Apple has discontinued production of the iPhone 5C at Foxconn Electronics factories, one of its two suppliers, so they can focus on making the iPhone 5S, according to DigiTimes.
Apple Inc. has been scaling back production on the cheaper phone for weeks now. It reduced the number of orders from both the Zhengzhou, China-based Foxconn (Hon Hai Precision Industry) and Taiwan-based Pegatron Technology.
According to analysts, Pegatron and Foxconn received 70 and 30 percent of the iPhone 5C orders initially. Last month Pegatron’s orders were cut from 320,000 units daily to 80,000, while Foxconn was producing 8,000–9,000 daily.
The iPhone 5S has been outpacing the iPhone 5C in sales by three times, according to data from analytics firm Fiksu. Since the launch, retail stores have had shortages of the iPhone 5S, while supply of the iPhone 5C was always on hand.
According to Reuters, an executive at Foxconn said they stopped hiring additional workers because of the reduced iPhone 5C orders.
Market Share
The cheaper iPhone 5C was launched to sell mostly in emerging markets worldwide, but according to recent Gartner data, Apple’s global market share is decreasing. Apple is still very strong in the United States, but its worldwide sales grew at half the rate of the global market in the third quarter.
Samsung Electronics Co. Ltd.’s sales increased 46 percent, and Apple’s increased 23 percent, while the worldwide market grew 46 percent.
While Apple still makes more money per phone than other device makers, critics say they may lose developers to other platforms if they keep on losing share.
Nearly 80 percent of all smartphones, 60 percent of tablets, and 60 percent of all new computing devices run Google Inc.’s Android. Samsung, too, is planning to launch its own operating system Tizen on more devices in the near future and has been courting developers.
While the demand for the iPhone 5C was weaker than expected, consumers still see Apple as a high-end brand, and iPhone 5S sales aren’t falling, said IHS analyst Wayne Lam. And unless 5S sales start to drop, it won’t be a problem for Apple, which makes close to $600 per phone, he said.
“Apple doesn’t play in the low end,” Lam said. And the iPhone 5C, which comes close to $500 unlocked, isn’t exactly cheap compared to other “low-end” phones.
“[iPhone 5C] is just a defensible product, creating a moat around their core business,” Lam said. Lam added it was unlikely they would discontinue production completely.
