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Apple Reduces iPhone 5C Orders By 50% From One Supplier

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Apple Reduces iPhone 5C Orders By 50% From One Supplier

Yet another sign that Apple's (NASDAQ: AAPL) plastic iPhone is not performing well at retail.

According to DigiTimes, Pegatron (the chief manufacturer of the iPhone 5C) has had its orders reduced by more than 50 percent.

This is especially significant because Pegatron has reportedly received 70 percent of the total iPhone 5C orders from Apple.

In theory, Apple could be reducing its orders at Pegatron to increase orders at another manufacturer. However, Foxconn owner Hon Hai Precision Industries (OTC: HNHPF) has reportedly reduced its iPhone 5C orders multiple times. In fact, Foxconn may stop producing the iPhone 5C altogether at its factory in Zhengzhou, Northern China. If true, the iPhone 5C is expected to be replaced by additional units of the iPhone 5S, which has sold very well since it was released on September 20.

On Apple.com, consumers who order an iPhone 5S today will still have to wait three to five days before the product is shipped. This indicates that demand has remained fairly high a full two months after the smartphone was released.

The iPhone 5C, however, still ships within 24 hours.

Virgin Mobile, the one carrier that had sold out of the iPhone 5C, is now shipping all units without delay.

Related: iPhone 5C Is 50% Less Popular Than Apple Anticipated

While there was a lot of excitement for the iPhone 5C before it was announced, consumers responded to the actual product with a collective yawn. The iPhone 5S drew massive crowds when it arrived, overshadowing any success the iPhone 5C may have had.

But retailers seemed to be just as fearful of the iPhone 5C as analysts were the day it was unveiled.

Wal-Mart (NYSE: WMT) responded to the product's low demand by reducing the contract price ahead of the iPhone 5C's release.

T-Mobile (NYSE: TMUS) quickly followed suit and reduced the price for those purchasing the device without a contract. Other retailers eventually did the same.

The iPhone 5C is expected to be a hot item on Black Friday, thanks in part to Wal-Mart, which will sell the plastic smartphone for $45. The fee requires a two-year contract, but it also comes with a $75 gift card.

In other words, Wal-Mart is actually paying customers $30 ($75 gift card - $45 fee = $30) to take home an iPhone 5C.

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: Digitimes foxconn Hon Hai Precision Industries iPhone 5C iPhone 5SNews Rumors Tech Best of Benzinga

 

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