updated 12:12 pm EST, Mon November 11, 2013
Supplier posts record revenues, but takes hit on profits
Asian supplier Pegatron is facing some financial trouble, allegedly due to cutbacks on iPhone 5c orders, according to Reuters and the Wall Street Journal. Both news agencies, quoting unnamed sources, say that the 5c has been selling relatively weakly compared to the 5s, supposedly prompting Apple to ask for fewer additional units. Apple has released general iPhone sales figures for the last quarter, but never distinguishes between models in any of its public data.
For Pegatron's third-quarter results, issued today, the iPhone 5c is said to have helped push Pegatron up to record revenues. The company posted less net profit than expected however, due to costs associating with spooling up production for the device. Pegatron handles some production of both the 5c and the iPad mini, although it could soon have help from Wistron and Compal.
Most iPhone sales are typically believed to be skewing towards Apple's flagship, the iPhone 5s, which has more advanced features and has been much more prone to sellouts and shipping delays. The iPhone 5c is essentially a replacement version of the iPhone 5, albeit with a polycarbonate back and a slightly higher-capacity battery. The company has been aggressively advertising the 5c, however, and some analysts believe the mix is closer to 50-50.
If the 5c follows tradition, its sales should be about the same or slightly higher than those of the 4S shortly after the iPhone 5 came out, since the 5c replaces the iPhone 5 as the company's midline offering. Unconfirmed stories about Apple suppliers should be "questioned" according to CEO Tim Cook, and such reports can sometimes be manufactured and "leaked" as part of an effort to manipulate the stock. The Journal in particular has been misled by some of its sources on Apple information in the past.