Reduced Orders for the iPhone 5C

The iFruit company has reduced orders for its lower-end iPhone 5C, people familiar with the situation said, fueling concerns about weaker-than-expected consumer demand and the company's pricing strategy

Apple last month began selling its two new iPhone models in 11 markets, including the U.S. and China. Much of the consumer attention focused on the company's high-end iPhone 5S—which offers faster chips and more features, including a fingerprint sensor—but is about $100 more expensive than the 5C. Demand for the new, gold-colored 5S was particularly high early on, causing the company to increase orders for that model.

Apple told its two assemblers, Taiwan-based Pegatron Corp. and Hon Hai Precision Industry Co., that it would cut this quarter's orders for the iPhone 5C, the people familiar with the situation said. Pegatron, which analysts said assembles two-thirds of iPhone 5Cs, was told the order would be cut by less than 20%, a person familiar with the matter said. Hon Hai, which assembles the remaining 5Cs, was told the order would be cut by a third, two people familiar with the matter said.

A component supplier was notified that the order for iPhone 5C parts would be cut 50%, a person familiar with the matter said. Analysts said that could signal that device shipments would slow next year or that assemblers would reduce their inventories.