" is really very dark gray.

Perfect neutral gray and white have all colours in equal proportion.


Pedantic shield: disregarding the "black hole not truly black" stuff

 

[iphone5att64]

Apple hasn't even announced its quarterly results and people are already declaring it a failure based on rumors from the Far East. Because those rumors are always so accurate.

Btw, what ever happened with that front page WSJ report at the beginning of the year that Apple was cutting iPhone 5 production by some ridiculous percent. This stuff gets reported all the time yet never gets fact checked because its impossible to do so.

That could be true. They would cut iPhone 5 production to make iPhone 5c!

 

[xofruitcake]

Motorola doesn't get special access to the Android team---it's treated just the same as Samsung, HTC, LG, and others, and it must compete with others to make a next-gen Nexus phone. Nexus is pure Android, unadulterated when purchased directly from Google.

Nexus is still the heart of Google's Android interests, and whether or not Motorola wins a bid, it's a matter of time.

I don't know "winning" the chance to produce a Nexus device is a good thing or a bad thing for an Android vendors. Take the example of the Nexus 4. The low price that Google charged for Nexus 4 definitely impacted the sales number of the LG version of the same phones. LG make money on the limited number of Nexus 4 phones that they sold to Google but they will loss far more money on the missing sales because customers all want the lower priced Nexus version. When Google undercut the sales price of Nexus vendor on the same device, the vendor get a big problem. Why else would most Android vendor looked into producing Window 8 devices last year as a way to diversify away from Android? Now that Window 8 is more or less dead (except Nokia will march on), all the Android vendors are stuck. And since most of them are losing money except Samsung. There won't be many Android vendors left (and Google low cost Nexus strategy is at least part of the problem) soon. Now that Google own Motorola, Google will feel the pain like all other Android vendors..

 

[sinfonye]

Im a guy and like the colors. What I don't like is the a6, same camera as 5, and no FP scanner all for a measly $100 savings.

If I'm paying hundreds for a phone, then I can afford another $100.

Sounds like Apple has got it exactly right They're getting you to splash out $100 more.

I'm waiting for the iphone 6 - similar logic

 

[dol4n]

Steve would never have allowed this!

He never made a mistake regarding a new product, and even when he did he could stand up for it and admit the failure.

Cook doesn't have a clue what he is doing with Apple Inc.

 

[sinfonye]

There won't be many Android vendors left (and Google low cost Nexus strategy is at least part of the problem) soon. Now that Google own Motorola, Google will feel the pain like all other Android vendors..

Google makes money in other ways. It can easily afford to lose money on hardware if it chooses (likewise Amazon).

 

[KeanosMagicHat]

The official price of iPhone 5c in China is 4448 Yuan ($726) . . .

. . . the current price of unofficial iPhone 5c in China? 3000 to 3300 Yuan ($489-539), according to checks done multiple by local tech sites, and a quick review of offers on China's main online marketplace - Taobao. That's a drop of 30% below the official price. And, according to some sources, you can now sometimes find iPhone 5c as cheaply as 2600 Yuan . . .

That much of a drop below official pricing already!!!

Very concerning.

I keep saying they somewhat messed up here. It'll still sell fairly well of course, but not to the people they thought they'd target and that applies not just in China, but globally.

The 4S still performs on iOS 7. They should've put 4S internals (except the screen) in a 5C chassis and charged a lot less.

Yes if they then priced it right for the customer their profits would've taken a slight hit per unit, but they are exorbitant anyway. If they were serious about aggressively attacking the lower end of the market it was the obvious play to me.

Basic error.

 

[croooow]

Steve would never have allowed this!

He never made a mistake regarding a new product, and even when he did he could stand up for it and admit the failure.

Cook doesn't have a clue what he is doing with Apple Inc.

He never made a mistake but could stand up for it when he did?

 

[cambox]

Still yet to see one in the wild! What does that say! It doesn't sell!!!

 

[dol4n]

He never made a mistake but could stand up for it when he did?

Yes.

 

[nzcatfood]

The 5C is clearly USD$50-$100 too expensive, if only relative to the 5S. I really wanted a lime green 5C to go with my *beloved* iPad 4 but I decided to get a Nokia 920 second hand to see what the big screen craze was all about, despite the obvious learning curve. That switch was solely based on price. I can't justify a 5S when I can get a 2012 MacBook Air 11 for the same price. Yeah, I know my logic is rubbish, but the 5C is still too expensive. I *really* want a MacBook Air. Haha

 

[Rogifan]

Steve would never have allowed this!

He never made a mistake regarding a new product, and even when he did he could stand up for it and admit the failure.

Cook doesn't have a clue what he is doing with Apple Inc.

Like he did with the iPhone 4's antenna?

 

[macchiato2009]

haha 2 weeks ago Apple was bragging about the success of its iPhone 5C

now reducing production


EPIC FAIL

 

[iSayuSay]

Yes.

LoL .. Some people still think Steve is the perfect guy when he was Apple CEO?

iPhone 4 antennagate
Power Cube
Slow as molasses and super expensive 1st gen MBA
iPad 1st gen ugly design

All happened under Steve's supervision. Yes he was inspiring figure but he's nowhere near perfect. Grow up would you?

Tim is fine and he is handling larger sales and logistic problems more than Steve ever has to.

So yeah ..."Steve would have never allowed this" kind of post needs to be banned. He's great but just as guilty as the next guy.

Oh and one more thing. Steve Jobs does not apologize even if he need to. If you're a fan you should know this already?

 

[croooow]

Yes.

You should look up the word "Never"

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haha 2 weeks ago Apple was bragging about the success of its iPhone 5C

now reducing production


EPIC FAIL

It would be an "epic fail" if it were a new phone. As mentioned in this post, you really need to think of the iPhone 5c as if they just sold the iPhone 5 for $100 less (like they did with the 4S last year, etc)

 

[Sedrick]

The troll responses in this thread are going to reach ridiculous levels.

I'll field this one.

1) I enjoy the colored back of the phone. It brings a splash of color to a line of products that has been dull for so long.

2) The rounded polycarbonate back of the phone is more pleasant to look at and hold as compared to the cold, industrial looking and feeling 5s.

3) I saved $100 by going with the 5c. That money allowed me to purchase Applecare+ for my phone.

4) I'm not the shallow sort of individual that cares what other people think about the phone I use. I mean, really? Grow up, people. If you think my phone is "cheap-looking" I don't really care. Whatever makes you feel superior, man.

Agree 100% on all points. That's exactly why I got a yellow 5C. I hate the hard-edged bendable,scratch-tastic 5/5S series. It's not about the money.

 

[Gatesbasher]

I can't believe idiots are still talking about "Antennagate". The original stupid decision was to bury the antenna inside the phone, but you can't blame Apple for that. The only difference was that Steve Jobs had to tell everybody "Don't hold it like that", when every other cell phone had a manual telling you not to hold it like that!