Analysis: Reports of cuts in iPhone 5c orders are no reason to panic
According to a report from The Wall Street Journal on Wednesday, Apple has cut iPhone 5c orders from assemblers and component partners by up to 50 percent, while increasing orders for the 5s. But don’t go shouting “Apple’s plastic iPhone is doomed” off the rooftops just yet—this is fairly normal behavior from our friends in Cupertino.
The Journal’s article is an interesting read; if you’re really interested in the complexities of component shipping, take a few minutes to glance it over. For those of you who don’t have the time or frame of mind to process a bunch of numbers and analyst quotes, here’s the skinny: Apple reputedly told two of its iPhone 5c suppliers, Pegatron and Hon Hai, that it planned to cut 5c holiday-quarter orders by less than 20 percent and one third respectively. The company also supposedly notified an unnamed component supplier that orders for 5c parts would be cut by 50 percent. At the same time, however, Apple has apparently increased orders for the iPhone 5s at Hon Hai.
These numbers are significant changes, to be sure. But while Hon Hai and Pegatron will likely take some losses from the reduction in Apple’s business, they’re the ones who should be overly concerned over this change—not Cupertino or its watchers.
No doom, no gloom
Why isn’t Apple doomed? Well, several reasons—nine million of them, in fact. Those iPhones sold over the launch weekend are a good starting point; so impressive were the sales that the company filed a form with the SEC stating that it was upping the revenue and gross margin forecast for its fourth fiscal quarter.
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