Apple reportedly cuts iPhone 5C production for Q4, raises concern about demand
Apple has cut iPhone 5C orders with two manufacturers in China for the fourth quarter, The Wall Street Journal reports. The move by Apple might suggest demand for the lower-cost iPhone is weaker than expected, which insiders blame on the awkward pricing of the handset.
As you'd expect, Apple hasn't confirmed the cuts, but the latest report follows word from Chinese website C Technology which revealed the average daily production of the brightly coloured handsets now totals 150,000 units, where it was previously 300,000. The Wall Street Journal's sources didnt think it was that drastic a cut for all of Apple's suppliers, however. Pegatron was notified it would be cut by less than 20 per cent and Foxconn notified it would be cut by a third.
It should be noted that technology companies often cut manufacturing as popularity of a handset decreases. The same thing happened with the iPhone 5, when Apple quickly cut orders for iPhone parts. The Wall Street Journal did note that Apple had raised orders for the high-end iPhone 5S for the fourth quarter. We assume the gold model could be the reason.
Many retailers and networks worldwide noted in September that pre-orders for the iPhone 5C were lower than expected before the launch, and while Apple sold more tvan nine million new iPhones globally in the first weekend of sale, the vast majority of those were believed to be the slightly more expensive iPhone 5S devices.
Could the source of lower than expected sales be the iPhone 5C's price point? Insiders and customers alike were anticipating a budget device and Apple delivered a handset with a competitive mid-range price instead.
We should know more when Tim Cook and Co meet investors on 28 October to talk fiscal Q4 earnings. Here we'll get the company's breakdown on the last quarter, and what it plans to do in the next quarter. There should be plenty of questions about the iPhone 5C, too.