I am not sure what did Apple expect from iPhone 5C, but it is certainly performing worse than expected. A month ago we told you about the production cuts and declining grey market prices for the younger iPhone model in China. And things are not improving with time.
C Technology, who was the first to report iPhone 5C production cuts, says that Apple still continues to reduce orders for its contract manufacturers and suppliers. Protek has seen its 5C component orders cut by 75%, while Foxconn’s Zhengzhou factory with the ability to make 50 000 devices a week, is now churning out only 8 to 9K units every seven days.
iPhone 5C production volumes got so low, there’s rampant speculation in China that Apple will discontinue iPhone 5C outright. C Tech’s sources who have seen Apple’s production plans for 2014 say that is not the case- Apple will continue to make iPhone 5C well into next year, albeit in much lower quantities than initially planned.
Things on the street in China aren’t looking good for iPhone 5C, too. Electronics retailer Dixons says that 78.6% their iPhone sales are 5S vs only 21.4% of 5C. That’s 3.68:1 ratio in favor of iPhone 5S.
A quick check of grey market imports on Taobao also shows that iPhone 5C prices continue to fall. A month ago, 5Cs smuggled from Hong-Kong went for for 3000-3500 Yuan on Chinese online market . Today, offers in 2500 to 3000 Yuan ($410-492) range dominate the place, with some going as low as 2300.
Grey market resellers are now offering iPhone 5C at a significant loss, just to clear the stale inventories, and still can find only very few buyers.
However, in the great scheme of things, it does not matter how bad iPhone 5C is performing in China or anywhere else. Smashing success of iPhone 5S more than compensates any issues with 5C, and will probably increase Apple’s profitability in the short term.
And in the long term, iPhone 5C may still find its place in Apple’s product portfolio next year, when they retire iPhone 4S and cut 5C price by another $100.