Apple Inc. (NASDAQ:AAPL) is cutting the production of the iPhone 5C thanks to a slow-down in sales. An analyst report from Credit Suisse’s Thompson indicates Apple Inc. (NASDAQ:AAPL) has been downgraded to Neutral after the launch of the iPhone 5S and iPhone 5S. The analysis team also trimmed down CY2014E iPhone shipments by about 11%. The reason for this is because of the concern that iPhone 5C pricing was too expensive to be adopted by the mainstream. Surprisingly, the more expensive iPhone 5S is faring better in terms of sales.
Apple replacing iPhone 5C producer
Thompson also noted that it’s not likely Apple Inc. (NASDAQ:AAPL) will replace Pegatron Corporation (TPE:4938) (OTCMKTS:PGTRF) or use Compal Electronics, Inc. (TPE:2324) (OTCMKTS:CMPFF) to produce the iPhone 5C. He does predict that Compal will take over production for the iPhone 5S in 2014. He also thinks Apple Inc. (NASDAQ:AAPL) will adjust the iPhone 5C production during the final quarter of this year and this will result in cuts on Pegatron orders.
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iPhone 5S vs iPhone 5C
It’s evident the iPhone 5C can’t compare to the iPhone 5S. A recent survey from Consumer Intelligence Research Partners shows the 5S has been outselling the 5C two-to-one since last month when both devices launched in stores. Results show the iPhone 5S make up 64% of iPhone sales, whereas the 5C makes up 27%. MacRumors explains, “A 2-to-1 lead for the iPhone 5s over the iPhone 5c would appear to mark a decline from the launch weekend of September 20, when analytics firm Localytics saw the ratio at closer to 3.5-to-1 by tracking the new devices showing up on its network. At the time, we noted that the gap would likely narrow over time as the launch weekend focused on early adopters buying the higher-end iPhone 5s models that were in short supply, while over the longer term the iPhone 5c would more likely hold appeal for mainstream customers updating when their current contracts run out, and that dynamic appears to already be playing out in the weeks following the launch.”
Apple Inc. (NASDAQ:AAPL) fans prefer to spend more money on a more upscale device and it’s evident that plastic devices won’t win any points.