DisplaySearch analyst Tina Teng reports that according to their sources, Apple is cutting iPhone 5c orders by 35%, echoing similar reports by Wall Street Journal and other news publications.
The report also claims that Apple has increased production of iPhone 5s orders by 75%.
Teng reports:
While the fate of the iPhone 5c is still to be determined, the iPhone 5s is doing quite well, indicating that Apple still has a strong hardcore base for its premium devices. It is worth mentioning that iPhone 5 production is scheduled to end Q3 2013; iPhone 4s’s end of life is still to be determined, as it still receives orders of 1 to 2 million units per month and only recently started selling in Indonesia.
The increase in production of iPhone 5s is indeed good news for Apple as it suggests that there is strong demand for its flagship device.
However, the slashing of iPhone 5c orders has raised questions about Apple’s dual iPhone strategy. The report notes that Apple could have saved the trouble of developing the colorful iPhone, and offered the year-old iPhone 5 instead.
I think people are unnecessarily jumping to conclusions. Apple executives have cautioned against reading too much into supply chain adjustments, which are common in the fast-moving electronics industry.
One of the reasons Apple launched the iPhone 5c, which essentially comes with iPhone 5 internals, is to be able to promote the device, as it is still seen as a “new device.” It wouldn’t have been possible to promote a year old iPhone (which is why it does not actively promote the two-year old iPhone 4s).
Apple may have overestimated the demand for the iPhone 5c, but doesn’t mean it isn’t selling well. If Apple manages to sell more iPhone 5c units in this quarter compared to the iPhone 4s (which was the year-old iPhone last year) in the same quarter last year, then the change in strategy would have paid off.
[DisplaySearch via AllThingsD]
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