Apple throttles back iPhone 5c production by 35%, increases iPhone 5s production by 75%

“The diverging fates of Apple’s iPhone 5s and 5c have been widely reported, and our latest channel checks confirm that Apple indeed has cut back 5c production by 35% and increased 5s production by 75%,” Tina Teng and Shawn Lee report for DisplaySearch.

“The disappointing performance of the 5c can be attributed to two factors. First, Apple is a profit-driven company, and decided to raise their price in order to hit its profit target when Chinese carriers cut their subsidies on the iPhone 5c,” Teng and Lee write. “Second, the market’s expectation of what the iPhone 5c would be was very different from how Apple wants to position itself. It was not Apple’s intention to develop a product targeting the “low-cost” smartphone segment. However, rumors about iPhone 5c being ‘cheap’ were circulating as early as Q3 2012. The fact that the iPhone 5c is nearly identical to the iPhone 5 – and is not cheap – disappointed some consumers.”

Read more in the full article here.

MacDailyNews Take: Anyone, other than Tim Cook, Phil Schiller or Peter Oppenheimer, who calls iPhone 5c “disappointing” is an idiot. Nobody outside of those three has the data to make such a determination.

We’re going to make this so simple that even a Droid settler might be be able to understand:

Without knowing how many units Apple made prior to launch, you cannot infer anything – good or bad – based on limited “channel checks” of production orders at this point. You simply do not have enough data to gauge the success of iPhone 5c – or iPhone 5s for that matter.

The following numbers are made up. The actual numbers do not matter. They are for illustrative purposes only:

If Apple made 8 million 5c units upfront, sold 6 million in the first week, then adjusted future production based on that data and Apple also made 3 million 5s units upfront, but sold 3 million in stores and received 3 million online orders in the first week, then adjusted future production based on that data, which iPhone model sold the most units?

I would suggest it’s good to question the accuracy of any kind of rumor about build plans and also stress that even if a particular data point were factual it would be impossible to accurately interpret the data point as to what it meant for our overall business because the supply chain is very complex and we obviously have multiple sources for things, yields might vary, supply performance can vary. The beginning inventory positions can vary, I mean there is just an inordinate long list of things that would make any single data point not a great proxy for what’s going on.Apple CEO Tim Cook, Q113 conference call with analysts, January 23, 2013

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

38 Comments

  1. The iPhone 5C was DOA – dead on arrival. Too expensive and didn’t fulfil the simplicity of a two product lineup.

    Didn’t Steve Jobs reduce the number of desktop Mac lines to two, the iMac for consumers and the Mac Pro for professionals. He also streamlined the laptop line to two, the PowerBook for professionals and the iBook for consumers.

    Apple should have killed off the iPhone 4S and sold the 5C for $150 less than it does now. The only reason why the outdated 4S being kept alive is that Cook, the embalmer*, is no visionary, but a manufacturing expert bent on squeezing every last dollar from components manufacturing. This is the kind of Ballmerian vision that sank Microsoft.

    *Steve Ballmer’s follower.

    1. Jobs was firmly still in charge when Apple introduced the multi-generation line up for $100 increments. So that part of your Tim sucks premise is invalid.

      I do agree that they over priced it, but by $100. It would make the 5c tempting vs a 5s rather than the 5s being a no brainier.

      They should keep the 4s out there for those who want it cheaply.

    2. Have you forgotten that the original iPhone released by visionary Steve Jobs was widely criticized as being too expensive and was rapidly discounted by $100?

      I have to admit that expected Apple to discontinue the iPhone 4S and position the 5c to take its place. But expecting Apple to price the 5c $150 at its release is utterly ridiculous. In the absence of the 4s, I would have expected the 5c to be priced $50 lower at its release.

      I suspect that the 5c will drop by $100 next year when the 6 is released.

    3. BS.. If any of the Cell providers numbers are correct that they have reported, then the 5c is a great success. Of course its not going to sell like the 5s initially, but if the ratio being quoted in the press is correct 27% of 9 million (2,430,000 units) first weekend units sold, is a huge success for a phone with last years guts in it. And it is outselling the 4s’s numbers when it was the number 2 phone with the 5.
      Keep in mind it is the number 2 selling phone on 2 providers and the number 3 on the other two major providers. It even beat out the GS4 on two of the providers which had been on sale for longer in that particular quarter (the 5c was only on sale 10 days in that survey).

      1. yeah my only issue with the 5C is the Easter egg pastel colors. If they made them the colors of the iPod nano 4th or 5th generation, i wouldn’t find them so horrifyingly ugly.

    4. The iPhone 5C was DOA – dead on arrival.

      You’re an idiot. I’m just mentioning this because idiots are usually incapable of perceiving their own idiocy.

      -jcr

    5. The main problem with Apple under Cook is that Cook has given me absolutely NO reason to upgrade products.

      I bought the iPad 3 under Cook, solely because it had the higher resolution screen; still it was noticeably heavier than the iPad 2 and ran much hotter.

      Why in the world would anyone upgrade from an iPad 3 to a 4? They are virtually the same machine only the 4 has an unnoticeably faster chipset. Still, you would spend another couple hundred bucks re-buying all your iPad accessories or spring for lightning adapters.

      Same thing when the 5 comes out. I’m not going to upgrade just because the new case looks like the iPad mini.

      Why would I upgrade my 5 to a 5S?

      From what I hear the fingerprint sensor sucks and again the chipset is unnoticeably faster.

      That’s the difference between Jobs and Cook. With Jobs you eagerly waited for the next product iteration. With Cook it’s always the same ‘ol same ol’ but with a caveat that’s not in your favor!

      1. Although I agree with your assertion that the ipad 3 to ipad 4 was a minor upgrade, all your other points are kind of ridiculous. First off, you have no clue what the ipad 5 will have in store for it, and if your going off rumors you are leaving off 64 bit processor and fingerprint sensor…which are going to provide some great improvement to the ipad.

        And most iphone buyers don’t upgrade every cycle because that would mean they have to spend a lot of extra money cause the phone company won’t subsidize that. So, to hear you say you won’t upgrade to a 5s, pretty much everyone iphone 5 owner is doing the same, and it has been that way ever since the iphone 3s came out, which was when Jobs was still alive and calling shots.

        And from what you hear the fingerprint sensor sucks, well my experience so far has been extremely swell! And have you ignored any benchmark that has been released on the new chipset? It’s 2 times faster than the 5. So I dont know what you have been hearing, but its from a source that either doesn’t like apple or they don’t know how any of this stuff works.

        1. I have absolutely NO need for a fingerprint sensor on my iPad, as I mostly use it at home because it’s WIFI only; hell, I even have the password unlock turned off.

          Being a tech guy, 64-bit may mean something in the future when apps are actually taking advantage of the architecture, but today it’s just a marketing selling point.

          As for the iPhone 5S, a gold color option is simply not enough for me to abandon my perfectly working iPhone 5.

          I would never use the fingerprint sensor just like I never use the one on my laptop. I don’t use my phone for taking fancy pictures. And if the iPhone 5S is actually significantly faster than the 5 then that’s overkill… really, how much faster can I open Flipboard on my iPhone and do I really care!

          My point being that SJ always had me reaching in my pocket with a smile on my face. Tim Cook bores me and frequently leaves me shaking my head in utter disbelief. Now honestly, tell me I’m not the only one.

          1. “My point being that SJ always had me reaching in my pocket with a smile on my face.”

            Did you really upgrade your every desktop Mac, MacBook and iPod to the new model year? If not, it must have been terrible that SJ was boring you so much on those established but regularly improving products. Terrible that he did that to you.

            And now Cook is doing the same thing with the now well-established but still annually improved iPhone. Only twice as fast this year and first with well baked fingerprint technology. Better write Mr. Cook a letter, as otherwise he won’t recognize his grievous error due to the distracting and deafening sound of happy 5S customers, like me.

            If you are unhappy with your phone upgrade or get an Android or Windows phone. If your existing iPhone is doing the job you need it to, stop fantasizing about rapture phones every year and appreciate the good value you got when you bought it.

      2. “Why would I upgrade my 5 to a 5S?

        From what I hear the fingerprint sensor sucks and again the chipset is unnoticeably faster.”

        If you’ve heard that the 5S is “unnoticeably faster” than the 5, you are hearing wrong. I have yet to read any analysis of the 5S that indicates anything other than the 5S being significantly faster.

        While this may not be germane to you, the photography capabilities of the 5S are also a significant upgrade. Since photography is one of the most popular features of smartphones, Apple has focused on improving this capability with each update.

        The only thing that is keeping me from upgrading is that my service provider contract.

        “That’s the difference between Jobs and Cook. With Jobs you eagerly waited for the next product iteration.”

        So, 3 to 3S and 4 to 4S were different from 5 to 5S? Fucking bullshit. You are not even trying. Assholes like you were bitching about Jobs then just like you are bitching about Cook now. Fuck off.

        1. Received two 64 GB space grey 5S’s last Wednesday and Thursday. One from the Apple online store and the other from the AT&T store (delivered). Surprisingly the AT&T store delivered faster. Ordered it on Friday (11th) and it was delivered the next Wednesday(16th). Ordered from the Apple online store on Monday (7th) and it was delivered last Thursday (17th). Fingerprint sensor works as advertised. Simple and efficient. I don’t like iOS 7 but I don’t have any choice. Hopefully I will be able to modify it going forward visually as the washed out look does nothing for me. Battery life seems to be about the same. The phone is faster than my 4S. Received $210 as a trade-in for one of my old 64 gig iPhone 4S’s at the AT&T store. The Apple store told me that the moisture sensor in one of my phones was tripped. Hmmmmm. So it went to the AT&T store. Got more for it than I would have at the Apple store anyway. Overall I am happy with the phone. Obviously it’s quicker and I expect the 64-bit processor to make things work well for the next two years. Actually one year. Because I’ll be one of the first to order the iPhone 6’s when they come out. I’m simply one of the millions who would like a little larger phone. But I expect my 5S’s to serve me well. I don’t like iOS 7. I have a fast learning curve so I don’t expect my opinion to change over the course of the next year. I prefer the day today functionality of iOS 6. And I certainly do not like the look of iOS 7. That’s my honest opinion. Different strokes for different folks. I wouldn’t consider using anything but an iPhone. The phones work flawlessly. Life is good.

  2. My friend bought the 5c in Blue and loves it – especially the quality and hand feel. I own a 5 and a Gnote 3 and I can see both have benefits and trade offs. I would love to see a 5 inch + 5c next year with 5s internals. A lot of people love the look of the 5c but they want the new tech thats in the 5s.

    1. Yes the doomsayers here obviously have never handled or seen a 5C up close. My daughter has one and I was a bit shocked it was so much better than I expected. A totally solid well made device. It does have it’s place in Apple’s lineup despite what would be Apple Kings are saying here.

  3. The 5C is built for the long-tail. It’ll be around for the next 3-4 years. At a savings of 10-20 dollars per unit multiplied by tens of millions, that’s a lot of extra money.

    1. You are right. The 5c will have its R&D costs paid off long before the Christmas blowout.

      In January the 5c will be selling $200 less than the 5s with the same data storage and it will sell like hotcakes.

      Its all good.

  4. I figure the reason apple wanted to make the 5c was because there was people still buying the older model iPhones, and I think apple saw an opportunity. Instead of people buying an old iPhone, let’s give them something new for the same price, and in color! I was hesitant when I saw the 5c, but if I was the type of person that usually bought the older models, what would I rather buy; older iPhone or a iPhone 5c? I would rather get the 5c. That only legitamizes the existence for the 5c for me.

    1. I was in Best Buy yesterday and saw a lady buying two iPhone 4S’s. So unbelievably there is still a market for that phone. Just for grins I asked if they had any 64 GB 5S’s? They had one. Space grey.

  5. This is all assuming that the 5C was made for the American market primarily. I don’t believe that it was. Of all the markets it was made for, asian seems most likely. Japan, China, and possibly India. Who cares about the US market for the 5C. They were going to go for the 5S from the get go.

  6. I don’t get these self-claimed Apple business experts. When Apple doesn’t cut prices, they claims its products are too expensive. When Apple cut prices like iPad mini, they fear diminishing margins. The fact that Apple is growing and making the most money is hardly ever mentioned. WHY?

  7. Sorry to see things different.
    If I want plastic-crap, I’ll buy Samsung or Nexus but not a totally overpriced 5c. If they need something for children, it should be much cheaper , nearly half the price with entry level cpu etc.
    Apple should trash this kind of 5c and give us an 4s with lightning and upgraded cpu .
    I will upgrade from 4 to 4s soon.
    But 4s 8GB is a joke. Another mistake from Apple.

    1. You are of course aware that Apple deliberately crafts its product portfolio to capture the world’s high value segments while simultaneously push whiney cheapskates into the android ecosystem.

      1. I am aware that things are not necessarily a cuestion of price.
        But the 5c is more or less a 5 with plastic case.
        Personally, I will never buy “high value” devices in plastic.
        Just that can never be high value, because reason of plastic is
        cheap manufacturing.
        Does anyone buy “high value” watches in plastic?
        If we get the finest smartphone on earth for 20% more, why should anyone buy outdated tech in plastic cases?
        Cause they are colored?
        I imagine, in 3-4 years you can throw them directly into the trashcan, cause noone wants them.
        If they would drop 5c prices 100 dollars, I still would choose a 4s/16. Sure, tech data is 2 years old, but it is seriously a high value crafted device. But to be able to apreciate this, we need to see the differences.
        I never look for Android, but I can not accept this way of manufacturing, less for that price.

  8. Ramping down production of the 5C by 35% because of the need to ramp up the higher margin 5S by 75% is the opposite of disappointment. How can this possibly be difficult to comprehend?

  9. Thank you for the sage perspective.

    The most dubious aspect of all pundit analyses is the consistent belief they understand not just what’s going on, or even what is or was expected (both are folly as this article points out), but that they understand WHY Apple does what it does. Huh? What a joke!

    Apple is none other than an enigma to all but a very select few. Pundits’ theories that the 5c was envisioned ‘as a way to expand market,’ or ‘to reduce price points,’ etc, aren’t just merely wrong … They’re likely a red herring!

    By producing the 5c Apple has achieved three incredible goals that have gone unreported heretofore. First, they created a lower-production-cost, faster ramp-up version of the iPhone 5 to sell to those 25% of buyers wanting last year’s product. Second, they freed up valuable and limited (shell) production capacity needed for the 5s (and other products?). And third, they did really create a whole new set of reasons to select iPhone. Ok I can actually envision about a dozen more reasons for the 5c but … Really I’m not one of the elite few who can do any more than theorize.

    A new marketing message. A new mass of noise with which to fill the airwaves until they, expectedly or unexpectedly, change the world again in ways too simple for any of us to anticipate.

  10. Apple was not wrong on production of the 5c… got mine free with Sprint contract in 4 business days.
    Apple underestimated 5s desires bigtime or was late getting production rolling…my wife’s gold one came for $99 Sprint with contract in 27 days. 5s is noticeable lighter than 5c…can’t see any gold after case…color is really not important…ring around the home button is only giveaway.

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