Pegatron Misses Expected Third Quarter Profit Apparently Due To iPhone 5c Production Cuts

Its not like this is the first time we’re hearing about iPhone 5c production cuts. It has been rumored multiple times that Apple has cut iPhone 5c production due to weak demand for its “unapologetically plastic” iPhone. Earlier today Taiwan based Pegatron, which manufactures the iPhone 5c, reported its third quarter earnings. The net profit slightly missed market expectations, coming in at T$2.48 billion or US$84.29 million instead of the expected T$2.55 billion. According to Reuters, “cutbacks” for the iPhone 5c impacted the manufacturer’s bottom line.

Pegatron’s stock jumped to an all time high back in May amid rumors that Apple was ramping up orders for the iPhone 5c and was tapping Pegatron for the job, instead of long time supplier Hon Hai Precision Industry a.k.a Foxconn. The stock has declined by almost a quarter since then, as over the summer accusations of labor abuse were levelled against the company. Analysts are now wary of Pegatron’s performance in the remainder of this year due to “less-than-stellar” sales of iPhone 5c. While Apple hasn’t confirmed if it has indeed cut iPhone 5c production, it hasn’t revealed any sales figures as well. Moreover, quite a lot of analysts are of the view that the cheaper iPhone just isn’t performing as well as the company might have hoped. If a recent report is to be believed, there might be another reason why Apple might be cutting back iPhone 5c orders particularly from Pegatron. Apple is expected to tap two additional Taiwan based manufacturers to produce the iPhone 5c and iPad mini early next year, though no confirmation of that has been received as yet.

Adnan Farooqui
Categories: Apple, Cellphones
Tags: iPhone 5C