Wall Street Journal backpedals on iPhone 5c supply chain cuts story

“After first ignoring advice from Apple’s chief executive Tim Cook not to speculate on rumors related to the company’s supply chain, the Wall Street Journal has subsequently toned down its alarmist story of iPhone 5c cuts and retailer discounting,” Daniel Eran Dilger reports for AppleInsider.

“Yesterday, the Journal joined Reuters and other major media outlets in targeting Apple’s iPhone 5c with speculative, worrisome concerns based on assumptions and guesswork built on top of poorly conceived interpretations of unverified data,” Dilger reports. “Under the initial headline “Apple Cuts iPhone 5C Orders,” a report by Lorraine Luk, Eva Dou and Ian Sherr for the Wall Street Journal outlined supplier cuts it defined as less than 20 percent at Pegatron and ‘one-third’ at Foxconn. The article didn’t outline how many iPhone 5c models Apple had been building, or how many it planned to build at launch or throughout the quarter, or if the changes were planned in advance or in response to production yields.”

“By the end of the day, the paper changed its headline to ‘Apple’s Dual iPhone Strategy in Doubt,’ shifting the narrative to focus on the idea that Apple’s plan to ‘broaden its appeal with a cheaper version of the iPhone… appears to be faltering after a few weeks,'” Dilger reports. “The Journal observed in its second edition, “the fact that the 5C appears to have missed Apple’s expectations may not be all bad, especially if it means consumers are buying more of the 5S, the higher-end iPhone that came out at the same time last month and sells for $100 more.”

Tons more – highly recommended – in the full article here.

MacDailyNews Take: iPhone 5c is for disillusioned Fragmandroid settlers as they come off contract (God knows they’d never pay a cent to get out of their mistake early). iPhone 5c is not a phone for which anybody lines up at launch. iPhone 5c will have consistently good sales over time. iPhone 5c is already selling better vs. iPhone 5s than iPhone 4s did vs. iPhone 5.

Also, with its pricing, it’s likely very effective in upselling iPhone 5s.

[Thanks to MacDailyNews Readers “Fred Mertz,” “Bill,” and “JES42” for the heads up.]

Related articles:
Apple ups iPhone 5s orders, ramps down iPhone 5c production, sources say – October 16, 2013
Apple cuts iPhone 5c orders for Q4, says source – October 16, 2013
Why would anyone buy an iPhone 5c instead of an iPhone 5s? – September 10, 2013


          1. Has anyone heard of the concept of sarcasm?

            For those in the back row, Joker’s comment is meant to illustrate the knee-jerk reaction of some people in the blogosphere whose universal comment for almost every single story about Apple is to “fire Tim Cook”, as he is, supposedly, a terrible CEO.

            1. And if a joke HAS to be explained, it was never funny.

              In an environment where people actually say that and worse, there can be no expectation that everyone will understand it’s a sarcastic joke.

            2. We all get the sarcastic intention Predrag. It’s just that any humour associated with the original idea has long since dissipated through endless repetition.

              Bring back Zune Tang.

  1. The iPhone 5C is overpriced junk for attention addled teenagers. What makes it even more of a junk phone is the awful iOS 7. I cannot understand how Apple made its decision to match iOS 7 wallpaper colours with the plastic back iPhone 5C. I don’t think I will be buying one any time soon until Apple sorts out the bubblegum operating system. It’s just too awful to contemplate if you’re someone over 14.

    I don’t doubt that the Wall Street Journal got its story exactly right. AI is a fanboy blog. The WSJ is a respectable newspaper. No comparison between the two.

      1. You sound like my brain addled uncle with Alzheimer’s talking to himself repeating the same nonsense about meeting imaginary people at the retirement home where he’s committed. Who is this Gary you keep mumbling about? Take your meds and shut your pie hole.

        1. I don’t know you or think you are whoever Gary is. But, I felt compelled to respond. I only have one question… How lame is your life to need to hang around an apple fan site to post drivel to the enlightened? It must be incredibly dull for you to get a rise out of spending your time doing that. I have no doubt you will respond with something witty about me. Which will prove the point completely. The vision in my mind of the type of person your are is amazing. Please fulfill my vision further and respond.

    1. Except you just compared them. You need to learn how to right good. Donkey.

      “I don’t doubt that the Wall Street Journal got its story exactly right. AI is a fanboy blog. The WSJ is a respectable newspaper. No comparison between the two.”

    2. “The WSJ is a respectable newspaper.”

      Well, it was.

      If they got it “exactly right”, why did they change the headline?

      Was leaving out pertinent information for context part of their amazing journalistic effort?

      “I don’t think I will be buying one any time soon until Apple sorts out the bubblegum operating system.”

      You conflate the 5C and iOS7 in your comment. If iOS7 is such a drag on sales, why did the 5S, pre-loaded with iOS7, sell 2x or more than expected on opening weekend?

      “The iPhone 5C is overpriced junk …”

      Well, the 5C is essentially the 5 with a new wrapper, so as far as it being a “junk”, you are really far off base.

    3. The 5C is hardly “junk”. I suspect you suffer from very small junk complex. My daughter owns a pink 5C and it’s a delightfully solid device. VERY well made. The poor build quality is when your Mom & Dad made your junk brain.

  2. The story started with Kuo at KGI securities, who may or may not be on someone else’s payroll, and the press is jumping on it without any research. Try to first, then look for facts later is there motto. Nothing wrong with the 5c, and anyone who says it’s not meeting sales expectations are full of crap since they don’t know what the target was to begin with.

    As an experiment, it just goes to show that people are more interested in the high end version rather than the entry level so I don’t expect to see the v6 go with a plastic version.

  3. The 5C is for people who don’t think they deserve the 5S. They used to have to settle for android or blackberry… now they can get the 5C, in plastic, and feel safe.

    The 5C is a brilliant line extension because it plays to a certain late adopter / fear of number 1, embracing of number 2, mentality. The plastic makes it safe in the brains of these people, and the fear that it will get stolen, because it is clearly not the Gold 5S, is diminished.

  4. Tim Cook told them time and time again for the analysts not to try and track supply chain orders, but they just refuse to listen because they think they know more about supply chain movement better than Apple.

    Still, any fool should realize it’s more profitable for Apple to sell the higher priced 5s to consumers as long as it’s in high demand. These people are always trying to make Apple look like they don’t know how to run their business. How can they claim that the 5c is a sales failure based on less than a month sales since being introduced in the U.S. and even less time since being offered in other countries? There has to be some faction working against Apple for these type of stories to be published. You’d never see this type of story written about Amazon Kindle sales.

    1. “… because they think they know more about supply chain movement” — no, it’s because they they are paid for predictions, and the only new info they can scrape up is supplier reports. Apple offers quarterly guidance and nothing more.

      Analysts flesh out the paltry scraps according to the prevailing media narrative, which currently is the Doomed Giant.

      Reporters then pick up the story and add an acidic headline for the finishing touch.

  5. The iPhone 5c is a great device for anyone.

    What everyone seems to forget, haters aside (you can’t stop a hater from hating), is that the iPhone 5c plugs the hole in Apples’ product line between the iPod Touch and the iPhone.

    All those upgrades will happen, especially when Christmas rolls around, make no mistake about it. There will be millions of happy tweens come Christmas morning unwrapping their New iPhone!

    As for the speculation in the supply chain, it’s just that – speculation! I wouldn’t give it any weight.

  6. I still disagree with MDN’s take on the 5c (“iPhone 5c is for disillusioned Fragmandroid settlers as they come off contract (God knows they’d never pay a cent to get out of their mistake early). iPhone 5c is not a phone for which anybody lines up at launch.”). This is one of the instances where I find the take juvenile and unnecessary.

    I stood on line on day one (against my stated desire to wait) and purchased two of the 5c iPhones—one for a teenaged son and one for my wife. They don’t need the raw power of the 5s and would have been completely satisfied with the iPhone 4 models they’re both upgrading from. Not everyone needs 64-bit and fingerprint sensors.

    There’s more than enough in the phones to make them enticing as a purchase—first-time or otherwise. The cameras are overkill for many persons who choose to take snapshots for Instagram and Facebook, FaceTime is still enjoyable, the OS is still iOS (stable enough to be considered dependable), and—bottom line—it’s still an iPhone. I find the devices to be valuable and more than sufficient, despite being “plastic.”

  7. Disagree with the MDN take… Every woman I know has gotten a 5c. Most of my friends have bought a 5c for their kids. The view looks very different from the ivory-tower ‘analysts’ to us here in the real world. The 5c has a market – and it’s VERY big. Apple knows what it’s doing and was likely able to produce the 5c by an order of magnitude in quantity over its much more complicated sibling. Simply put, the channels were stuffed at the beginning with the 5c, and they don’t need to produce as many to meet ongoing demand. When I was at the launch here in Atlanta, almost every 40 something man I saw leave with a 5s also had at least one 5c as well. Just because they stuffed the channels at launch doesn’t mean they aren’t selling boatloads of them… And not to just ‘android’ sufferers like the MDN college interns would have you believe. 😉

    1. That’s right, john. Apple already knew how to build the 5 and only needed to switch out the frame and the antennas to make the 5C. There were no supply constraints and assembly was routine. The new 5S, like every new iPhone before it, had first-time jitters. Both models outsold their year-ago counterparts. “Supplygate” is rubbish.

      As for colour, that is one of the oldest selling points in general retail. If analysts don’t understand how it motivates consumers, it’s because they’re colourless themselves.

  8. What would you do if, upon launching of a new product, you expected a big burst of initial demand, followed by a gradual return to normal levels ?

    You would have large initial orders that you progressively reduce, according to your plan.

    Lowering orders at some point following launch would not signal lower than expected sales. It would simply match your plan and be exactly in line with your expectations.

    Since none of the pundits know what Apple is actually expecting, their speculation is moot.

    I believe Apple has a much better handle on what to expect than any of these outsiders. I find it very arrogant of them to draw conclusions based on partial and indirect information and second guess Apple who has all the data.

  9. I got a 5c for my wife. She is a complete Luddite when it comes to technology and doesn’t handle changes to tech very well. But right now she is using my old 3G, and it has seen better days.

    My 4S basically died a couple of weeks ago, so I bought the 5c as a temporary replacement. AT&T had a $200 trade-in for the old one, and that paid for the 5c.

    Once the furlough paycheck comes in, I’ll order a 5S “for her” and we’ll trade phones. She’s tried the 5c and likes it, so that will work wonders.

    Less expensive stuff is great for those who don’t demand the latest and greatest, but would still like a new item. She really wouldn’t use or even like the newer tech on the 5S.

  10. It was never “Apple’s plan” to make a cheap phone, nor was there ever any consumer demand for it. It was pressure from WS and banks that got Apple into “cheap” products. This happens to every company that makes above-average products. I so wish anti-Apple pundits on the street would just STFU. There’s little doubt in my mind that, without the incessant yammering against Apple, its share prices would have easily surpassed Google’s by now.

    All that being said, I think the 5C is a very cool entry-level device, even though I opted for the 5S.

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