iPhone 5C Is Underselling While The 5S Is Selling Fine, Verizon Exec Says

By Sinead Carew

NEW YORK (Reuters) - Verizon Communications Chief Financial Officer Fran Shammo said Apple Inc's iPhone 5C "undersold expectations" in the third quarter, while its pricier iPhone 5S was in short supply.

The "5C is in plenty supply" and "if you generally talk to each of the carriers I think they'll tell you the same thing," Shammo told Reuters in an interview Thursday after the company reported its third-quarter earnings.

Apple, which has its phones made by contract manufacturers overseas, is cutting production orders for the cheaper plastic-backed iPhone 5C just a month after its launch at the same time as the iPhone 5S, a source familiar with its supply chain told Reuters on Wednesday.

The production cutback was seen by analysts as a rare misstep for Apple, which typically only launches one phone at a time and tends to see massive demand for its devices, particularly during the quarter of their launch.

Consumer reception to the iPhone 5S appeared to have been much stronger, at least at Verizon Wireless, the biggest U.S. mobile operator.

Verizon's Shammo said scarcity of the iPhone 5S was a "significant issue" for Verizon Wireless, which missed Wall Street's third-quarter expectations for net subscriber additions as a result.

Shammo said iPhone 5S customers who were still waiting to receive their phones would be reflected in its numbers in the fourth quarter.

But he declined to say how much of an overall effect the shortage of the iPhone 5S had on the company's third-quarter figures.

About 51 percent of Verizon's smartphone activations in the quarter were for iPhone customers.

"What we don't know is how many customers would have come that didn't because they knew there was a shortage," he said.

(Editing by Bernadette Baum)