Report: Apple reduces iPhone orders for second quarter

[AppleInsider]

Slow European sales have caused Apple to reduce its iPhone shipment expectations for the second fiscal quarter ending March by as much as 50 percent, according to published report.

Citing sources at the Cupertino-based company's component suppliers, the Chinese-language Economic Daily News said second-quarter iPhone shipments have been cut from 2 million units to about 1.0 - 1.2 million.

Slow sales of the touch-screen handset in Europe are to blame for the move, the Daily News said, without providing any further details.

During last week's Macworld Expo, Apple chief executive Steve Jobs reported overall sales of more than 4 million iPhones to date, adding that the company is sustaining a daily sales rate of about 20,000 units.

At that rate, Apple should be on track to report sales of approximately 1.8 million units for the March quarter, which runs contrary to the claims by the Daily News .

Additionally, it should be noted that Apple often seeks to operate under a dual supplier strategy, where, for instance, it would source the iPhone's touch-screen component from not one but two distinct suppliers.

Therefore, reports out of individual component suppliers may not be representative of the company's overall plans and targets.

[ View this article at AppleInsider.com ]

[Abster2core]

Originally Posted by AppleInsider

Slow European sales have caused Apple to reduce its iPhone shipment expectations for the second fiscal quarter ending March by as much as 50 percent, according to published report.

Citing sources at the Cupertino-based company's component suppliers, the Chinese-language Economic Daily News said second-quarter iPhone shipments have been cut from 2 million units to about 1.0 - 1.2 million.

Citing sources…as you have done does not support you referencing to it as a "report," "published" or otherwise.

[macintel4me]

This article is confusing. Either 1) Apple DID lower iPhone sales projections or 2) did the Economic Daily News speculate that Apple WILL lower iPhone sales projections.

[samurai1999]

They're probably scaling back production of this model before introducing the next model

[JLL]

Why does AI have to refer to Apple as "the Cupertino-based company" or "the Cupertino, Calif.-based firm" in every news article?

[Zandros]

Originally Posted by JLL

Why does AI have to refer to Apple as "the Cupertino-based company" or "the Cupertino, Calif.-based firm" in every news article?

Variation. How many other synonyms to "Apple Inc." can you think of?

/Adrian

[teckstud]

There goes Steve's 10 Million projection. Expect to see more AAPL decline.

[kresh]

This is easy enough. It's just more stock speculators releasing bad news on a popular stock that has been hit recently.

Due to recent loses the stock is a good buy. If they can cause the price to trop a few more bucks then that's extra profit. By the time the report is refuted they will have already purchased stock at the new low price

It's all a game to these people. Stock Market = Legalized Gambling

[ncee]

I would agree. ALL of the nay-sayers are having a field day.

Kick the little guy when he's down

Talk about OVER RATED - let's look at Google! A company that has no products, just a TON of hype, and look where their stock is???

I guest it's about time, for them to start getting sued by EVERYONE who uses the internet …

Skip

[Booga]

Originally Posted by teckstud

There goes Steve's 10 Million projection. Expect to see more AAPL decline.

I'm not so sure. I think the success of the iPhone is almost completely dependent on the SDK being released next month. That will either make or break it as a "platform" instead of a one-off stunt. If they release an SDK that is nothing more than Dashboard widgets, the iPhone is probably doomed. If they release a sandboxed Cocoa with Objective-C, Python, JavaScript, and dare I ask for Java then the iPhone (and iPod Touch) become the next Big Thing and start cannibalizing MacBook Air sales (that's a good thing, IMHO).

[Booga]

Originally Posted by ncee

I would agree. ALL of the nay-sayers are having a field day.

Kick the little guy when he's down

Talk about OVER RATED - let's look at Google! A company that has no products, just a TON of hype, and look where their stock is???

I guest it's about time, for them to start getting sued by EVERYONE who uses the internet …

Skip

For a company with no products, they make an AWFUL LOT of money!

Their products are your eyes.

[freelander51]

Well I guess that they (as in AAPL) underestimated the Europeans' reluctance to buy a "non" subsidised phone w/o 3G at 399 Euro.

Think about it - we all know that a 3G phone is in the pipeline
3G network are ubiquitous in Europe
A 2 Year contract for the phone seriously blocks your options for the near future.

I for once -just being a very representative sample of 1- am waiting until a 3G model comes out. I have been battling with EDGE on my E50 for long enough to appreciate the benefits of a faster connection. I rather buy an iPod Touch instead. Yes-I dont have a phone, but wait until Skype churns out a Skype client for this platform (once the SDK is out).

Ok I will have two devices -so what.

In order to succeed in the European market Apple needs to churn out a 3G HSDPA version *fast*

And I already deplore all the early adopters who will be bogged down by a two year contract. It shows : never by a model with a Dot 0 revision

[asdasd]

This report is either nonsense, Apple have a new model in the works, or they are changing suppliers. The conference call was specific about how many they are selling, and being on target for the 10 million by the end of this year. Apple guides conservatively. If they were expecting to see a fall of 50% this quarter they would have priced it in. Further their reaction in Europe , like in the US, would be to reduce the price to make targets.

[kenaustus]

I wouldn't be surprised if Apple backs off on any inventory position over the next 90 days. There are problems with the economy - enough for Bush to be willing to hand out $150 Billion to boost it up again.

For any company in the consumer market watching inventories closely while the economic issues play out is very smart - and Apple is a pretty smart company.

[JeffDM]

Originally Posted by Zandros

Variation. How many other synonyms to "Apple Inc." can you think of?

/Adrian

For a long time, it didn't vary. AI used just one single ridiculously long and stuffy way to say "Apple".

It's unnecessary. Variation by itself does not make better copy, especially if they are switching among three stuffy ways to refer to Apple. The only good reason to put it in there is to clarify who it is, and that's completely not necessary.

[satchmo]

Originally Posted by Booga

I'm not so sure. I think the success of the iPhone is almost completely dependent on the SDK being released next month. That will either make or break it as a "platform" instead of a one-off stunt. If they release an SDK that is nothing more than Dashboard widgets, the iPhone is probably doomed. If they release a sandboxed Cocoa with Objective-C, Python, JavaScript, and dare I ask for Java then the iPhone (and iPod Touch) become the next Big Thing and start cannibalizing MacBook Air sales (that's a good thing, IMHO).

That plus some sort of penetration in Asia.

[JeffDM]

Originally Posted by ncee

Talk about OVER RATED - let's look at Google! A company that has no products, just a TON of hype, and look where their stock is???

No products? That may be technically true, but it's still a false argument. A product isn't necessary if you can make your money on services.

I agree that their price is too high for their earnings, but they are making plenty of money, for a company that you oddly suggest has nothing to sell.

[JeffDM]

Originally Posted by teckstud

There goes Steve's 10 Million projection. Expect to see more AAPL decline.

They've already sold four million, and sold 2.5 million last quarter. Even if they only sell 1.5 million a quarter, they can hit the projection. There are suggestions by Apple and AT&T that the 3G model will be available this year too.

[irnchriz]

I want to get an iPhone but the O2 contracts are crap

[samurai1999]

Originally Posted by JeffDM

They've already sold four million, and sold 2.5 million last quarter. Even if they only sell 1.5 million a quarter, they can hit the projection. There are suggestions by Apple and AT&T that the 3G model will be available this year too.

You obviously weren't paying attention during the conference call......

Peter Oppenheimer:
"I’ll leave the analysis to you but we’re very happy with iPhone momentum. Our customers are raving about their iPhones and we remain confident in our goal for 10 million for calendar 2008."

So, contrary to popular opinion, the target is 10million in CY2008
(who'da thought?!)

Don't worry - they'll do this anyway - once they release the 3G version!

[deanbar]

Originally Posted by irnchriz

I want to get an iPhone but the O2 contracts are crap

It's a more competitive market here in UK where phones are subsidised, if Apple reduced their prices, they would fly off the shelves.

[JeffDM]

Originally Posted by samurai1999

You obviously weren't paying attention during the conference call......

Peter Oppenheimer:
"I’ll leave the analysis to you but we’re very happy with iPhone momentum. Our customers are raving about their iPhones and we remain confident in our goal for 10 million for calendar 2008."

So, contrary to popular opinion, the target is 10million in CY2008
(who'da thought?!)

Don't worry - they'll do this anyway - once they release the 3G version!

I don't see much point in listening to investor phone calls.

If Jobs mispoke in his original presentation, that's fine, but I've seen it said both ways.

[Shogun]

Originally Posted by samurai1999

So, contrary to popular opinion, the target is 10million in CY2008
(who'da thought?!)

Actually this is what SJ actually said in the keynote in 07. Like many I misinterpreted until someone actually gave the Quicktime link and the time to listen. Indeed he has said from the beginning that the goal was to sell 10 Million in the calendar year 08.

Which just makes sense when you consider that he also said 1% of the cellphone market of pieces sold. Those market numbers are yearly. To get 1% of an annual number you need an annual number.

[macshark]

Here's another article that with a serious negative speculation based on partial facts - I guess most online publications prefer to hype the pessimism to go with the spirit of the day...

There may be some truth behind this article that Apple may have cut orders for iPhone or some iPhone component by half. A remote possibility is that Apple expects a sudden 50% drop in the sales of iPhone. However, there are two more likely scenarios:

1. Apple may have found an alternate source for the component or is ramping up an alternate manufacturer. As the unit volumes ramp up, it is unreasonable to expect Apple to use a single manufacturer or a single sourced component. The article actually alludes to this in the last paragraph.

2. The other possibility is that Apple is getting ready to ramp up production on a new model (as pointed out earlier in this thread). It looks like Broadcom's 3G chipset is ready to go. The slow data rate being the one obvious deficiency of the iPhone, I wouldn't be surprised to see Apple accelerating the 3G iPhone schedule to hit the market earlier.

[solipsism]

Originally Posted by samurai1999

"I’ll leave the analysis to you but we’re very happy with iPhone momentum. Our customers are raving about their iPhones and we remain confident in our goal for 10 million for calendar 2008."

That could also be interpreted that he wants to sell his 10 millionth iPhone in 2008.

[Denmaru]

As someone else put it: "Mac-Users don't take shit". Now add this to the fact that here in Europe, there's a far better infrastructure (3G), and you have your perfect reason. This is why I bought an iPod touch yesterday, and didn't wait for an iPhone.

Give us an 3G iPhone, and I'll buy it, no matter the carrier.

[Rolo]

File this under Duh! One would expect post-holiday sales to decline somewhat. I'm only expecting about 1.6m iPhones to be sold this quarter which means a slow decline in the run rate. The rate should be even lower in the first 2 months of next quarter ahead of the 3G iPhone.

One thing that could help sales, starting in March, is the release of the iPhone SDK around the end of February. As new apps show up, the iPhone will become even more desirable. These apps should also work on the iPod touch.

[solipsism]

Originally Posted by Rolo

One thing that could help sales, starting in March, is the release of the iPhone SDK around the end of February. As new apps show up, the iPhone will become even more desirable. These apps should also work on the iPod touch.

I would expect a 3G iPhone to move 1M units a month in Europe alone, and another 1M in the States.

[David Stevenson]

Originally Posted by Rolo

One thing that could help sales, starting in March, is the release of the iPhone SDK around the end of February. As new apps show up, the iPhone will become even more desirable. These apps should also work on the iPod touch.

The only apps I would expect to see after one month of SDK release would be widget-class apps (and maybe some heirloom jail-break apps). Any game-changing killer app would take six-twelve months, and then only a 1.0 version. Think more like two years for a robust app on a robust v 2.0 hardware (or v 3.0 hardware).

[TBaggins]

Originally Posted by JeffDM

They've already sold four million, and sold 2.5 million last quarter. Even if they only sell 1.5 million a quarter, they can hit the projection. There are suggestions by Apple and AT&T that the 3G model will be available this year too.

Apparently the 10 million goal is for calendar year 2008, according to the Apple execs at the recent earnings conference call (I caught the transcript on Seeking Alpha).

So the 2007 results don't count towards that, sadly...

.

[TBaggins]

Originally Posted by AppleInsider

Slow European sales have caused Apple to reduce its iPhone shipment expectations for the second fiscal quarter ending March by as much as 50 percent, according to published report.

What did I tell ya, Teno? You may now refer to me as your own personal Nostradamus (with apologies to Depeche Mode).

I still think Apple can turn the Euro situation around decisively, if they address their feature set and pricing issues over there in a timely manner. Its not like the Europeans don't want something as spectacular as the iPhone, but they're not willing to give up certain 'dealbreaker' features and pay through the nose to do so.


.

[solipsism]

Originally Posted by TBaggins

Apparently the 10 million goal is for calendar year 2008, according to the Apple execs at the recent earnings conference call (I caught the transcript on Seeking Alpha).

So the 2007 results don't count towards that, sadly...

As I stated before, that could also be construed to mean a total of 10M sometime in 2008. Plus, we know from Sun's CEO stating that ZFS will be teh default filesystem in Leopard that execs do make make mistakes. I'll need more evidence before I believe that Apple meant "10M iPhones must be sold in the calendar year of 2008 " while completely discounting its impressive 2007 numbers.

Originally Posted by TBaggins

I still think Apple can turn the Euro situation around decisively, if they address their feature set and pricing issues over there in a timely manner. Its not like the Europeans don't want something as spectacular as the iPhone, but they're not willing to give up certain 'dealbreaker' features and pay through the nose to do so.

I say keep the price where it is and release a 3G version within the next 5 months. If you build it they will come.

[teckstud]

Originally Posted by TBaggins

Apparently the 10 million goal is for calendar year 2008, according to the Apple execs at the recent earnings conference call (I caught the transcript on Seeking Alpha).

So the 2007 results don't count towards that, sadly...

.

You can't have only one phone and expect to stay hot and sell 10MIL. Just ask Verizon and their RAZR. Apple needs to come out with more than one version of the iPhone and some cheaper versions as well and fast or else watch that stock stay low or decline more. The cellphone business is very different and much more fickle than both computers and MP3s. Add to that a bad economy -the average consumer is just not going to buy a new $400 phone- no way. Not when you can renew your contract with your present carrier and get a decent phone for $50. I am talking about the average consumer now- not AAPL stockholders.

[wizard69]

Originally Posted by Booga

I'm not so sure. I think the success of the iPhone is almost completely dependent on the SDK being released next month. That will either make or break it as a "platform" instead of a one-off stunt.

The SDK is very important there is no doubt there. Frankly I won't buy an iPhone as long as that issue is up in the air. But I have to point out there is a difference between the iPhone as a platform and the iphone as a smart phone. It is pretty obvious that the iPhone does well as a smart phone. What it will do as a platform remains to be seen.

If they release an SDK that is nothing more than Dashboard widgets, the iPhone is probably doomed.

Well I tend to disagree as a good portion of the user base would simply wait for Apple to deliver the apps they want. Anyhow if it has taken them this long to get out Dashboard type Widgets then Apple is doomed as a company. The SDK would provide more than that other wise it would be out already.

If they release a sandboxed Cocoa with Objective-C, Python, JavaScript, and dare I ask for Java then the iPhone (and iPod Touch) become the next Big Thing and start cannibalizing MacBook Air sales (that's a good thing, IMHO).

First; off you used the word "cannibalizing" which, as far as I'm concerned demonstrates ignorance about business. Hopefully in the near future AI will start filtering posts using that word. Second; Java is not any more useful on small devices like this than Terex truck is useful to a kid in a sandbox. Third; Air is due for an untimely death simply because of what it is. Apple will either be forced to update it or scrap it.

Dave

[wizard69]

Originally Posted by macshark

................It looks like Broadcom's 3G chipset is ready to go. The slow data rate being the one obvious deficiency of the iPhone, I wouldn't be surprised to see Apple accelerating the 3G iPhone schedule to hit the market earlier.

If Apple does indeed go with the Broadcom chip set iPhone 2 will be very impressive! That is if they leverage the hardware completely. Problem is they have yet to do that on iPhone 1. I've yet to see any indication that the Bluetooth stack is any more complete for example.

It may be unwarranted but I'm starting to think that Apple just doesn't have enough resources applied to the iPhone team to remain competitive in the market place. There are a couple of issues here one of which is the lack of a real model line up. I can understand iPhone 2 not being ready but where the hell is the low end phone. Second where are the hardware updates to the current iPhone. I'm primarily talking Flash here. I don't really care about edge nor 3G, but I do care about the other features of the machine, so where are the 16 & 32 GB models?

Dave

[TBaggins]

Originally Posted by solipsism

As I stated before, that could also be construed to mean a total of 10M sometime in 2008. Plus, we know from Sun's CEO stating that ZFS will be teh default filesystem in Leopard that execs do make make mistakes. I'll need more evidence before I believe that Apple meant "10M iPhones must be sold in the calendar year of 2008 " while completely discounting its impressive 2007 numbers.

I dunno Teno... seems pretty clear, unless they're being intentionally misleading. Its possible, I admit:


Peter Oppenheimer [Chief Financial Officer and Senior Vice President of Apple]:

I’ll leave the analysis to you but we’re very happy with iPhone momentum. Our customers are raving about their iPhones and we remain confident in our goal for 10 million for calendar 2008.

http://seekingalpha.com/article/6111...e=yahoo&page=8

Timothy D. Cook [Chief Operating Officer]
We don’t talk about new products but we are very confident in meeting the 10 million for the year of 2008.

Timothy D. Cook [COO]
We’ve very confident in meeting the 10 million for 2008.

http://seekingalpha.com/article/6111...e=yahoo&page=9


By the by, the 2007 numbers... not that impressive. They've sold 4 million in 6 1/2 months (Stevie included the two weeks before MWSF in his numbers).

At that pace, they miss their 10 million goal, since its for a 12-month time period.

I say keep the price where it is and release a 3G version within the next 5 months. If you build it they will come.

I dunno... for one thing, the iPhone is more expensive in Europe than it is the in US. For another, the competition is just plain fiercer over there, phone-wise. 3G alone will certainly help (as would MMS), but will it be enough?

What do the Euro folks on this board think?

.

[TBaggins]

Originally Posted by teckstud

You can't have only one phone and expect to stay hot and sell 10MIL. Just ask Verizon and their RAZR. Apple needs to come out with more than one version of the iPhone and some cheaper versions as well and fast or else watch that stock stay low or decline more. The cellphone business is very different and much more fickle than both computers and MP3s. Add to that a bad economy -the average consumer is just not going to buy a new $400 phone- no way. Not when you can renew your contract with your present carrier and get a decent phone for $50. I am talking about the average consumer now- not AAPL stockholders.

A little hard to say how you get a wider lineup of iPhones, though.

For example, a lot of ppl say "build an iPhone Nano!!" But... why would you decrease the screen size on a device whose primary differentiator versus other smartphones is how great it works as an internet browsing device? The iPhone is not vastly superior as a phone, and as far as the iPod part goes, a lot of ppl have iPods already and are quite happy with them.

About the only good differentiator I can think of is capacity. They obviously need a 16GB iPhone. So when 3G comes, there should be an 8GB model and a 16GB one. Not a true 'lineup', of course, but it lets you hit two different price points (like they did before with 4GB and 8GB). And not everyone is going to be a power user of the 'iPod' part of the iPhone, after all.

.

[dpm]

Well, perhaps if a iphone was available in Canada the numbers may be better.

[solipsism]

Originally Posted by TBaggins

A little hard to say how you get a wider lineup of iPhones, though.

For example, a lot of ppl say "build an iPhone Nano!!" But... why would you decrease the screen size on a device whose primary differentiator versus other smartphones is how great it works as an internet browsing device? The iPhone is not vastly superior as a phone, and as far as the iPod part goes, a lot of ppl have iPods already and are quite happy with them.

About the only good differentiator I can think of is capacity. They obviously need a 16GB iPhone. So when 3G comes, there should be an 8GB model and a 16GB one. Not a true 'lineup', of course, but it lets you hit two different price points. And not everyone is going to be a power user of the 'iPod' part of the iPhone, after all.

.

I concur. The iPhone was great at replacing a phone and iPod with one device that could also do mail and internet expertly.

i don't want a small screen or physical numbers on an iPhone. Then I'd have to get a touch to have the same capabilities I have now. I so want an improved iPhone with 3G and 16GB SSD. Screw GPS! I don't see how it couldn't sell if it had 3G.

How long after the SDK comes out should we have MMS?

[TBaggins]

Originally Posted by macshark

Here's another article that with a serious negative speculation based on partial facts - I guess most online publications prefer to hype the pessimism to go with the spirit of the day...

There may be some truth behind this article that Apple may have cut orders for iPhone or some iPhone component by half. A remote possibility is that Apple expects a sudden 50% drop in the sales of iPhone. However, there are two more likely scenarios:

1. Apple may have found an alternate source for the component or is ramping up an alternate manufacturer. As the unit volumes ramp up, it is unreasonable to expect Apple to use a single manufacturer or a single sourced component. The article actually alludes to this in the last paragraph.

2. The other possibility is that Apple is getting ready to ramp up production on a new model (as pointed out earlier in this thread). It looks like Broadcom's 3G chipset is ready to go. The slow data rate being the one obvious deficiency of the iPhone, I wouldn't be surprised to see Apple accelerating the 3G iPhone schedule to hit the market earlier.

I dunno... the fact that the top Apple execs at the earnings conference call this week didn't break out Euro iPhone sales at all leads me (and most anyone else who parses 'corporate speak') to believe that things are going just as dismally over there as has been reported.

When a company says "we're very happy" with our Euro sales, and then provides no figures to back them up at all, well, you get the gist. If they were doing well over there they'd say how many they've sold, and crow about it.

What's going is that Euro sales are slow, and US sales will slow, since calendar Q1 is slower than the holiday quarter, and the US is very likely heading into what should be a doozy of a recession.

.