Rumor: Major Apple Supplier Halts iPhone 5C Production

Source: Apple.com

Is Apple’s (NASDAQ:AAPL) iPhone 5C a flop? Major Apple supplier Hon Hai Precision Industry will halt production of the iPhone 5C at one of its facilities in northern China, according to an unnamed industry source cited by DigiTimes. According to Apple’s supplier list, the factory is located in Zhengzhou, Henan province. Hon Hai Precision Industry, also called Foxconn, is a well-known manufacturer of Apple’s iPad and iPhone products.

The news comes approximately a month after sources at Hon Hai told the Wall Street Journal that Apple was reducing its iPhone 5C orders by over 30 percent. Meanwhile Pegatron, another major assembler of the iPhone 5C, was told that its orders were being cut by less than 20 percent. Another unnamed iPhone 5C component supplier also told the Wall Street Journal that its orders were being cut by 50 percent.

According to DigiTimes, Foxconn accounted for 30 percent of Apple’s iPhone 5C production, while Pegatron obtained the remaining 70 percent of orders. The DigiTimes claimed that the production cuts are due to “unsatisfactory sales” of the iPhone 5C. However, it should also be noted that the Taipei-based DigiTimes has a mixed record of success when it comes to the accuracy of its industry rumors.

In fact, China’s Ctech website recently dismissed Digitimes’ report that the Zhengzhou factory has completely stopped its iPhone 5C production and instead claimed that Foxconn has only drastically reduced its iPhone 5C production. According to Ctech, Foxconn now has a “meager” output of 8,000 to 9,000 iPhone 5C units a day, or approximately 50,000 units a week.

Apple released two new iPhone models simultaneously for the first time this year. The iPhone 5S is the flagship model and features a new 64-bit A7 processor and a Touch ID fingerprint scanner. The lower-cost iPhone 5C is a plastic-backed model that is available in a variety of bright colors. Although Apple has not revealed how many of each iPhone model it has sold, many industry watchers believe that the iPhone 5S is vastly outselling the iPhone 5C.

Apple reported that it sold 33.8 million iPhones in the September quarter. Recent data from mobile app analytics firm Localytics showed that Apple’s iPhone 5S accounted for 3.8 percent of the total active iPhones in the worldwide market. In contrast, the iPhone 5C only accounted for a 1.7 percent share. However, Canaccord Genuity analyst Mike Walkley recently predicted “strong sales” for the iPhone 5S and “steady iPhone 5C sales” for the upcoming holiday shopping season.

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