Market Overview

iPhone 5C Might Be 50% Less Popular Than Apple Anticipated

Apple (NASDAQ: AAPL) recently set a new record for combined iPhone sales, but its success may not be attributed to the iPhone 5C.

According to a CNET translation of a report by Chinese-language website C Technology, Apple has significantly reduced its daily orders of the iPhone 5C.

Up until now, Apple wanted 300,000 iPhone 5C units every day. Now the company is only ordering 150,000 units -- exactly 50 percent less than before.

In the United States alone, the iPhone 5S outsold the iPhone 5C by a factor of 3.4x.

According to Unwired View, sales of the iPhone 5C fell 30 percent on China's grey market (where legal but unauthorized sales occur).

This is a stark contrast from the hype that preceded the iPhone 5C's unveiling. Based on the media hoopla, analysts expected the plastic handset to fly off the shelves.

Then again, analysts also thought that it would sell for $300 to $400 without a contract -- not $549.

Related: Apple's iPhone 5C Could Boost European Sales

Regardless, Apple has been heavily promoting the iPhone 5C's "Greetings" ad on national television. The iPhone 5S is not being advertised nearly as much.

In an effort to get rid of excess inventory, retailers have been begun to discount the price of the iPhone 5C. Best Buy (NYSE: BBY) is the latest retailer to take action, resulting in a $50 price cut.

T-Mobile (NYSE: TMUS) and Wal-Mart (NYSE: WMT) reduced their prices before the handset was even released.

These and other reports indicate that the iPhone 5C has fallen below expectations.

Global Equities Research analyst Trip Chowdhry thinks that this is because the iPhone 5C was developed for kids. He believes the product will be successful but not with the typical crowd of iPhone buyers.

"[Parents] said that whenever they get home, the kids take their iPhones," Chowdhry told Benzinga. "Some put it in their mouths, some start playing with it -- it's very difficult to pull it out of their hands. But they're also worried; the current form factor of the iPhone 5 and iPhone 4S is not very safe for the children. Plastic is ideal for them."

Parents don't typically rush out and buy phones for their kids, so it could take time for the iPhone 5C to reach its true sale potential.

Even then it may be unable to reach Apple's (and analysts') lofty goals.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.

Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ

Posted-In: Apple Global Equities Research iPhone 5C iPhone 5S T-MobileNews Rumors Tech Best of Benzinga

 

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