Apple has asked its iPhone suppliers in China to cut down on production of its iPhone 5c model, according to a new report by The Wall Street Journal. This is the second time we’ve heard this in as many weeks.
Last week, it was reported by Chinese web site C Technology that Apple had cut their iPhone 5c orders in half—from 300K units per day, to 150K—spawning speculation that the device isn’t selling very well…
From The Journal’s report:
“Apple Inc. AAPL +0.53% has notified its two assemblers for the low-cost iPhone 5C that it is reducing orders of the smartphone for the fourth quarter, people familiar with the situation said, raising concerns about weaker-than-expected demand and its pricing strategy for the device.
Pegatron, which analysts say assembles two thirds of the iPhone 5Cs, was told orders would be cut by less than 20%, said a person familiar with the matter. Hon Hai, which assembles the remaining low-cost iPhones, was told orders would be cut by a third, said two people familiar with the matter.”
While much of the tech world is quick to put an ‘Apple is doomed’ spin on this information, there are just way too many unknown variables here to say that this is evidence that the iPhone 5c isn’t selling.
It’s also important to remember that although Apple is marketing the 5c as a new device, it’s essentially the iPhone 5—Apple’s mid-tier device. How concerned were folks with iPhone 4s sales figures last year?
Of course, as we’ve said before, anytime the words ‘cut’ and ‘production’ are used in the same sentence describing an Apple product, investors and analysts panic. Regardless of the reason, it’s just bad PR.
The good news, though, is that The Journal is also reporting that Apple has raised orders for its high-end iPhone 5s for Q4. The handset has been hard to find, but shipping times recently dropped to 2-3 weeks.
All of this will make for great fodder for analysts during the Q&A portion of Apple’s upcoming quarterly earnings call. It’s slated to begin at 2pm PST on Oct. 28, and as usual, we’ll be bringing you the highlights.