Apple cuts more iPhone 5C orders as its price drops another 20% on Taobao, and 5S vaults to 78% of China sales

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 Apple still continues to reduce orders for its contract manufacturers and suppliers. Protek (Pegatron) has seen its 5C orders cut by 75%, from 320K a day in October to 80K now, while Foxconn’s Zhengzhou factory is now churning out no more than 50K devices a week.

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.

iPhone 5C Taobao November

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.

Author: Stasys Bielinis

While I like to play with the latest gadgets, I am even more interested in broad technology trends. With mobile now taking over the world - following the latest technology news, looking for insights, sharing and discussing them with passionate audience - it's hard to imagine a better place for me to be. You can find me on Twitter as @UVStaska'

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  • RogerMercer

    With Apple selling far more iPhone 5s than anticipated and far fewer of the lower-margin 5C, the company’s margins are zooming and their profits will be far higher than expected, though market share will be lower. Who cares? I want profits, and more income from my Apple stock. An I want Apple to get bigger and richer. That’s what is happening here, so I am pleased

  • jameskatt

    The Chinese LOVE the more expensive iPhone 5s – particularly in GOLD. Whoever said that the Chinese want a cheaper iPhone is stupid. The Chinese Affluent are only 3 % of the world’s population but consume 30% of the world’s luxury goods. The Chinese only want THE BEST AND WILL PAY FOR THE BEST- the iPhone 5s. It is shameful to them to have to use a cheaper phone like a Samsung phone.

  • Tonio Loewald

    How well is the 5C selling relative to the 5S when compared to the 4S vs. the 5 a year ago? That’s the comparison that counts because the 5C is occupying that position and (supposedly) is a higher margin product than the 5 would be at the same price.