Hon Hai to stop production of iPhone 5C

Apple Inc products supplier Hon Hai Precision Industry Co will cease production of iPhone 5C at its Central China factory since the model was too unpopular compared with the higher-end iPhone 5S, according to media reports published Wednesday.

Taiwan-headquartered Hon Hai Precision, which trades as Foxconn Technology Group, will stop producing the iPhone 5C in Zhengzhou, Central China's Henan Province, and use the capacity to manufacture the more profitable and popular iPhone 5S instead, Taiwan-based news portal digitimes.com reported Wednesday. No date was specified about when the production will stop.

A spokesperson of Foxconn told the Global Times Wednesday that he could not comment on the change of production plan pertaining to a specific client. Apple also could not be reached for comments as of press time.

Hong Kong-based takungpao.com cited China Economic Times in a Wednesday report saying that Apple had reduced 30 percent of its iPhone 5C orders to Foxconn due to sluggish demand. Another Taiwan-based Apple supplier, Pegatron Corporation, has seen Apple reducing as much as 50 percent of its orders of iPhone 5C components, the news portal said.

Apple's mid-end iPhone 5C fell far short of sales expectation, Wang Yanhui, head of Shanghai-based Mobile China Alliance, told the Global Times Wednesday. "The price difference between the high-end iPhone 5S and the iPhone 5C is too small, and the latter does not have any technological breakthrough to attract mobile phone buyers either," Wang said.

Apple's iPhone 5C, which was released on September 20 and is priced in the US at $99 with a contract, features a plastic back and is powered by the A6 chip. The iPhone 5S model, also released in September and priced at $199 with a contract in the US, has anodized aluminum backs and an A7 chip.

Fu Zhiyong, managing director of Beijing-based consultancy ACME Management Consulting, told the Global Times Wednesday that Apple launched the iPhone 5C to steal customers from less expensive brands, such as Samsung. However, since the iPhone 5C did not have major technological or price advantages over the Android phones, it turned out to be unpopular, Fu said.

But Foxconn can easily apply the capacity it uses to manufacture iPhone 5C components to produce the iPhone 5S, Fu said. "There is no significant technological difference between the iPhone 5C and 5S. And since the iPhone 5S is more popular and higher-end, Foxconn makes more profits from making the 5S model and it makes sense for the company to switch from producing the iPhone 5C to iPhone 5S."

It is normal for electronic device makers to adjust production plans three months after the products are introduced, Fu said. The sales always decline a few months after the launch, because most customers snap up the goods right after they are introduced, he said.