Is Apple iPhone 5c’s Demand Diminishing? Company Reportedly Cutting Handset Production In Half

Apple’s (NASDAQ:AAPL) not-so-cheap handset, the new iPhone 5c, is likely suffering from weaker-than-expected demand and forcing the company to consider scaling back its production significantly.

The iPhone 5c, which costs only $100 less than the iPhone 5s, was predicted by many to be unpopular on account of its pricing. And now, according to a report from Chinese website C Technology, Apple will cut production of the iPhone 5c in half -- from 300,000 to 150,000 units a day. However, Apple has neither announced sales numbers for the iPhone 5c nor confirmed rumors of the production cuts.

A recent report from Localytics, a mobile and web app analytics firm, showed that the iPhone 5s accounted for 1.05 percent of all iPhones in the U.S. within three days of being released to the public, while the iPhone 5c accounted for only 0.31 percent of the market, indicating that early adopters favored the high-end version of the handset.

According to CNET, the availability status of the iPhone 5c on Apple’s online retail store also lends some credibility to the C Technology report. On the company’s online retail store, the iPhone 5c is available to ship “within 24 hours,” while the iPhone 5s is listed with a vaguely estimated shipment time of “October.”

Meanwhile, China’s gray-market pricing for the iPhone 5c has also been falling as the device’s availability remains solid. The iPhone 5c’s official price in China is 4,448 Yuan ($726), while the same device costs 3,000 Yuan to 3,300 Yuan ($489-$539) in the gray market -- usually full of iPhones bought in the U.S., Europe and Hong-Kong, and illegally smuggled into the country -- which is 30 percent less than the official price, Unwired View reported.

Another report from Apple Insider, however, questions the reliability of the C Technology report, saying it is highly unlikely for Apple, which has “a wealth of customer demographic and sales data collected over decades of operation,” to make sales projections that could go so wrong and lead to a drastic cutback in production.