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Reports of cuts in iPhone 5c orders are no reason to panic

Serenity Caldwell | Oct. 17, 2013
The ones who should be overly concerned over this change are Hon Hai and Pegatron.

Now that the quarter has concluded—its financials are set to be delivered on October 28—the company probably has a better projection of how many iPhone units (and which models) it needs to fulfill demand. As such, a component adjustment of some sort seems like a no-brainer, especially with the holiday quarter kicking off.

Known unknowns
Yes, I'm sure Apple would have been happy if it were ordering as many iPhone 5c models as it projected to its suppliers. But keep in mind that we don't know just how many units the company ordered in the first place—and looking at Apple's incredibly high opening sales numbers, I'm inclined to think that unit number was far higher than it would have been for the continuing production of last year's model. (Especially considering the company's plan to roll out iPhone 5s and 5c models to more than 50 countries on October 25.) So if Apple hypothetically placed an order for 50 million iPhone 5c models and had to dock that by a third, that's still 35 million devices—8.1 million more than all iPhones sold in the year-ago quarter. And that wouldn't even account for iPhone 5s sales.

For now, though, all we can do is speculate until the October 28 financial call, where I wouldn't be surprised to hear more info from the company on supply chain changes during CFO Peter Oppenheimer's opening remarks or in response to analyst questions. In the meantime, don't worry yourself too much over high-level business transactions—the company is doing what it thinks is best to keep margins high and stock properly balanced.

 

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