Apple (AAPL) Said to Have Trimmed Orders for Low-Cost iPhone 5c
The WSJ said that Apple has trimmed orders for its iPhone 5c in Q4 with Taiwan-based suppliers Pegatron and Hon Hai Precision (Foxconn). Sources said the move might be due to weaker demand from its pricing strategy.
Pegatron -- which assembles about two-thirds of Apple iPhones -- said orders would be cut less than 20 percent, while Foxconn said order might be cut by a third.
The WSJ also cited a component supplier, which said it received notification that orders would be cut 50 percent, suggesting slowdown heading into 2014.
Apple launched the iPhone 5c and iPhone 5s last September in 11 markets, with a broader roll-out expected at the end of this month and into November.
Foxconn has moved to stop hiring workers on lower 5c orders, after stating in September it would be
beefing upits workforce to meet demand.
However, demand for the iPhone 5s has been robust. Foxconn said Apple has raised orders for the device on stronger demand.
While it might seem that cutting component orders is a sure sign of weak demand, Apple has made similar moves in the past and lower component orders isn't a direct correlation with expectations. However, carriers and retailers in both the U.S. and China have been trimming prices and offering other deals to move more iPhone 5c units, as highlighted by Sprint (NYSE: S), Target (NYSE: TGT), Wal-mart (NYSE: WMT), and more. Prices on the 5c have hovered around $50 or less in the States as companies look to draw in more business.
One Mizuho analyst recently commented that Apple's
high price point in China makes it difficult for the company to compete in the world's largest mobile market by subscribers ... Customers in more developed markets like the U.S. and Hong Kong also prefer buying the iPhone 5S because of the little pricing difference between two new iPhones.
Shares of Apple are down 0.3 percent early.