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It raised iPhone 5S orders, though

Apple reportedly told its Asian component makers to cut iPhone 5C orders next quarter, but increase iPhone 5S orders. 

According to The Wall Street Journal, Apple told its two component assemblers -- Pegatron Corp. and Hon Hai Precision Industry Co. -- to cut shipments of the iPhone 5C in Q4 2013. More specifically, Pegatron is to cut orders by less than 20 percent and Hon Hai is to cut orders by a third. 

In response, Hon Hai has stopped hiring additional workers to produce the iPhone 5C. A parts supplier received a 50 percent cut in orders for iPhone 5C parts, which likely means an inventory reduction by assemblers.

Some worry that the cut in iPhone 5C orders means lower-than-expected demand for the device. Analysts have said that the 5C was supposed to be a budget phone that would reach a broader audience -- for instance, the Chinese market where customers don't have subsidized pricing. While analysts expected a $350 phone, the 5C ended up being $550 (only $100 less than the flagship iPhone 5S). 


But it doesn't look like Apple is hurting over the cut in iPhone 5C orders. In fact, it upped iPhone 5S orders with its suppliers and saw a rise in its stock this morning. 

Apple shares opened 0.8 percent higher today, sending the company's shares to a one-month high above $502. Analysts say the boost is due to customers deciding to pay the extra $100 for the iPhone 5S, and that the device has seen significant sales since its September launch. 

Apple released the iPhone 5S and iPhone 5C last month. The 5S runs $199/$299/$399 for 16GB/32GB/64GB respectively with a two-year contract, or $650/$750/$850 without a contract. As for the 5C, it runs $99/$199/$299 for 16GB/32GB/64GB respectively with a two-year contract, or $550/$650/$750 without a contract. 

During launch weekend, the iPhone 5S/5C together topped 9 million sales

Sources: The Wall Street Journal, Reuters





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