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Apple reportedly cuts production of iPhone 5C as market opts for pricier 5S

Apple(s aapl) has reduced its fourth-quarter orders for the new iPhone 5C due to relatively weak demand, according to multiple reports. A poor pricing strategy probably has something to do with it.

The iPhone 5C is the colorful, plasticky — and comparatively outdated – counterpart to the fingerprint-scanning, metallic iPhone 5S. Launched at the same time in September, the two handsets have had divergent fortunes. According to a report this week, the 5S has been outselling the 5C by more than two to one.

Although the 5C is moderately cheaper than the 5S is — $549 for the unlocked 16GB 5C, compared with $649 for the equivalent 5S – it lacks the more expensive model’s fingerprint scanner and has a less capable camera and older (and fewer) processors. Essentially, it’s last year’s iPhone 5 in a colorful plastic shell.

Prior to its launch, the iPhone 5C had been seen as Apple’s great hope in China, where it doesn’t have the cachet it has in the west, largely because cheap and capable Android(s goog) phones rule the roost there. However, analysts had been hoping for much lower pricing than the flagship iPhone 5S, more around the $350 mark, and Apple didn’t deliver that.

Reports last week also suggested Apple was cutting production of the 5C, pointing to a drop in the handset’s Chinese gray-market price to well below the official price — as good an indicator of weak demand as you’re going to find.

It remains to be seen how the two models will fare against each other when they go on sale in 50 more countries in the next two weeks, but Apple itself is clearly acting on the market’s early preference for the iPhone 5S. Retailers appear to have already got that message — last week Best Buy(s bby) halved the contract price for the 5C a mere two weeks after it went on sale.

10 Responses to “Apple reportedly cuts production of iPhone 5C as market opts for pricier 5S”

  1. Whole iPhine 5c games from Apple is probably just a game to herd more buyers toward iPhone 5s. Think about it, C=cheap, yet with ridiculously high price, styling from 90th, weaker components, who in their right mid will opt for it?

  2. Bruce Mitchell

    Umm… seems like folks are overlooking something here. Yes, the 5s is proving the more popular model. That does not make the 5c a bust, especially considering that Apple is still selling millions upon millions of the 5c.

  3. hrpanjwani

    I think the 5c release was both a strategic mistake and a pricing mistake.

    1) Strategy: The 5c should not have been sold on contract but only as an unlocked phone, while the 5s should be sold both, on contract and unlocked. This would have allowed T-mobile and prepaid carriers to push the 5c sales in the US.

    2) Price: The unlocked 5c should cost at least $200 less than the corresponding 5. This would create demand and fend off the grey market to some extent.

  4. Can’t imagine anyone over 17 years old wanting one of those “colorful” 5c models. Even if it had the same innards as the 5s. As with iOS7, it’s a visual design mistake. Boy, I hope ugly goes out of fashion quick.

    • David Meyer

      Actually I asked Apple for confirmation before writing this article, even though doing so is always fruitless — this time was no exception. When reputable sources such as Dow Jones and the WSJ independently come up with the same story, it is worth reporting on.