Current Production Cuts to the iPhone 5C are Understandable
It's being reported by the Wall St. Journal (WSJ) that Apple has notified two assemblers that they'll be reducing orders for the new iPhone 5C. However, the WSJ later notes in their report that "While Apple's Asian supply chain is widely interpreting the cuts as proof of slack demand for the iPhone 5C, component orders don't correlate directly with end demand. Apple has also previously cut component forecasts to suppliers over the past years."
In September we reported that "The holdup to the iPhone being released in China is a technical one at the moment as the carriers await new 4G licensing." This was in context to China Mobile finally introducing the iPhone models to their customer base.
Apple was apparently cranking up order volumes to meet the rise in orders from China Mobile coming on board earlier in the quarter, but the 4G auctions in wireless spectrum in China have delayed the debut of the iPhone on China Mobile's network. Therefore Apple cutting back orders for the iPhone 5C at this point in time is understandable. As the WSJ correctly noted "component orders don't correlate directly with end demand."
While we'll have to wait to hear from Apple's CEO Tim Cook to get greater clarity on this matter during their next financial conference on October 28, 2013, China Mobile's delay in launching iPhones on their networks is likely one of the key reasons behind the current iPhone 5C cutbacks.
Update Oct 17, 2013
We were informed today by an observant Patently Apple fan that the WSJ had removed one of their key lines in their report that we quoted: "While Apple's Asian supply chain is widely interpreting the cuts as proof of slack demand for the iPhone 5C, component orders don't correlate directly with end demand. Apple has also previously cut component forecasts to suppliers over the past years."
We quickly grabbed a screen shot from a Google search to show that it was in fact a part of their original report.
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Thanks Applefanboy for your comment. I've updated the report with a screenshot of a Google search of that quote and the WSJ popped up showing that it was originally a statement made in their report. Why they pulled it is no concern of mine. We quoted what they originally stated and that's the end to that story.
Cheers
Posted by: Jack Purcher | October 17, 2013 at 01:07 PM
I am pretty sure WSJ never said anything like that.
Posted by: applefanboy | October 17, 2013 at 07:32 AM