Just four weeks after unveiling its new iPhone 5C, Apple is scaling back production of the cheaper smartphone since it might be too expensive Reuters reported.
"We're not especially concerned with 5C order cuts at this point because they appear to be offset by strong demand and increased production for the 5S," Brian Colello, analyst with Morningstar told Reuters. "As far as emerging markets, the 5C is simply not cheap enough to gain traction with customers that can buy $150 Android devices."
The reductions will take place throughout the rest of the year Reuters reported. On the other end of the spectrum, the company is increasing production of its more upscale phone in the iPhone 5S
Apple added both devices to their slate of phones last month, and are now concerned the iPhone 5C will damage product sales, and overflow margins.
"Canaccord Genuity's survey work indicates a significantly higher sell-through mix of iPhone 5s versus 5c that should benefit near-term Average Selling Prices and margins," Canaccord Genuity analyst Michael Walkley told Retuers.
According to Reuters, Pegatron Corp, who make the phones, has reported a 20 percent reduction in sales
Hon Hai Precision Industry Co., who also creates the devices has also reported a reduction in prices by a third.
However, orders for the iPhone 5S have gone up in the fourth quarter.
The iPhone 5C is $100 less expensive than the premium 5S with an initial price at $649 for the 16 gigabyte model.
Apple predicts it will sell 33 million to 36 million new iPhones during the fourth fiscal quarter also known as the holiday quarter in a projection that could top 50 million.
The company could also unveil a new selection of iPads. In the coming week, Apple will present a new tablet in order to keep up with competitors like Amazon.com's Kindle Fire and devices made by Samsung.
