It has been rumored a number of times that Apple has cut iPhone 5C production. The move is believed to be the reason behind Pegatron’s disappointing profits.
Apple’s primary manufacturer for the iPhone has almost always been Foxconn. However, the company tapped Pegatron as a secondary manufacturer to build the iPhone 5C as well as the iPad mini. Today Pegatron reported its third quarter net profit which was below market expectations. Costs associated with iPhone 5C production and the subsequent cut in production are believed to be behind this.
According to various reports that followed soon after the earnings announcement, Apple has reportedly cut iPhone 5C production due to “weak sales” of the plastic iPhone ever since it was launched back in September. Another report also says that there have been “order cutbacks” for the iPhone 5C due to “less-than-stellar sales.” Apple hasn’t given any official sales figures as yet, but the consensus among analysts and various media outlets seems to be that the iPhone 5C isn’t performing well in the market.
While production cuts have been rumored before, its possible that order revisions might have played a role in Pegatron missing expected net profits. Only recently it was rumored that Apple is tapping new suppliers based in Taiwan to build the iPhone 5C and iPad mini. Perhaps that just might be another explanation for this.