Weak Demand? Apple Reportedly Reduces iPhone 5c Orders

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The Wall Street Journal reports that Apple has asked the two companies it contracts with to produce iPhones — Hon Hai and Pegatron — to scale back on production of the iPhone 5c model.

This news comes from unnamed sources, so take it with a grain of salt. Pegatron was apparently ordered to cut production by less than a fifth, while Hon Hai was apparently told to cut production by a third.

It wouldn’t be incredibly out of the ordinary to scale back on production after an initial launch period winds down, but these reports of Apple scaling back production coupled with recent price cuts of the iPhone 5c have been, according to the Journal, “raising concerns about weaker-than-expected demand and its pricing strategy for the device.”

Apple Cuts iPhone 5C Orders [WSJ.com]


This story doesn't surprise me.

For 30 years (give or take), Apple has sold the snob factor.  "We charge you more for the experience," they say.

So what happens when the "experience" is cheaper to get?  People think Apple's selling junk now and don't like it.  It's to be expected when a company that's built up this incredible house of cards around the notion of paying more to get more when all of a sudden, you can get that experience without paying more.  Unfortunately, what you do pay for looks like crap, thus destroying the "experience" and undermining decades of marketing strategy.

Great job there, Apple.  You shot yourselves in the foot by trying to be something you're not marketed as being: An economical choice in cell phones.