Apple Cuts Orders of iPhone 5C As Consumers Prefer 5S

By: Taylor Pineda

The people have spoken, and they are not a fan of the recently released iPhone 5C. A source familiar with its supply chain stated Wednesday, fueling speculation the cheaper model of its main gadget may have been priced too high.

As reported by the Wall Street Journal, Apple has asked one of the largest suppliers of the top-tier 5S to increase production which went on sale at the same time as the 5C. This is with concern that the cheaper 5C will erode margins of the more expensive 5S.

The Wall Street Journal reported that Hon Hai Precision Industry Co, a major assembly contractor for the 5C, had its orders for the most recent period reduced by a third.

Parallel to this, Apple raised orders for the 5S in the fourth quarter, said the Wall Street Journal, quoting two Hon Hai executives.

Analysts said the decision by consumers to spend more on the pricier 5S benefits Apple, “survey work indicates a significantly higher sell-through mix of iPhone 5s versus 5c that should benefit near-term Average Selling Prices and margins,” Canaccord Genuity analyst Michael Walkley stated.

In the United States, the 5C is $100 cheaper than the premium 5S, which starts at $649 for the 16 GB model.