WSJ: Apple cutting iPhone 5c orders by up to 30%

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Last week, we read reports that Apple was planning to cut its production orders for the iPhone 5c. Those rumors have seemingly been confirmed by WSJ in a report published today. Having spoken to its own sources:

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.

With any report like this, it’s very easy to read too much in to it. While many might state that the iPhone 5c is a failure, that’s simply not the case. Over the first weekend of sales, it barely went out of stock anywhere and – by looking at sales trackers – you can see the ratio of iPhone 5c vs. iPhone 5s sales are around 1:3. Which is completely understandable given that the iPhone 5s is the clear flagship device packed with all of Apple’s latest technology.

There is a possibility that Apple overestimated how popular it would be. But there’s also the possibility that they wanted to make sure there was more than enough supply to meet demand. It would be pretty horrendous if both phones sold out as quickly as the iPhone 5s did. It’s also worth remembering, Cupertino regularly changes its orders to react to demand for any device. You only have to look back at last year’s “iPhone 5 orders cut in half – APPLE IS DOOMED” articles to realize much of it is an overreaction.

Over the course of the launch weekend, Apple sold 9 million iPhones in three days. Between 25-30 percent of those were iPhone 5c’s. It’s expected that as time goes on, the difference in sales figures between the two new models will even out. Whether it will or not is something we’ll have to wait on.

Via: WSJ

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  • DrewPage

    I think people are getting all excited for nothing.  Apple’s likely plan for the 5c was that it would fuel more 5S sales (which has a higher margin).  So, if they are increasing 5S orders and cutting 5c orders, it would seem to me that their plan is working perfectly.

  • TiP_Cam

    @DrewPage It’s possible. Also, I think the iPhone 5s would be a much harder sell if the iPhone 5 was still on the market. Not that I think that’s what Apple’s chief motivation was, but it could have been a factor. 5-5s was nowhere near as big a jump in performance as the 4-4s jump.