Apple told its Taiwanese assemblers Pegatron Corp. and Hon Hai Precision Industry Co. that shipments of the iPhone 5C in the fourth quarter would be cut, the people said. Pegatron, which analysts say assembles two thirds of the iPhone 5Cs, was told orders would be cut by less than 20%, said a person familiar with the matter. Hon Hai, which assembles the remaining low-cost iPhones, was told orders would be cut by a third, said two people familiar with the matter.
Additionally, Apple reportedly informed one component supplier that it would cut orders by 50%, which could mean a slowdown in shipments or an inventory level reduction for assemblers.
The higher than expected price of the iPhone 5c is being blamed for slower than expected sales. Retailers in the U.S. have already dropped the price by $49 to $54 dollars. Gray channel prices in China have dropped by about 1000 yuan.