Apple is reducing the production of the iPhone 5C and tech outlets are reporting it is due to the lack of demand. For many anxious months consumers expected the C to stand for Cost savings, Colors but now it seems to stand for Cost-heavy. While the iPhone 5C is $99.99 on a 2-year contract, the no contract price is a mere $100 less than its powerhouse big brother, the iPhone 5S. The cut in production is really not such a big surprise.
Since its pre-order release on September 13, consumers hit the Apple stores and carrier websites to demand the iPhone 5S. Carriers and even Apple had to turn customers away to come back on September 20 for the iPhone 5S. Once the 20th came around, lines created severe shortages of the iPhone 5S. Gold sold out quickly and continues to be delayed in shipping. In the meantime, iPhone 5C continues to fill the shelves, as retailers look to reduce the price down to $49.99 resulting in a minimal increase in sales.
While the slowing of production appears to the public as a loss, it actually works in the favor of investors. The greater surprise is the demand for the iPhone 5S which marks a higher end product as a success. The iPhone 5C not resulting in big sales means consumers are willing to pay more for advanced products, acknowledging a win for future devices for Apple. It is unlikely at this point, Apple will consider releasing two additional iPhone devices side by side based on the results from the newest iPhone sales.
Two of the manufacturers tapped by Apple to slow production is Pegatron Corporation and Hon Hai Precision Industry Company. Pegatron is reported as slowing production by 20 percent and the Hon Hai company by 30 percent including component pieces by 50 percent. It was also Pegatron earlier in the year that came under fire from China Labor Groups for placing their workers through unsafe and unfair working environments.
For fans of the iPhone 5S, Apple is reportedly ramping up production of the Gold color to appease the consumer demand. Many seekers are looking to market places like e-Bay where Gold iPhone 5S’ are being sold in excess of $1,500. With the news of the slowed production of the iPhone 5C and growth for iPhone 5S the market delivered a pleasant surprise; Apple’s shares rose Wednesday morning reaching a high for the first time in a month. It seems relenting on production actually created a promise of hope for investors.
In addition, Apple has released their invitations for their event scheduled for October 22. Listed below is the invite that teases about having a lot more to cover. The event will reportedly cover the introduction of the two iPads; iPad 5 and the streamlined iPad mini 2. The devices are slated to release sometime this month and tout thinner and sleeker frames. The iPad mini 2 will reportedly sport the TouchID and both devices may have the 64-bit, M7 chip.
Apple is not calling the iPhone 5C a mistake and admitting to such a thing can hurt its brand. Overall, consumers were disappointed in the no contract price of the iPhone 5C. Many were expecting a cost of $350 or less for purchase. Instead, the price of no contract nearly matches the more advanced 5S version. There could be many reasons behind why Apple decided to slow the production on the iPhone 5C but none of it would be surprising.