We’ve heard several rumors that Apple is cutting iPhone 5c production. Wall Street Journal also confirms that it has heard the same thing from its sources.
WSJ reports that Apple informed two assemblers that it is reducing orders for the colorful iPhone for the fourth quarter earlier this month.
WSJ reports:
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.
This doesn’t come as a surprise, there have been enough clues to suggest that there has been weaker than expected demand for the iPhone 5c.
A number of Apple’s retail partners in the U.S such as Best Buy, Walmart, Radio Shack, Target etc have cut the price of iPhone 5c to $50 with a two-year contract. WSJ reports that China Telecom has slashed the price for the 16GB iPhone 5C by 700 yuan ($115) to 3,788 yuan.
The availability of iPhone 5c is also very good at Apple retail stores, and Apple says it can ship the device in 24 hours on its Online Store.
Meanwhile, the report also briefly mentions that Apple has raised iPhone 5s orders for the fourth quarter, which also doesn’t come as a surprise. Apple is reportedly selling twice as many iPhone 5s compared to the iPhone 5c, and Apple says it can ship the device in two to three weeks if you order one now.
When I heard Apple was going to launch a plastic iPhone, I assumed that it would be a cheaper iPhone to grab market share, but iPhone 5c at $549 (for an unlocked device) is anything but cheap. Apple clearly wasn’t going after market share as many of us had assumed, it introduced the colorful iPhone 5c instead of offering last year’s iPhone 5 to create a two-sibling iPhone family, and to be able to market both the devices. It couldn’t have promoted the one-year iPhone 5 (and the same reason it is not promoting iPhone 4s). The iPhone 5c also improves its profit margin, as it is cheaper to make a plastic iPhone rather than the aluminum iPhone 5. However, it looks like that plan is not working as well as Apple had hoped.
It remains to be seen if Apple will do the unthinkable and slash the price of the iPhone 5c to boost demand. I wouldn’t count on it.
[via WSJ]
No comments:
Post a Comment