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

[cube]

Please show me ANYONE saying the iPhone 5c is the best phone at any time.

And newsflash: The iPhone 5c is an iPhone 5!

You say the iPhone 5 is "one year old and still equally good" (compared to 5s?) and you say the iPhone 5c "starts as an old phone on the day of its introduction" which means you acknowledge that the iPhone 5c is an iPhone 5, you can the iPhone 5 equally as good as an iPhone 5s (which is not true) but then say the iPhone 5c is not?

----------

What about all those other people who also call it gold? You probably do not care what they call it either.

By the way. "Gold" in this case is the color, not the element. Apple NEVER claimed it was made of gold. It is still aluminum just like the "Silver" (also not the element, just the color silver) and "Space Grey" (which Apple does not claim comes from some element found in space)

You may not call it gold, but that is what it is. Just get over it.

I don't care what they call it either. It is not gold coloured.

That it is being called gold is actually a turnoff.

And the new OSX is called Sea Lion.

 

[FelixAng]

Wow. That's a lot of unfounded assumptions and misstated

Numbers speak louder than plastic...when supply is high and demand is low, action must be taken, whether it be lowering prices and/or curtailing production...

Here they are:

*The shows the amount Apple saves using plastic shell:
http://m.us.wsj.com/articles/BL-DGB-29655

*From Sept. 13---ahead of launch:
http://m.us.wsj.com/articles/a/SB10001424127887323846504579073481512155074?mg=reno64-wsj

Sept. 22---Forbes:
http://www.forbes.com/sites/chuckjones/2013/09/22/iphone-5c-lead-times-at-24-hours-plenty-of-supply-or-weak-demand/

October 11
*APPLE CUTS PRODUCTION IN HALF, despite preparations to release of the 5C and 5S in 51 territories in the coming weeks:
-http://www.telegraph.co.uk/technology/apple/10372942/Apple-halves-production-of-iPhone-5c.html

-http://arstechnica.com/apple/2013/10/iphone-5c-and-5s-come-to-the-rest-of-the-world-on-october-25-november-1/


*Every color 5C ships within 24hrs in HK:
http://store.apple.com/hk-zh/buy-iphone/iphone5c

*The Verge reports retailer discounts on 5C, October 4:
http://mobile.theverge.com/2013/10/4/4803480/iphone-5c-sale-price-45-at-walmart


Now, please understand: The 5C is just not that hot.

 

[kdarling]

I never claimed he was a god nor that he was perfect. but he was a extra ordinary human begin,an inventor. he built the company, he saved it from bankruptcy, he came with the idea of iMac,iPod,iPhone,iPad from scratch..

Well, not quite from scratch

• The iMac, an all-in-one computer, was not a new idea.
  
• The iPod was Tony Fadell's idea and baby, although he didn't invent MP3 players.
  
• The iPhone might've had a clickwheel interface if someone at Apple hadn't shown Jobs a nicer touch UI. (Jon Ive says he was the one who did that.)
  
• Even the idea of a touch-friendly easy-to-use tablet, had been around for a very long time. (E.g. the Norwegian 2000 FreePad, which was just too early to catch on.)

Jobs was more like a facilitator / chooser / editor of other's inventions, with a really good feel for when to start selling a product. He was also really good at promoting them. Which are all obviously excellent talents if you want to make money.

 

[BaldiMac]

Numbers speak louder than plastic...when supply is high and demand is low, action must be taken, whether it be lowering prices and/or curtailing production...

Here they are:

*The shows the amount Apple saves using plastic shell:
http://m.us.wsj.com/articles/BL-DGB-29655

*From Sept. 13---ahead of launch:
http://m.us.wsj.com/articles/a/SB10001424127887323846504579073481512155074?mg=reno64-wsj

Sept. 22---Forbes:
http://www.forbes.com/sites/chuckjo...-at-24-hours-plenty-of-supply-or-weak-demand/

October 11
*APPLE CUTS PRODUCTION IN HALF, despite preparations to release of the 5C and 5S in 51 territories in the coming weeks:
-http://www.telegraph.co.uk/technology/apple/10372942/Apple-halves-production-of-iPhone-5c.html

-http://arstechnica.com/apple/2013/10/iphone-5c-and-5s-come-to-the-rest-of-the-world-on-october-25-november-1/


*Every color 5C ships within 24hrs in HK:
http://store.apple.com/hk-zh/buy-iphone/iphone5c

*The Verge reports retailer discounts on 5C, October 4:
http://mobile.theverge.com/2013/10/4/4803480/iphone-5c-sale-price-45-at-walmart


Now, please understand: The 5C is just not that hot.

You just said all the same things again while ignoring all of the counter-arguments.

 

[FelixAng]

You just said all the same things again while ignoring all of the counter-arguments.

Okay, then the WSJ, Guardian, Forbes, The Verge, and Ars Technica don't know anything about Apple and the 5C.. I'm following the economics, clearly laid out in my links. Learn about the rules of supply and demand in basic economics...there's no argument in logic here, I'm just following the numbers. From what I can tell, the 5C optimists are entranced by a cheaper version of last year's phone. Let it be, and we'll see if Apple ever releases the numbers, and we'll check in. If I'm wrong, I'll be the first to say, but look, these actions don't make sense...cutting production in half despite opening in 51 new territories; after a few weeks of sales, it's hard to imagine the 5C has been a success as a "new" device, and it's grossly overpriced (as evidenced by the first WSJ link I listed)

 

[Rogifan]

Well, not quite from scratch

• The iMac, an all-in-one computer, was not a new idea.
  
• The iPod was Tony Fadell's idea and baby, although he didn't invent MP3 players.
  
• The iPhone might've had a clickwheel interface if someone at Apple hadn't shown Jobs a nicer touch UI. (Jon Ive says he was the one who did that.)
  
• Even the idea of a touch-friendly easy-to-use tablet, had been around for a very long time. (E.g. the Norwegian 2000 FreePad, which was just too early to catch on.)

Jobs was more like a facilitator / chooser / editor of other's inventions, with a really good feel for when to start selling a product. He was also really good at promoting them. Which are all obviously excellent talents if you want to make money.

Jobs didn't have a problem taking credit for other people's ideas. The book below is coming out in November. I'll be curious to see how it jives with Walter Isaacson's book. Apparently Kahney got former and current Apple employees on record (though not Ive himself).

 

[kdarling]

Jobs didn't have a problem taking credit for other people's ideas. The book below is coming out in November. I'll be curious to see how it jives with Walter Isaacson's book. Apparently Kahney got former and current Apple employees on record (though not Ive himself).

Thanks for the heads up!

Yeah, I think that all sorts of stories will eventually come out.

 

[BaldiMac]

Okay, then the WSJ, Guardian, Forbes, The Verge, and Ars Technica don't know anything about Apple and the 5C.. I'm following the economics, clearly laid out in my links. Learn about the rules of supply and demand in basic economics...there's no argument in logic here, I'm just following the numbers. From what I can tell, the 5C optimists are entranced by a cheaper version of last year's phone. Let it be, and we'll see if Apple ever releases the numbers, and we'll check in. If I'm wrong, I'll be the first to say, but look, these actions don't make sense...cutting production in half despite opening in 51 new territories; after a few weeks of sales, it's hard to imagine the 5C has been a success as a "new" device, and it's grossly overpriced (as evidenced by the first WSJ link I listed)

Again...

1. Having enough supply does not indicate a lack of demand.
2. Rumors of production being cut in half are not evidence without knowing why production was cut. You are assuming they are cut due to a lack of demand in order to prove a lack of demand. That's circular logic.
3. Retail price cuts are an indication of competition between retailers, not a lack of demand.
4. How much a device costs to make has nothing to do with whether it is overpriced, if you're "following economics".
5. You have yet to provide any objective standard of success or failure. How is 14 million phones a quarter (at the rumored new rate) a failure? It's likely the 2nd most popular phone in the world. And will likely remain so for most of the year.

 

[FelixAng]

For all those who hate the 5C colors I present you this:

Image

What's the connection between those who find the 5C disappointing and the Galaxy mini? ...is this what the 5C has come to...comparisons with mid-range Samsung phones?

 

[FelixAng]

Again...

1. Having enough supply does not indicate a lack of demand.

***You're making an assumption that they have enough supply."

2. Rumors of production being cut in half are not evidence without knowing why production was cut. You are assuming they are cut due to a lack of demand in order to prove a lack of demand. That's circular logic.

***That's basic business strategy. For all we know, focus has moved to other upcoming devices.

3. Retail price cuts are an indication of competition between retailers, not a lack of demand.

***Retailers in the US rarely put Apple prices on sale, especially not "new" devices. I don't remember sellers in the US or Asia racing to the bottom trying to get the 4S out. From basic economics stand point, some company in this chain had a low demand and high supply and decided to take action---whether one company or many.

4. How much a device costs to make has nothing to do with whether it is overpriced, if you're "following economics".

***Yes, you are right. But, again, you didn't read my point, which was that the buying public (outside of US contract services) was disappointed with the unlocked price, considering what they're getting. The physical build of the 5 is no doubt more intricate and refined than the 5C (and considerably more expensive to make), yet Apple chose to price the 5C as it would have (shaving off $100) priced the 5 as a "previous generation" hold over. It's a win-win for Apple, but consumers who buy the phone outright just aren't impressed at that price (which is actually more like $700 USD in Mainland China).

5. You have yet to provide any objective standard of success or failure. How is 14 million phones a quarter (at the rumored new rate) a failure? It's likely the 2nd most popular phone in the world. And will likely remain so for most of the year.

*** There you go, resorting to "rumors," despite my inclusion of documented reports. In case you didn't read any of those links, here's a quote from Chuck Jones at Forbes:

--Apple has had to manage five colors, two memory sizes, multiple cellular networks, numerous countries and distribution partners and except for the yellow 5c having some slightly longer lead times (which have largely been resolved) you would normally expect that the company would not have been able to estimate how many of each configuration would be needed before consumers had an opportunity to check them out.

There is the possibility that Apple planned to build a large number of each configuration but given the company’s historically tight supply chain I doubt they were able to match production to demand so closely. This leads me to believe that the demand for the 5c is below expectations, otherwise we would be seeing longer lead times. --

HIS HIGHLY DETAILED SPREADSHEET SAYS IT ALL:
https://docs.google.com/spreadsheet...m9RWGxVOUoyZ3Q1U2c&f=true&noheader=true&gid=0

 

[BaldiMac]

***You're making an assumption that they have enough supply."

What in the world are you talking about? You provided links that show Apple currently has enough supply of the iPhone 5C yourself.

***That's basic business strategy. For all we know, focus has moved to other upcoming devices.

What are you talking about?

***Retailers in the US rarely put Apple prices on sale, especially not "new" devices. I don't remember sellers in the US or Asia racing to the bottom trying to get the 4S out. From basic economics stand point, some company in this chain had a low demand and high supply and decided to take action---whether one company or many.

As I have pointed out multiple times, that simply is not true. For example, Walmart discounted both the iPhone 5S and the 5C before they were even released. Retailers provide discounts to encourage you to buy products from them instead of their competitors. They aren't trying to bump up Apple's shipment numbers by making less money.

***Yes, you are right. But, again, you didn't read my point, which was that the buying public (outside of US contract services) was disappointed with the unlocked price, considering what they're getting. The physical build of the 5 is no doubt more intricate and refined than the 5C (and considerably more expensive to make), yet Apple chose to price the 5C as it would have (shaving off $100) priced the 5 as a "previous generation" hold over. It's a win-win for Apple, but consumers who buy the phone outright just aren't impressed at that price (which is actually more like $700 USD in Mainland China).

I read your point. It is simply the same unsubstantiated opinion that you've made over and over.

*** There you go, resorting to "rumors," despite my inclusion of documented reports.

The same rumors that you've used to draw the opposite conclusion.

In case you didn't read any of those links, here's a quote from Chuck Jones at Forbes:

--Apple has had to manage five colors, two memory sizes, multiple cellular networks, numerous countries and distribution partners and except for the yellow 5c having some slightly longer lead times (which have largely been resolved) you would normally expect that the company would not have been able to estimate how many of each configuration would be needed before consumers had an opportunity to check them out.

There is the possibility that Apple planned to build a large number of each configuration but given the company’s historically tight supply chain I doubt they were able to match production to demand so closely. This leads me to believe that the demand for the 5c is below expectations, otherwise we would be seeing longer lead times. --

HIS HIGHLY DETAILED SPREADSHEET SAYS IT ALL:
https://docs.google.com/spreadsheet...m9RWGxVOUoyZ3Q1U2c&f=true&noheader=true&gid=0

Hey! Look! Chuck's "HIGHLY DETAILED SPREADSHEET" says the same thing as all your other sources! Apple has produced enough iPhone 5Cs to meet demand.

 

[xofruitcake]

Okay, then the WSJ, Guardian, Forbes, The Verge, and Ars Technica don't know anything about Apple and the 5C.. I'm following the economics, clearly laid out in my links. Learn about the rules of supply and demand in basic economics...there's no argument in logic here, I'm just following the numbers. From what I can tell, the 5C optimists are entranced by a cheaper version of last year's phone. Let it be, and we'll see if Apple ever releases the numbers, and we'll check in. If I'm wrong, I'll be the first to say, but look, these actions don't make sense...cutting production in half despite opening in 51 new territories; after a few weeks of sales, it's hard to imagine the 5C has been a success as a "new" device, and it's grossly overpriced (as evidenced by the first WSJ link I listed)

heh heh, you seems to forget that with any product launch, you have to fill up the inventory channel. Once you fill the channel, the company will to reduce production to match the sell through level. The production level will keep changing to match the demand pattern. Apple keep their inventory channel between 4 to 6 weeks of sales (go back to the previous few quarter of conference call transcript). So in a month of so, Apple will start to rev up the production for last minute Christmas shopping. Launching in the new territory is the reason that production should be cut back now. By now, majority of the device for those new territories should be on their way. Why would Apple need to keep the production up?

All the data show so far is that 5c is more popular in some country (like US) and not the other. 5c availability means that supply > demand. But what if the supply is 30M unit worldwide instead of 5M? Does it change your conclusion? Apple sell between 32 to 47M iphone each quarter in the last 4 quarter. If 5c can sell between 12 to 15M units average a quarter, it would have beaten 4s last year and did well for Apple. The untold story now is whether 4s sells well. On 10/28, Apple will release their fiscal 4q13 (Sept q) financial result and put out guidance for fiscal 1Q14 (dec quarter). We will know from their guidance of whether the 5s/5c/4s strategy work out or not.. Everything else we know now is just partial view of Apple world. Remember all the analyst get the pricing of 5c wrong, what make us think that they get the new 5c production number right??

 

[dru`]

I finally made my pilgrimage to an  store to see all the new iphones. I liked the champaign 5s. It's very subtle, not at all garish. The white 5c is very good. I wish there was a (RED) 5c because the (RED) iPod Touch is sexy. The 5c colors are sickly sweet.

Overall I was unhappy with the phones because they kept wanting to do things I didn't want to do or misread inputs because I have large fingers. The iPad experience, particularly on the Retina is fantastic.

 

[FelixAng]

As I have pointed out multiple times, that simply is not true. For example, Walmart discounted both the iPhone 5S and the 5C before they were even released. Retailers provide discounts to encourage you to buy products from them instead of their competitors. They aren't trying to bump up Apple's shipment numbers by making less

Besides a disappointing sales record thus far on the 5C, why do you think these big box retailers are only competing in terms of the 5C and not the 5S? And, the 5C competitive pricing (in terms of service contracts) did begin, yes, before the it was released, but it has continued to be sold with discounts, price cuts, and incentives. The 5S has not enjoyed such "competitive" pricing. In fact (yes, fact), the 5S continues to sell on the street for significantly more than its retail value. So, demand for the 5S must be high if buyers are willing to pay more, in which case demand for the 5C must be low since retailers are undercutting themselves to incentivize 5C sales--this is my belief. Your case would make sense, that retailers are simply competing for business and that such pricing does not reflect low 5C demand---this is how I read your understanding of these trends. Fine. Historically, new Apple products rarely feature such discounts as Apple, the "premium" brand of computing, has seldom necessitated such significant discounts (premium brands in most markets don't apply discounts: Coach, Louis Vuitton, Ferrari--when purchased direct, Rolex...etc)

So, if demand for the 5C is so high, and demand for the 5S similar, why is the 5C enjoying all the discounts?

 

[BaldiMac]

Besides a disappointing sales record thus far on the 5C,

Which you have yet to to show any evidence of.

why do you think these big box retailers are only competing in terms of the 5C and not the 5S?

Because the 5S is in short supply.

Historically, new Apple products rarely feature such discounts as Apple, the "premium" brand of computing, has seldom necessitated such significant discounts (premium brands in most markets don't apply discounts: Coach, Louis Vuitton, Ferrari--when purchased direct, Rolex...etc)

Again, that's simply not true.
https://www.macrumors.com/2012/12/09/best-buy-offering-50-off-of-all-iphone-5-models/

So, if demand for the 5C is so high, and demand for the 5S similar, why is the 5C enjoying all the discounts?

I never said that demand for the 5C is similar to the 5S.

To me, the 5C is successful if it increases sales from last year's 4S while increasing profit margins and not eating too much into sales of the 5S.

 

[SlCKB0Y]

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

AKA Apple "UN"authorized Retailers!

uhhh.. no.

 

[sclawis300]

No I did not.

It was Apple's iOS auto-correct function kicking in and changing my inputs wrongly.

is that Tim Cook's fault too?

 

[charlituna]

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

AKA Apple "UN"authorized Retailers!

More or less.

And if you look at the article it really isn't as horrible as it sounds. They claim the issue is this grey market. So it would seem that they jacked up production so that even if the resellers got a ton of phones there would be enough for normal sales. But apparently folks are just waiting and getting them at Apple so the resellers aren't getting business like normal. No big profits, so they aren't chasing product thus not as much is needed.

Not that they aren't necessarily not selling. Same thing happened when they launched the iPad in China at the same time as the US. Folks could buy legit right off so they didn't go grey.

 

[oliversl]

I'm sure you can get the 5C for 800 in ebay too, but just go here and order one:
http://store.apple.com/us/buy-iphone/iphone5c

Its 549 US$

You don't get it. It's not $550 in the US, on average it's about $600. In California, where Apple is, it's more than $600 cross board.

On the other hand, it's not really $750 in China, it's $730+. Among that $130 difference, half comes from the import duty (though ironically they are mostly assembled in China, they are still considered imported products since Apple is a US company), the other half comes from the safety extra Apple adds on top to guard itself against the exchange rate fluctuation, the extra cost caused by local law related warranty requirements, etc. Apple does that in Australia and Europe as well.

 

[tbrinkma]

I really regret even mentioning guns. I am in favor of people's rights to bear arms but I should have known better to even mention it because of how easily people feel threatened by any discussion of it.

It was just the first item I could think of that has a black market but does not necessarily have to be stolen.

That's fair. I was just doing what I could to prevent the spread of misinformation. (Intentionally or otherwise.)

Pretty much anything with regulations which prevent certain people from buying it legally has a black market, including prescription medications, and alcohol.

 

[tongxinshe]

I'm sure you can get the 5C for 800 in ebay too, but just go here and order one:
http://store.apple.com/us/buy-iphone/iphone5c

Its 549 US$

Alas, you really don't do math, do you? The hint in my words was SO obvious and you still don't get it, or maybe you are totally in the mood of simply arguing and quit read&thinking. Anyway, just go actually buy it from the link you quote, put in your address, and see how much you are going to pay in the end.

 

[oliversl]

I just do in google: 730 - 550 and it says 180, anyway, really close to 200 US$ as I said. I already bought from Apple store online and they do not have hidden fees. There could be states that have more taxes, but I can only speak for my case.

Maybe when you bought your iPhone for 550 US$ in Apple Store Online, it arrived at your home with some taxes on it or you pay more for shipping.

The main point is that in Apple US the price is cheaper than in China, official price in online store. I don't talk about retail stores.

Alas, you really don't do math, do you? The hint in my words was SO obvious and you still don't get it, or maybe you are totally in the mood of simply arguing and quit read&thinking. Anyway, just go actually buy it from the link you quote, put in your address, and see how much you are going to pay in the end.