Apple's new iPhones: The good, the bad, the ugly

The company is reportedly stepping up production of the popular iPhone 5s model, while cutting iPhone 5c orders. But the rumor mill can be a vicious, ugly place.

By TheStreet.com Staff Oct 16, 2013 11:54AM

iPhone 5C's at the Apple store in Palo Alto on Sept. 20, 2013 (copyright ZUMA/REX Features)By Chris Ciaccia

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NEW YORK (TheStreet) -- It's no secret that Apple's (AAPL) new iPhone models -- the iPhone 5s and iPhone 5c -- are popular, judging by first weekend sales. It's still up for serious debate, however, which of the two is more popular, going by industry reports.


Citing people familiar with the situation, The Wall Street Journal reports Apple has notified two of its production assemblers, Pegatron and Hon Hai Precision, that it is reducing orders for the iPhone 5c for the fourth quarter, as questions come into play about weak demand for the phone. At the same time, however, Apple is raising production orders from Hon Hai for the iPhone 5s, due to the popularity of the device.


Pegatron was reportedly told to cut orders by up to 20 percent for the iPhone 5c, while Hon Hai was told to cut orders by up to one third, The Journal noted. Additionally, one component supplier was notified of a 50 percent cut in iPhone 5c orders.


Apple could not be reached for comment on this story.


This isn't the first time we've heard rumors of an Apple cut to the iPhone 5c. Retailers such as Wal-Mart (WMT) and Target (TGT) have cut the price of the 5c, with Wal-Mart going as low as $45 for the 5c. Target has it for $49.99 on its website, though it's unclear whether it's Apple or the retailers themselves who are taking the profit squeeze on the iPhone 5c.


Taking a look at Apple's website, the iPhone 5s is still back ordered. All models of the champagne gold, space gray and silver models have an availability date of 2 to 3 weeks. Conversely, the iPhone 5c is ready to ship within 24 hours.


Apple's supply chain is extremely complex, and CEO Tim Cook has said in the past that it's good to question any rumor around the tech giant's build plans. Speaking on Apple's fiscal first-quarter earnings call, Cook addressed the chatter that constantly swirls around the iPhone maker. "I suggest it's good to question the accuracy of any kind of rumor about build plans. Even if a particular data point were factual, it would be impossible to interpret that data point as to what it meant to our business. The supply chain is very complex and we have multiple sources for things. Yields can vary, supplier performance can vary. There is an inordinate long list of things that can make any single data point not a great proxy for what is going on."


It's abundantly clear that the iPhone 5s is selling well, despite being $100 more expensive than the 5c. The 5s offers the new A7 64-bit chip, as well as the M7 motion sensor chip, TouchID fingerprint sensor, and an enhanced iSight camera. The gold version of the iPhone 5s has become very difficult to find, despite Apple reportedly increasing purchase orders from its manufacturing partners.


The 5c is largely the same as the iPhone 5 internally, except it has an "unapologetically plastic" casing, coming in five colors.


Apple is slated to report fiscal fourth-quarter earnings on Oct. 28, with the consensus estimate from Thomson Reuters calling for the Cupertino, Calif.-based firm to earn $7.88 a share on $36.76 billion in revenue. There has not been a cut to consensus estimates for fiscal fourth-quarter earnings in the past week. Apple is expected to earn $13.80 a share on $55.44 billion in the all-important holiday season, so if the iPhone 5c order cuts are true, which I place a great deal of skepticism on, it will likely be seen in these estimates.


The rumor mill is a vicious, ugly place, and it's difficult to read too much into one supplier or manufacturing partners. Given that the iPhone 5s is selling exceptionally well, shareholders likely shouldn't worry too much -- the 5s probably has higher margins than the iPhone 5 did, since it's using the same body.


Even if the 5c isn't selling as well as Apple hoped.


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135Comments
Oct 16, 2013 12:46PM
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Let me know when you have some actual facts.
Oct 16, 2013 4:13PM
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Apple mistakenly thought people more people would buy iPhones if they made a cheaper plastic one.  Mainly because of people crying that apple is overpriced.  Apple was wrong, people who buy apple phones don't want a cheaper priced plastic phone.  They want glass and metal.  
Oct 16, 2013 1:54PM
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I think I'll stick with my Samsung....... works for me. 
Oct 16, 2013 4:07PM
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Are they still using that inferior glass that cracks if you look at it wrong?
Oct 16, 2013 5:50PM
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Two years ago i had an htc phone with gorilla glass and it fell out of my pocket out the window while cleaning the out side window on the 4th floor the battery cover popped off and the battery came out, but i put it back in and turned it on the screen was not cracked and worked perfectly like it was never dropped. Damn good phone to be able to work and not crack from a 4 story fall.
Oct 16, 2013 7:50PM
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Everyone has such strong emotional attatchments to the Apple vs. Samsung debate. I've been on both sides. Had the first Galaxy...it was awful. Slow to the touch, froze all the time, was too big for the hand. Switched to something different. Now I have an iPhone 5 and I really like it, probably won't go back to Samsung. But really, if either stopped existing, I wouldn't take up arms for it or anything.

 

Everyone just needs to calm down, they're PHONES. Are you going to get this upset because the person you go out to dinner with doesn't like onions and you do?

Oct 16, 2013 3:36PM
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I have a Galaxy S3 right now. I can't upgrade until November of next year. Honestly don't know if I'll stick with the Galaxy S series (they might have the S5 by then) or go to Apple.
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Kind of pricey, many phones that work just as well, cost about a third.

Oct 16, 2013 7:30PM
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I work at a phone store and honestly people are obsessed with Apple, I mean I don't get the people who buy it "cause its Apple" they're not too bright to buy a product by name alone, HOWEVER, if someone buys Apple and has legit reasons to like the product why is it such a big deal? I don't get why so many people bash people who like Apple..makes no sense to me
Oct 16, 2013 4:49PM
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I had an iPhone 5 and was pretty happy with it...but I thought it was a little too "precious" in that I always was concerned about breaking it or carrying around an expensive piece of gear (had my iPhone 4 stolen at gunpoint...no fun).

Anyway...when my iPhone 5 contract was up I was able to flip it for $250 and buy the iPhone 5c for $99 and pocket the difference. Same phone...less fancy/fragile feeling...$150 in my pocket. Not bad.

Oct 16, 2013 5:18PM
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I had an iphone 5s it broke in a matter of hrs. The battery only lasted maybe 2 hrs on a full over night charge. The volume buttons stuck the power button also stuck it was pure junk. Took it back to at&t and got my money back and bought the Samsung s4 and i get 4 days worth of use out of it on a full charge. The phone is 100 times faster with its quad core cpu and the 2 gigs of ram and 64 gb of internal storage with the option of adding another 64 gb sd card. It can Play every video file out there where i had to convert all my vidoes to stupid quicktime to play on the iphone waste of time doing that. With the samsung i just copy over my avi's mpeg's or my webm files and go and watch no converting needed. It got a 5.5 inch screen 100 times bigger then the iphone i had to strain my eyes to read the iphone and it wont work right if you got lights on as it is to much glare on the iphones screen i had to goto a completely dark room to be able to read what was on the iphone screen the screen was that dim even with full brightness turned all the up to max. So over all the samsung won me over not only in better features but way better hardware and i love that i can record in 1080p 1920x1080 with the 15 megapixal camera front and back where the iphone 5s only allows 720p recording.
Oct 16, 2013 6:12PM
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Who cares what I think...I got a 5c I like it and I don't care if you you do or not...it's your life if u want to waste it on meaningless bashing go ahead
Oct 16, 2013 5:52PM
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Iphones would be a great product, if it was more affordable. The price is ridiculous for an electronic device that costs no more than $40 to manufacture. Just paying for a name.
Oct 16, 2013 9:42PM
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My wife & I have I-phone 4, 16mb (got them for free from nephew & his wife because they were upgrading).  They do what we want them to do, make a phone call, text, occasionally go on the web, and occasionally take a pic.  We both use Lifeproof cases so we don't have issues.  We don't have an unlimited plan & don't want to waste the money for one.  The I-phone 4 serve their purpose and we are satisfied.  If we had gotten Samsung's for free and they worked & did what we needed, then we would be satisfied.  Only thing I wish Apple would do is allow the use of additional memory cards, instead of ripping people off for additional memory.  I think all phone manufacturers need to work on battery life between charges.  We are not those people who make their phone their life, are always plugged in, and don't know what is going on around them and in this country.    
Oct 16, 2013 4:07PM
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Yeah! Deficit, deficit, deficit, jobs, jobs, jobs but you love your I-phone. Steve may be a hero to investors but not to American workers in my eyes.
Oct 16, 2013 4:51PM
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Step right up and trade your Apple iPhone 5 from 2007 for a brand new iPhone 5S, also from 2007. Really apple sheep, when are you going to realize that there are so many phones on the market that are far superior to the iPhone.

 

A week ago I was with a friend trying to find a house, he was lost. He whipped out his iPhone that his job provided and we could still not find the house that we were within 2 blocks of. My HTC had us navigated in seconds, right to the correct house. I was impressed though that the iPhone didn't take us onto some active runway, or off a pier.

 

 

 

Oct 17, 2013 8:37AM
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I don't mind paying more for a well built phone, I just traded my 4 in for the 5s and I got $120 because of the great shape I kept it in. Before I had the 4 I had an incredible and it broke in a year...as for my iphone 4 I had it for 4 years with no problems. Say what you want, the proof is in the pudding.
Oct 16, 2013 3:14PM
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LOL. Apple fanboys and fangirls unite so Apple can continue to produce its overpriced, mediocre products. Samsung products are far superior to anything Apple produces.
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