Apple cutting down iPhone 5c production on slow demand, compensates with more iPhone 5s orders

Apple cutting down iPhone 5c production on slow demand, compensates with more iPhone 5s orders
Apple is said to be cutting down iPhone 5c production and bumping iPhone 5s manufacturing as all clues point to a weaker than expected demand for Apple’s new plastic and colorful iPhone. Apple has warned its two biggest manufacturers in China, Hon Hai and Pegatron, that it is trimming down iPhone 5c orders, according to the Wall Street Journal.

The two Taiwanese assembling companies were allegedly told that iPhone 5c orders will be cut in the fourth quarter of the year. Pegatron is estimated to be making two thirds of the iPhone 5c and it expects to see a 20% drop in orders, a loss that it won’t be able to compensate for and will likely hurt the manufacturer significantly. Hon Hai, manufacturing the remaining third of iPhone 5c, will allegedly cut production by 30%. Component makers have also received the note and some are saying the cuts will reach 50%.

Update: Now Reuters also confirms the cuts in orders for the iPhone 5c to manufacturers. This adds even more credibility to this rumor, and we'd treat this as close to a fact as it gets.

Why manufacturing numbers matter hugely, they are not the only conclusive evidence for lackluster demand for the iPhone 5c. Just looking at Apple Store shipping times shows that iPhone 5c would ship to customers within just 24 hours, while for the iPhone 5s the waiting time is 2 to 3 weeks.

More evidence for the slow demand for the colorful plastic iPhone could be found in the almost instant price cuts across retailer stores like Wal-Mart. The retailer dropped the iPhone 5c price by $20 almost right after its launch, and others have been offering the device for $49.99 on contract, an unprecedented $50 drop in price for the Apple device.

Apple announced record sales of 9 million units of its new iPhones over the first weekend of availability, but did not break down sales per model. In contrast with the iPhone 5c, the higher-end iPhone 5s with Touch ID fingerprint sensor technology, is in high demand with particular interest focused on the gold-colored version.

source: Wall Street Journal

Related phones

iPhone 5s
  • Display 4.0" 640 x 1136 pixels
  • Camera 8 MP / 1.2 MP front
  • Processor Apple A7, Dual-core, 1300 MHz
  • Storage 64 GB
  • Battery 1570 mAh(10h 3G talk time)
iPhone 5c
  • Display 4.0" 640 x 1136 pixels
  • Camera 8 MP / 1.2 MP front
  • Processor Apple A6, Dual-core, 1300 MHz
  • Storage 32 GB
  • Battery 1507 mAh(10h 3G talk time)

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51 Comments

1. tech2

Posts: 3487; Member since: Oct 26, 2012

LOL....compensate with 5s by reducing orders for 5c. Now thats a compensation every company would like to make !

40. Finalflash

Posts: 4063; Member since: Jul 23, 2013

Well, that is quite a success for Apple. They have accomplished what they set out to do. Reduce demand for lower end offerings by shafting them hard and increase demand for higher end offering by force by reducing value and quality in competing products (which in their monopoly on iOS is their own product, aren't monopolies wonderful).

47. RiseAgainst94

Posts: 281; Member since: Mar 03, 2012

Compensate? lol. 5S is kicking every other phone's ass in sales.

2. PhoneArenaUser

Posts: 5498; Member since: Aug 05, 2011

Put 5S price on 5C and 5C price on 5S and majority of Apple fans will be buying 5C not 5S. ;)

7. hons9424

Posts: 7; Member since: Aug 07, 2013

Just change name of 5C to 5SS will do!!!

3. Sniggly

Posts: 7305; Member since: Dec 05, 2009

This, of course, comes right as ardent1 attacks me for agreeing that iPhone 5c sales missed Apple's expectations. (He seems to think that when I say "lower than expected sales" I mean "no sales.") In the course of the tongue lashing I received, he cited Apple's "massive sales" of the 5c. Ardent, take this as a lesson, please. Whatever native knowledge base you have isn't enough. Your arrogance has been costing you more and more lately. You're a smart guy. Just stop letting your bias blind you to the facts.

14. protozeloz

Posts: 5396; Member since: Sep 16, 2010

Dude, that guy is a waist of time. He tries to be smart and find workarounds to make things sound favorable for him but as long as he gets cornered then you see what he really is... Plus he lacks reading comprehension

19. ardent1

Posts: 2000; Member since: Apr 16, 2011

The problem with protozeloz's flawed assertion is that Sniggly claims he is "telepathic" by construction. Why, because Sniggly stated "I called it that sales of the phone didn't match Apple's expectations." Sniggly ignores the basic fact Apple NEVER released its sales expectations -- therefore, for Sniggly to be correct, he had to have a unique ability to look into the minds of Apple CEO and high level executives. He had to have that special ability of telepathy that we mere mortals don't have. Sniggly then wrote: "Want to see the photo I took of my full drawer of 5c's, which consists entirely of the initial shipment?" Sniggly then provides photos of UNSOLD iPhone 5C. Sniggly argues that because these iPhone 5C were unsold at his store, he must have been correct that iPhone 5C sales never met Apple's unannounced expectations -- why, because this is Sniggly logic! In summary, Sniggly argues Sniggly is all-knowing, thus telepathetic by construction. The problem is sales of 5C have been estimated to be between 25% to 33% of total iPhone 5S and 5C sales. These data points contradiction Sniggly's argument of 5C are not selling. Sniggly complete IGNORES THE FACT these stories are rumors and hearsay. Instead, I debate using established facts. Btw, check out this articlehttp://finance.yahoo.com/news/rumors-apple-iphone-5c-could-103555038.html

22. good2great

Posts: 1042; Member since: Feb 22, 2012

why is he taking pics of phone inventory at work and sharing it? boy its stupid people in this world... if you get caught dude you're getting fired! dumbass... what's even more dumb, he thinks just because his drawer is full apple isn't selling enough. smh

28. protozeloz

Posts: 5396; Member since: Sep 16, 2010

Yes, they are rumors (by two sources now), but can you fight rumors with more rumors? You happen yet have a magical ball that's tells you these numbers are wrong? You know what apples expectations where? I can copy your same comment (expt for the pictures part) and it will also apply to you... Just saying

29. Slammer

Posts: 1515; Member since: Jun 03, 2010

---" Apple NEVER released its sales expectations"--- It didn't need to in this case. Slashing the orders in half shows they were expecting far more orders and it didn't pan out. To me, this news means they expected twice as much sales for the 5c. This also proves the old saying: "You can fool all of the people some of the time and some of the people all of the time, but you can't fool all of the people all of the time." Apple schlepping a less expensively manufactured iP5 and trying to prop up the 5c as all new while eliminating the iP5, just doesn't sit well with diehard Apple fans. Even Apple fans know a bad deal and a scam when they see it. John B.

42. Sniggly

Posts: 7305; Member since: Dec 05, 2009

I never claimed I was telepathic. Your denial of the connection of presented facts to the conclusion that 5c sales missed expectations is extraordinary. The two articles discussing lowered production of the 5c support the concept of missed sales expectations, because now Apple is trying to save money by not producing phones it now knows it won't sell. There's no need for more 5c's if the current inventory isn't selling out. This is corroborated by the inventory levels at my Best Buy and others, since unlike the 5s, we never even came close to selling out of the 5c. This has never happened through the last two iPhone launches. Apple has never sent us far more devices than have sold through to customers. Why? Because Apple is a smart company that wouldn't waste money building product if it knows it won't sell through. As if that weren't enough, never before have Apple products had such steep sales so early. We're running the same trade in deal on the 5c that we ran on the 5 prior to the 5s launch in order to get rid of 5 inventory. Yes, you read that right. We're running a sale on current stock of a brand new device that we last ran on an aging device we (and Apple) wanted to get rid of. So no, I'm not telepathic. I'm just intelligent enough to connect the dots and draw conclusions-conclusions which, so far, are looking more and more accurate.

45. PapaSmurf

Posts: 10457; Member since: May 14, 2012

Just curious because I actually plan on persuing a job in the future, but how did you get a job with BB Mobile? Do you need certain qualifications or just experience in retail?

49. Sniggly

Posts: 7305; Member since: Dec 05, 2009

Experience with phones definitely helps, as well as retail/sales experience. You have to be 18 for mobile and be available 12 hours a week. You can't work at any other place that deals with or sells electronics. I'm technically breaking that rule by working for Walgreens as my second job, but their prepaid/electronics sales are relatively miniscule so I think they let it slide. Also, it doesn't pay an extraordinary amount. It's a fun place to work though, and the employee discounts range from meh to goddamn awesome.

15. ardent1

Posts: 2000; Member since: Apr 16, 2011

Welcome to the world of Sniggly Math. The last phonearena article had the rumor of 5C production cut at 50%. This article has the rumor of 5C production cut at 20% (at Pegatron) and 33% (at Hon Hai), respectively. In the world of Sniggly Math, a 20% or 33% product cut is actually worse than a 50% production -- why, because Sniggly said so.

17. protozeloz

Posts: 5396; Member since: Sep 16, 2010

20% + 33% > 50% just saying man... Its math

23. ardent1

Posts: 2000; Member since: Apr 16, 2011

Welcome to the world of protozeloz MATH. Let X be the original units of iPhone 5C produced and assume Pegatron produces 20% of X and Hon Hai produces the balance or 80% of X. With the first phonearena.com article with the rumored 50% production cut across the board, we are left with Pegatrion producing 10% of X and Hon Hai producing 40% of X. Thus, the new production level is in effect at 0.5X or 50% of the old production level. In the new rumor, Petragon will now produce 16% of X (reflecting a 20% reduction) and Hon Hai will know produce 54% of X (reflecting a 33% reduction). The new combined production level is 0.7x or 70% of the old production level. This is a very simple algebra problem, typically taught in 7th or 8th grade. The rest of us understands that 70% of X is larger than 50% of X, but what do we know???? Again, we have Sniggly Math and now we have protozeloz MATH.

24. protozeloz

Posts: 5396; Member since: Sep 16, 2010

Well at least we know you don't get sarcasm either

27. protozeloz

Posts: 5396; Member since: Sep 16, 2010

Also your math has so many assumptions, we won't actually know how much those numbers mean compared with the others. Was the 50% truly a 50%? or a misconception of a 20% and 30% cuts? Just saying you can't fight fictional numbers with more fictional numbers

30. Mxyzptlk unregistered

I wouldn't take what he says to heart. He continues to hound apple yet he refuses to acknowledge his favorite OEMs shortcomings regarding updates to capable phones.

41. Sniggly

Posts: 7305; Member since: Dec 05, 2009

What did I say about your arrogance getting the best of you? Nowhere did I say that these production cuts in this article are "worse" than those in the last article discussing 5c production cuts. I've tried being nice to you. I've tried acknowledging that you're not all bad. However, you continue to launch nonsensical attacks on my arguments which make progressively less sense. So fine. If you want it this way, then no more mister nice guy. I won't waste time trying to defend your character or treat you better. I'll treat you with the same callousness that I reserve for Mxy. After all, you're no better than he is.

51. DukeX

Posts: 327; Member since: Aug 28, 2013

Man that ardent guy never stops. I never pay him any attention

31. Mxyzptlk unregistered

Do you ever stop?

38. PhoneArenaUser

Posts: 5498; Member since: Aug 05, 2011

Don't cry.

43. Sniggly

Posts: 7305; Member since: Dec 05, 2009

No. I'm the terminator of bad arguments.

4. LetsBeHonest

Posts: 1548; Member since: Jun 04, 2013

As expected...

5. _Bone_

Posts: 2155; Member since: Oct 29, 2012

Told you so. A "cheap" alternative that's still expensive, Apple doesn't understand what mid-range means.

50. Landmarkcm

Posts: 507; Member since: Aug 11, 2009

Lol I really dont get peoples "cheap" remarks. I prefer the plastic myself and the blue its what partially drew me to it. By expensive yes for apple, full retail prices are still pretty high. ( I am glad though this should still hold a good resale value) . But ya the great deals on new contract like I got for 79.99 well there great , For what is still a very good device.

6. Tsepz_GP

Posts: 1176; Member since: Apr 12, 2012

I'm sure Apple are more than happy to just make more of the more expensive, higher margin 5S.

11. rusticguy

Posts: 2828; Member since: Aug 11, 2012

Yup till it cuts the production of same in next 6 -8 weeks.

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