Print 12 comment(s) - last by Tony Swash.. on Oct 19 at 7:20 PM

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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By Flunk on 10/16/2013 2:28:45 PM , Rating: 2
It makes you wonder if Apple made the iPhone 5C an intentionally poor value to avoid the problem they had with the iPad Mini greatly outselling the iPad. It works out well for them as they sell more top-end phones this way.

RE: Intentional?
By retrospooty on 10/16/2013 2:59:08 PM , Rating: 2
I dont get it either... It seemed to make sense to replace the low end, free on contract, but for the middle? Not so much.

RE: Intentional?
By embedded_bill on 10/16/2013 5:22:13 PM , Rating: 2
It doesn't make sense to me that it would be intentional. Apple's cutting and increasing orders in the past seemed to hit the news and I'm sure news of component and production cuts are never something that Apple would wants in the media.

That said, I'm sure that Apple marketing is aware that if you have the money to spend on an Apple phone, you probably have another $100. Kind of confusing!

RE: Intentional?
By Samus on 10/16/2013 9:28:21 PM , Rating: 3
I think it's plausible to assume the 5c was designed to fail. After all, why the hell would anybody buy it over the 5s when you're already spending so much money in the first place.

It's the same problem Toyota is having selling the Prius C. It's priced 8% lower than the Prius while being more compact, cheaper feeling with less features and negligible difference in fuel economy. No wonder the Prius still outsells it 6:1.

After all, if people wanted a cheap iPhone, they're better off picking up the original iPhone 5 (which is identical to the 5c internally, made out of premium materials, and ironically less expensive!)

RE: Intentional?
By slunkius on 10/17/2013 12:56:11 AM , Rating: 2
not designed, but priced to fail. but i remember first iphone had pricing issue too, and these are not so hard to fix.

RE: Intentional?
By AntDX316 on 10/17/2013 7:15:38 AM , Rating: 2
I say the same thing about the 740i and other options people dont get like navigation and premium sound when they spend that much

In best buy they had a same color 5C phone.. it wasn't plastic tho but a nice metal that seemed cool

I'm not sure if its the 5C but the entire back was the color of the 5C blue

If they are saying that is plastic w/o the finger print reader and a 64-bit processor I think it's still worth the $550 to those who buy it

RE: Intentional?
By Tony Swash on 10/19/2013 7:20:00 PM , Rating: 1
I think it's plausible to assume the 5c was designed to fail.

That's not plausible. This on the other hand is a more incisive view of what is going on with the 5s and the 5c.

Take away quote.

If, as I suspect, next year’s high-end model comes with a larger screen (with the mid-tier model staying the same size), developing the capability to manufacture different models will be particularly forward-thinking. Apple is teaching itself to manage two relatively similar lines before they branch out into even more significant segmentation.

RE: Intentional?
By swizeus on 10/17/2013 8:53:12 AM , Rating: 3
Make sense. In order to make something more precious, there should be something to compare.

In this case, it does make sense Apple intentionally get iPhone 5C a cheap look and still persist it is a great product while cranking up sales of 5S. Which one consumer, choose it is profitable, but with this psychology war, Apple get a greater margin because who wants a cheaper feel when you have shelled out so much money and can get the FLAGSHIP for just another $100 ?

RE: Intentional?
By spronkey on 10/17/2013 5:20:56 PM , Rating: 2
I think this is absolutely the case. They're masters of making people upgrade for "just a bit more" - just look at the price of their upgrades vs next model in Macs.

RE: Intentional?
By retrospooty on 10/17/13, Rating: 0
Post the real cost
By Dr of crap on 10/17/2013 12:08:56 PM , Rating: 2
You can get a 5C at Best Buy for $79 and at Walmart for $45, with a contract of course.
Cheap for a new cell for any cell maker.

RE: Post the real cost
By ritualm on 10/17/2013 8:58:24 PM , Rating: 2
On-contract prices are always more expensive than off-contract. In the case of the 5C, it is already more expensive than many mid-range phones in its immediate vicinity.

The off-contract price for the 64GB 5S here is $920. Think that's bad? Try another 13% taxes on top of it. I can get a full blown Ultrabook for that amount of money, for jebus cryst sake.

"Can anyone tell me what MobileMe is supposed to do?... So why the f*** doesn't it do that?" -- Steve Jobs

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