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iPhone 5C Orders Slashed Due to Lowered Demand

By - Source: The Wall Street Journal | B 30 comments

Apple slices orders for its kaleidoscopic iPhone, but it's not all bad news.

Apple's move towards a "cheaper" iPhone has not proven as fruitful as it had hoped. The colorful blend of iPhone 5C models were supposed to be a more affordable version of the latest iPhone, but when they were launched back in September, the general hope for a low cost phone was dashed by the $550 non-subsidized price tag. Now Apple's hope has lost its color as it proceeded to announce plans to the supplier to cut orders, as reported by The Wall Street Journal.

The article claims that Pegatron and Foxconn were told to reduce their orders this quarter. Pegatron accounts for about two-thirds of all the iPhone 5C production, and was told to slice orders by "less than 20%." While Foxconn accounts for the remaining third of the production line, it received an almost 30 percent cut in expected orders.

While this information is certainly not good for Apple, it does come with the news that the expected orders for the iPhone 5S were increased above expectations, probably because the difference in features and performance between the iPhone 5C and 5S is well worth the $100 dollar margin that separates them. Do you think Apple was blindsided by their own enthusiasm for its "lower price margin" product, or could this trend be the beginning of something worse for Apple? Feel free to tell us what you think in the comments section below.

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  • 1 Hide
    monsta , October 20, 2013 9:10 PM
    Guess they could'nt find enough colorful people....
  • 9 Hide
    JD88 , October 20, 2013 9:13 PM
    Does this really surprise anyone?

    $550 for specs that were low tier last year. Apple's usual model is to take last year's product and charge $100 less for it and call it a day. This year they did that, only made it even worse with plastic. Buying that would be moronic even for the typical iSheep.

  • 3 Hide
    rwinches , October 20, 2013 9:22 PM
    They are still selling a lot of 5Cs, the numbers are being held down because of existing stock of 5s, and the high figures for the 5Ss. I think 150k a day is still a lot of phones.
    I do think that the $100 differential was not enough, $150 or more would have been smarter, the target demo was China and there is no carrier discount so for $100 more you get the real thing.
  • 1 Hide
    JD88 , October 20, 2013 9:43 PM
    Quote:
    I like 5S better. New Apple A7 64bit dual-core 1.3Ghz is fastest chip for mobile on the market right now. Even better than Qualcomm Snapdragon 800 32bit quad-core 2.3Ghz chip. I thought Apple wants to stay away from ARM to go with FPGA chip? or maybe Intel?


    Fastest running benchmarks on Apple hardware and iOS. It's not actually computing faster than the Snapdragon 800.

    Everyone forgets that the iPhone has a low resolution screen and iOS is optimized specifically for that chip.



  • 6 Hide
    maddy143ded , October 20, 2013 9:52 PM
    this proves that apple still went for higher margin on a low margin product. and fell flat on its face.it took last years Iphone 5, reduced its production costs further by going for cheaper plastic, and kept the price same...
  • 3 Hide
    mrmez , October 20, 2013 10:21 PM
    Apple "fell on its face"? LOL.

    20 days worth of 5c sales and Apple sees ~2.6 million units sold.
    If they net $50 profit per phone thats still $130 million profit in a fortnight.

    I wish I could fall on my face like that.

    "Lower than expected" is just that, it doesn't necessarily mean an unprofitable product.
    The fact Apple is selling MORE than expected 5s, which are obviously more profitable is great news for them.
  • 1 Hide
    Leonardo L , October 20, 2013 11:07 PM
    Wasn't that their purpose? By pricing them so close it was realistic to expect "reverse cannibalisation". When I saw the prices I immediately thought that 5c was a way for apple to protect the premium positioning of the 5s, by placing their cheaper version on the same level of the premium model of their competitors.
  • 1 Hide
    halcyon , October 20, 2013 11:54 PM
    I wonder what would have happened if they would have offered black and/or dark grey.
  • -1 Hide
    killamike , October 21, 2013 12:31 AM
    Wow, I expected more from Tom's... this is such pure fanbait. Apple supply chain rumours (and yes, they are rumours, no-one knows the exact details of Apple's supply chain except Apple) are firstly non-indicative of anything. Just because they cut orders from one supplier does not mean they didn't increase them from another. It could be a yield issue (one supplier providing better or worse yield than another).

    Another point is that with massively massive supply chain operations like this, these sorts of fluctuations are normal. Its normal for Apple to have high orders for the launch period of a device, when, naturally, the device sells the most units in a short time-space, then cut the order once the initial surge of sales passes.

    Yes, it "could" be due to lower than expected demand, but no-one outside of Apple management knows this, and to print it as a fact (in the headline no-less) is disingenuous at least and a flat out lie at the worst. This is not journalism, its yellow pages "my husband was shafted by Aliens" type of fanboi clickbait.

    All we know is that Apple sold millions of the things (hardly a fail) and all other phone manufacturers (except maybe Samsung) would only dream to have that kind of "lowered demand".
  • -1 Hide
    digiex , October 21, 2013 1:01 AM
    Nobody wants a "cheap" Iphone.

    on the tabloid news: Timothy D. Cook is having a nightmare, dreaming of Steve J.
  • 0 Hide
    iamadev , October 21, 2013 1:30 AM
    Quote:
    Wow, I expected more from Tom's... this is such pure fanbait. Apple supply chain rumours (and yes, they are rumours, no-one knows the exact details of Apple's supply chain except Apple) are firstly non-indicative of anything. Just because they cut orders from one supplier does not mean they didn't increase them from another. It could be a yield issue (one supplier providing better or worse yield than another).

    Another point is that with massively massive supply chain operations like this, these sorts of fluctuations are normal. Its normal for Apple to have high orders for the launch period of a device, when, naturally, the device sells the most units in a short time-space, then cut the order once the initial surge of sales passes.

    Yes, it "could" be due to lower than expected demand, but no-one outside of Apple management knows this, and to print it as a fact (in the headline no-less) is disingenuous at least and a flat out lie at the worst. This is not journalism, its yellow pages "my husband was shafted by Aliens" type of fanboi clickbait.

    All we know is that Apple sold millions of the things (hardly a fail) and all other phone manufacturers (except maybe Samsung) would only dream to have that kind of "lowered demand".


    The5c is built by 2 companies and both received almost 20% cut in orders, they can't just go somewhere else to bump up the numbers. Articles like this are generally accurate and have been reported in many places.

    Apple is well aware that sales will spike on release day and would have planned for that so to say it is just because of the post release slump is wrong, it is just not selling quite as well as they would have liked.

    Don't worry though apparently sales of the 5s are going swimmingly, your favourite tech company is doing just fine.

  • 0 Hide
    mariusmotea , October 21, 2013 1:54 AM
    I gues this is because the "high price" feauture is missing from 5C.
  • 1 Hide
    er k , October 21, 2013 3:14 AM
    I Know an ex-android user who waited for the Iphone 5c , expecting it to be cheap priced. Then was disappointed with the price. Talked her into a Windows Phone Nokia 625. She is more than happy now. Saved here a LOT of Euro’s !
  • 1 Hide
    acadia11 , October 21, 2013 3:17 AM
    Quote:
    I like 5S better. New Apple A7 64bit dual-core 1.3Ghz is fastest chip for mobile on the market right now. Even better than Qualcomm Snapdragon 800 32bit quad-core 2.3Ghz chip. I thought Apple wants to stay away from ARM to go with FPGA chip? or maybe Intel?



    This isn't true at all. There is nothing fastest about it. Also, all mobile chips are highly optimized for the hardware they are running on ... it's the fastest mobile chip running iOS, it's not the fastest mobile chip on the market. Raw power there are many chips that walk all over it in the mobile space.

  • 0 Hide
    tomfreak , October 21, 2013 3:18 AM
    drop the price too $300-350, may be thats where it suppose to sell.
  • -1 Hide
    acadia11 , October 21, 2013 3:19 AM
    BlackBerry 10 is the best mobile OS on the market, you heard it here. T'is a shame BBerry finally got it right in building modern mobile OS but too few know it.
  • 0 Hide
    happycamperjack , October 21, 2013 3:51 AM
    A7 IS FASTER than Snapdragon 800 people! Come on, takes 3 secs to google the benchmarks.
  • 1 Hide
    killamike , October 21, 2013 4:04 AM
    Quote:


    The5c is built by 2 companies and both received almost 20% cut in orders, they can't just go somewhere else to bump up the numbers. Articles like this are generally accurate and have been reported in many places.

    Apple is well aware that sales will spike on release day and would have planned for that so to say it is just because of the post release slump is wrong, it is just not selling quite as well as they would have liked.

    Don't worry though apparently sales of the 5s are going swimmingly, your favourite tech company is doing just fine.



    This is what i'm talking about. I immediately get accused of being a fanboy simply for doubting some so-called "news". Yes, I have an iPhone (not one of the new ones, and not plannign on getting a new one soon as this one does the job) but I am far from a fanboy, I f**ing hate a lot of things about Apple, especially iTunes. Its a bloody abomination, and Safari on Windows is a joke. However for personal reason i choose to have an iPhone now. I've had an HTC Android phone before and i've used an S3 for work, and seriously considered a Nexus 4 for my last upgrade. I'm not here to debate the merits of each, but needless to say Apple is FAR from "my favorite company".

    My problem with these headlines is more due to my degree in media studies and journalism, and what passes for it these days is tragic.

    The source for this post (I can't call it an article) is the WSJ who have a history of badmouthing Apple at every chance they get. The original report comes from a Reuters article: http://www.reuters.com/article/2013/10/16/us-apple-5c-idUSBRE99F08J20131016 which also attempts to speculate on "poor sales" and such but at the very end they burried this bit:

    "Some analysts caution against correlating the cuts to Apple’s supplier orders with poor sales, because of the complexity and opacity of the company’s supply chain.

    “We’ve seen this several times. There are too many moving parts in the supply chain to draw any conclusions,” said Benedict Evans, who covers mobile and digital media at Enders Analysis, a research consultancy in London.

    “We don’t know what other suppliers they use or what inventory they already have.”

    That there is the crux of it. There is no way to draw conclusions from what Apple is doing here. Even as you yourself say, it might even have been planned by Apple all along, it may have been some sort of insurance agains exceptional demand, or against poor yields, or a reaction to better yields than expected (As I mentioned in my first post), or it may indeed be due to a poorer than expected demand.

    Point is, I expect this type of cherry picked headline and news from somewhere like phnadroid.com but not from Tom's i've read Tom's since I had access to internet over a decade ago and its always been one of the more classy publications but more and more are falling for the linkbait trap.

    Hell, i'm wasting time here debating pointless shit with people I don't know because of it. Whatever.
  • 0 Hide
    iamadev , October 21, 2013 5:02 AM
    Quote:
    Quote:


    The5c is built by 2 companies and both received almost 20% cut in orders, they can't just go somewhere else to bump up the numbers. Articles like this are generally accurate and have been reported in many places.

    Apple is well aware that sales will spike on release day and would have planned for that so to say it is just because of the post release slump is wrong, it is just not selling quite as well as they would have liked.

    Don't worry though apparently sales of the 5s are going swimmingly, your favourite tech company is doing just fine.



    This is what i'm talking about. I immediately get accused of being a fanboy simply for doubting some so-called "news". Yes, I have an iPhone (not one of the new ones, and not plannign on getting a new one soon as this one does the job) but I am far from a fanboy, I f**ing hate a lot of things about Apple, especially iTunes. Its a bloody abomination, and Safari on Windows is a joke. However for personal reason i choose to have an iPhone now. I've had an HTC Android phone before and i've used an S3 for work, and seriously considered a Nexus 4 for my last upgrade. I'm not here to debate the merits of each, but needless to say Apple is FAR from "my favorite company".

    My problem with these headlines is more due to my degree in media studies and journalism, and what passes for it these days is tragic.

    The source for this post (I can't call it an article) is the WSJ who have a history of badmouthing Apple at every chance they get. The original report comes from a Reuters article: http://www.reuters.com/article/2013/10/16/us-apple-5c-idUSBRE99F08J20131016 which also attempts to speculate on "poor sales" and such but at the very end they burried this bit:

    "Some analysts caution against correlating the cuts to Apple’s supplier orders with poor sales, because of the complexity and opacity of the company’s supply chain.

    “We’ve seen this several times. There are too many moving parts in the supply chain to draw any conclusions,” said Benedict Evans, who covers mobile and digital media at Enders Analysis, a research consultancy in London.

    “We don’t know what other suppliers they use or what inventory they already have.”

    That there is the crux of it. There is no way to draw conclusions from what Apple is doing here. Even as you yourself say, it might even have been planned by Apple all along, it may have been some sort of insurance agains exceptional demand, or against poor yields, or a reaction to better yields than expected (As I mentioned in my first post), or it may indeed be due to a poorer than expected demand.

    Point is, I expect this type of cherry picked headline and news from somewhere like phnadroid.com but not from Tom's i've read Tom's since I had access to internet over a decade ago and its always been one of the more classy publications but more and more are falling for the linkbait trap.

    Hell, i'm wasting time here debating pointless shit with people I don't know because of it. Whatever.


    You may have a journalism degree but you may want to revisit your reading comprehension.

    It is a well known fact that Apple has 2 manufacturers for their iPhone 5C, both have "leaked"/rumoured 20% drop in orders. You are correct this does not reflect what supplies they have but Apple have been well known to be very good at planning their supply chain and if they have more supply than they were expecting then they are clearly selling less than they were expecting.

    I don't understand why you are so butt hurt over this article/post whatever you want to call it. If they are squashing orders by 20% there s a very strong chance they are selling less than they were expecting. That is not to say they are not selling extremely well which they obviously are but you are being very nitpicky here.

    I've also read Toms for a very long time, at least 15 years now, I would strongly agree that the journalistic integrity is not what it once was but this post is very cut and dry. Lots of places are reporting a drop in orders of iPhone5c by about 20% which means that Apple is requiring about 20% less than they thought they would need. This shows they over estimated the demand for this iteration of the iPhone, the only thing that could mean is they are selling less than they thought they would which is exactly what the post suggests.
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