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Apple, HTC rumored to cut back on handset chipset orders in Q4

post #1 of 35
Thread Starter 
A new report claims handset vendors, including Apple and HTC, will reduce orders for smartphone chipsets in the fourth quarter of this year because of worries about the world economy.

Sources at Taiwan-based chipset makers relayed the information to industry publication DigiTimes.

"Some handset solution suppliers have indicated that a number of handset vendors, including Apple and HTC, have scaled down their chipset orders for the fourth quarter as compared with the third on concerns of the global economy," the report noted.

Most smartphone vendors will reportedly reach their shipment targets for the third quarter, which ends in September, but they have begun reducing orders for parts and components in case of a "possible impact from changing economic conditions."

The international economy has been unstable as of late. Earlier this month, the Standard & Poor's agency caused a stir when it downgraded debt from the U.S. government from AAA to AA (plus) for the first time in history. investors also fear consequences from debt issues in Europe.

It should also be noted that DigiTimes has a mixed track record with its predictions. The publication claims to have well-placed sources among the major Asian suppliers and manufacturers, but its more speculative reports have at times proven inaccurate.

Earlier this year, HTC raised its internal shipment target for 2011 to 70 million units, up from 50 million units. But, sources familiar with HTC's roadmap said the handset maker recently lowered its internal estimate to 50-60 million units.

Meanwhile, sources among Apple's suppliers claim that the iPhone maker has also "scaled down its orders for handset parts and components to be shipped at the end of third quarter."

Of course, Apple could simply be drawing down orders of the iPhone 4 ahead of the "future product transition" that executives have warned would take place during the September quarter. During a quarterly earnings call last month, Chief Financial Officer Peter Oppenheimer explained the transition as a partial reason for the company's guidance of a 12 percent revenue decline.

The next-generation iPhone has been alternately reported to arrive in September and October. Apple has kept its cards close to its chest ahread of the expected release, unlike last year which saw an unprecedented leak.

Alleged iPhone 5 cases circulating in China appear to depict a device with curved sides. The smartphone is also expected to sport the A5 processor and an 8-megapixel camera.



Apple has been on a tear with the iPhone, selling a record 20.34 million units in the June quarter. Revenue from the device jumped up to $13.3 billion, almost half of the company's total revenue, during the period.

post #2 of 35
To me, the cases look more like fitting to a upgraded iP3 GS.
post #3 of 35
I don't believe this for a second.
post #4 of 35
Quote:
Originally Posted by AppleInsider View Post

The international economy has been unstable as of late. Earlier this month, the Standard & Poor's agency caused a stir when it downgraded debt from the U.S. government from AAA to AA (plus) for the first time in history. investors also fear consequences from debt issues in Europe.

I've got no fear in the us. Our cities may look like third world countries and out kids might not be likely to graduate high school, but thankfully we have plenty of bright people from other countries in our universities cranking out new products, ideas etc. As long astop notch universities are still in US I don't think its wise to doubt the credit rating.

Sorry back to the topic, I think that if iPhone4 is to be a $99 phone as iPhone 3gS has become, perhaps they should at least keep production steady, so that there is enough backlog to sell those puppies for a whole year.
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post #5 of 35

The richest company in the world knows something.
Hold on to your hats... things are going to get bad.

sell sell sell

post #6 of 35
Quote:
Originally Posted by Mode View Post


The richest company in the world knows something.
Hold on to your hats... things are going to get bad.

sell sell sell


The richest company in the world? Who would that be? Hopefully you aren't confusing Apple's market value with something they can actually use?
post #7 of 35
Ignore Digitimes reports.
post #8 of 35
Like crystal meth, people will find a way to have the latest smart phone.
post #9 of 35
Quote:
Originally Posted by cvaldes1831 View Post

Ignore Digitimes reports.

Agreed. They're not a credible news source. I don't know why tech blogs still regurgitate its nonsense.
post #10 of 35
False
post #11 of 35
If we assume this is true, it could also mean that apple has sought alternative chipset makers outside of Taiwan.

I for one don't see a compelling reason to upgrade yet. Wallet, 4G etc is not too appealing right now. 4G will likely cost more and eat battery faster. iOS 5 sems to run fine on iP4.

Those with 3Gs models, and older android sets might be more inclined to upgrade
post #12 of 35
Quote:
Originally Posted by jfanning View Post

Hopefully you aren't confusing Apple's market value with something they can actually use?

Don't follow what you are implying. That market value can't be monetized? Really?
post #13 of 35
The report makes no sense.

As we saw in the last recession (2007-2009), Apple is largely immune to global economic downturns. This was the period where ALL of Apple's major segments grew, and grew dramatically, including the mac, iPhone, and iPod.

I sincerely doubt that Apple would reduce Q4 supplies because of global economic fears, especially when historically their biggest problem for the 2 or so quarters following a phone release are supply constraints.

What is possible, and makes sense, is the idea suggested by AI. That Apple has reduced chipset orders for the cheaper secondary phone they would be selling (i.e. the iPhone4 after the iPhone 5 is released). The secondary phone is far more likely to be affected by the global economy (because the only reason anyone is going for it instead of the iPhone 5 is because they are price conscious).
post #14 of 35


This guy is an idiot

Apple is rolling out new iphone - of course they would cut parts order pending launch - world wide including China!!!
Quote:
Originally Posted by AppleInsider View Post

A new report claims handset vendors, including Apple and HTC, will reduce orders for smartphone chipsets in the fourth quarter of this year because of worries about the world economy.

Sources at Taiwan-based chipset makers relayed the information to industry publication DigiTimes.

"Some handset solution suppliers have indicated that a number of handset vendors, including Apple and HTC, have scaled down their chipset orders for the fourth quarter as compared with the third on concerns of the global economy," the report noted.

Most smartphone vendors will reportedly reach their shipment targets for the third quarter, which ends in September, but they have begun reducing orders for parts and components in case of a "possible impact from changing economic conditions."

The international economy has been unstable as of late. Earlier this month, the Standard & Poor's agency caused a stir when it downgraded debt from the U.S. government from AAA to AA (plus) for the first time in history. investors also fear consequences from debt issues in Europe.

It should also be noted that DigiTimes has a mixed track record with its predictions. The publication claims to have well-placed sources among the major Asian suppliers and manufacturers, but its more speculative reports have at times proven inaccurate.

Earlier this year, HTC raised its internal shipment target for 2011 to 70 million units, up from 50 million units. But, sources familiar with HTC's roadmap said the handset maker recently lowered its internal estimate to 50-60 million units.

Meanwhile, sources among Apple's suppliers claim that the iPhone maker has also "scaled down its orders for handset parts and components to be shipped at the end of third quarter."

Of course, Apple could simply be drawing down orders of the iPhone 4 ahead of the "future product transition" that executives have warned would take place during the September quarter. During a quarterly earnings call last month, Chief Financial Officer Peter Oppenheimer explained the transition as a partial reason for the company's guidance of a 12 percent revenue decline.

The next-generation iPhone has been alternately reported to arrive in September and October. Apple has kept its cards close to its chest ahread of the expected release, unlike last year which saw an unprecedented leak.

Alleged iPhone 5 cases circulating in China appear to depict a device with curved sides. The smartphone is also expected to sport the A5 processor and an 8-megapixel camera.



Apple has been on a tear with the iPhone, selling a record 20.34 million units in the June quarter. Revenue from the device jumped up to $13.3 billion, almost half of the company's total revenue, during the period.

post #15 of 35
Quote:
Originally Posted by monstrosity View Post

I don't believe this for a second.

Yeah Apple cutting back when they can't even sell enough iPads and iPhones as the rest of the tech world self-implodes. Not gonna happen.
post #16 of 35
Quote:
Originally Posted by Mode View Post


The richest company in the world knows something.
Hold on to your hats... things are going to get bad.

sell sell sell


Quote:
Originally Posted by mdriftmeyer View Post

Like crystal meth, people will find a way to have the latest smart phone.

I would just like to juxtapose the two posts above.
post #17 of 35
Quote:
Originally Posted by anantksundaram View Post

Don't follow what you are implying. That market value can't be monetized? Really?

Not by Apple it can't be, they don't own it, the shareholders do.
post #18 of 35
Quote:
Originally Posted by cvaldes1831 View Post

Ignore Digitimes reports.

Why would we do that. I mean they know everything. Heck I heard they just hired Shaw Wu and he's never wrong.

A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

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A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

Reply
post #19 of 35
Quote:
Originally Posted by jfanning View Post

Not by Apple it can't be, they don't own it, the shareholders do.

I always get confused in this area. As an expert please explain GE to me in this context. Half a trillion in debt last time I checked. Do I understand then that GE has this level of debt some other way? I assume they spent this money already, but without utilizing share value? How did they do it?
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini, SE30, IIFx, Towers; G4 & G3.
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Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini, SE30, IIFx, Towers; G4 & G3.
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post #20 of 35
I do think the economy is going to be in worse shape than it was in 2008/2009. The problems is politics.

The Republicans are will to do anything to destroy the economy to try and make Obama look bad ( or look worse depending on your political slant). The Democrats are doing a pretty good job of trying to destroy the economy with run away spending. I do not see either side willing to do anything to actually help the economy.... Political ideology is taking precedent over common sense these days...

In 2008 we still had enough resources to saved the crooked bankers and try to stimulate the economy with infrastructure spending..... There is nothing left to try and help out this go round.... It will not be as quick of a fall, but I think the bottom will be deeper and the rebound much more flat ( hard to believe... )

I think pulling back on production is a very wise move at this moment. Apple has little to risk as Apple fans are so diehard that they will wait if demand greatly outstrips supply anyway...
post #21 of 35
Quote:
Originally Posted by sranger View Post

The Republicans are will to do anything to destroy the economy to try and make Obama look bad ( or look worse depending on your political slant). The Democrats are doing a pretty good job of trying to destroy the economy with run away spending. I do not see either side willing to do anything to actually help the economy.... Political ideology is taking precedent over common sense these days...

I just want to point out that BOTH parties have increased spending significantly.

If you look at the last 50 years, spending has increased faster when the Republicans were in control than when the Democrats were in control (the difference is small, but significant). The Democrats tend to spend more on social programs and the Republicans on defense - but both sides have a long history of spending more than the government brings in. The Republicans, though, have done a better job of painting the other side as over-spenders (largely because they consider social spending as optional but defense spending as a necessity).

It turns out when you look at statistics, that the LOWEST growth rate is when one party controls the White House and the other controls Congress. But government grows even in that environment.

BOTH parties need to take the blame for their share of the problem and do something about it.
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post #22 of 35
Quote:
Originally Posted by digitalclips View Post

I always get confused in this area. As an expert please explain GE to me in this context. Half a trillion in debt last time I checked. Do I understand then that GE has this level of debt some other way? I assume they spent this money already, but without utilizing share value? How did they do it?

It is not a simple matter - debt can be in all sorts of forms. Some is good, some is bad, and some is both good and bad.

Rather than trying to get an education on business finance on an Internet forum, you should try to get an education through a more formal process. At least pick up a book or two. If you can't understand it from a decent book or two, trying to make sense of it from 5 paragraphs in a forum like this is a waste of everyone's time.
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post #23 of 35
It makes sense that they produce less, if people have less money demand for luxuries go down.

I would expect apple to use this as an excuse to produce less. Even low income neighborhoods love their SUV's and latest phones. I do feel sorry for that middle class, that gets no support yet has to pay those higher taxes.

I think like Warren Buffet said, raise the taxes on the super rich (who pay less on taxes then others who make $250,000+) and lower the tax for that unhelped middle class.
post #24 of 35
Quote:
Originally Posted by jfanning View Post

Not by Apple it can't be, they don't own it, the shareholders do.

Hmm.... know about new share issues?

Not that Apple needs any additional cash, but if it wanted to, it could - just as any company could - easily monetize (subject to a small signaling discount) a high share price.
post #25 of 35
Quote:
Originally Posted by digitalclips View Post

I always get confused in this area. As an expert please explain GE to me in this context. Half a trillion in debt last time I checked. Do I understand then that GE has this level of debt some other way? I assume they spent this money already, but without utilizing share value? How did they do it?

You posted this question to jfanning, but let me see if can throw in a couple of cents.

1) Re. GE's very high levels of debt, you probably know that half of GE is GE Capital, i.e., its financial services business. All financial services firms have very high levels of debt since that is the 'raw material' they need in making loans, which is their core business.

The level of debt attributable to GE's industrial businesses is quite low.

2) GE had a near-death experience in 2008 when GE Capital could not access any credit (recall that the short-term credit markets had completely frozen up). The US government threw GE a lifeline to keep what was then a liquidity issue spiraling downwards to becoming a solvency issue. The very existence of a company with hundreds of thousands of employees could have been at stake. Following that experience, Jeff Immelt decided to issue massive amounts of debt when the market recovered, to keep as cash on balance sheet as a rainy day fund, so that he would never have to go through that again (I've heard him say this in public forums).

As an aside, this may explain Jobs's, and hence, Apple's obsession with holding on to obscene amounts of cash!

3) As far as I can tell, GE did not 'monetize' a high share price to raise this new debt - although many companies do that, e.g., as Google did, recently, even though they had no need for extra cash - since GE's stock price was near historic lows when they did decide to tap the debt markets (in 2009-10, when the credit crunch eased).

The bottom line is, companies can monetize their high share prices to raise new equity or issue debt cheaply, although the latter is less related to the share price.
post #26 of 35
Quote:
Originally Posted by jragosta View Post

It is not a simple matter - debt can be in all sorts of forms. Some is good, some is bad, and some is both good and bad.

Rather than trying to get an education on business finance on an Internet forum, you should try to get an education through a more formal process. At least pick up a book or two. If you can't understand it from a decent book or two, trying to make sense of it from 5 paragraphs in a forum like this is a waste of everyone's time.

Gosh, you're not only poorly informed, but also arrogant.
post #27 of 35
Quote:
Originally Posted by anantksundaram View Post

Gosh, you're not only poorly informed, but also arrogant.

Really? What part of my post is poorly informed?
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post #28 of 35
Quote:
Originally Posted by jragosta View Post

Really? What part of my post is poorly informed?

For starters, why don't you explain this puzzling - actually, borderline vacuous (or zen-ish, depending on your p. o. v.) - statement: "Some is good, some is bad, and some is both good and bad."
post #29 of 35
Quote:
Originally Posted by anantksundaram View Post

For starters, why don't you explain this puzzling - actually, borderline vacuous (or zen-ish, depending on your p. o. v.) - statement: "Some is good, some is bad, and some is both good and bad."

You want me to cram an entire semester's course into a brief comment?

If you have to ask that question, you are hopelessly uninformed. The fact that you don't understand it doesn't mean that it's wrong.

In the end, though, it comes down to what the debt is used for and the type of debt. To simplify it immensely:
Good - typically, this is low risk debt that is well secured and which generates income. For example, GE's leasing business is an example. Or closer to home (literally), the small landlord who buys properties by borrowing 70-80% of the purchase price and then rents them out to pay the mortgage and other costs plus a profit.

Bad - borrowing money for operating expenses is almost always bad. If you don't have the cash to handle operating expenses, you run the risk of digging a hole that you will never escape from.

Good/Bad - lots of things in between have some good characteristics and some bad ones. For example, buying the money to buy a subsidiary. It can be good if it is properly structured and cash flow is sufficient to handle the payments even in the event of adverse consequences. Even so, there is the negative consequence that it significantly increases risk for the borrower.

Now, why don't you stick to posting about things you understand rather than insulting people who know more than you do - simply because you're too lazy to learn?
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post #30 of 35
Quote:
Originally Posted by anantksundaram View Post

Hmm.... know about new share issues?

Not that Apple needs any additional cash, but if it wanted to, it could - just as any company could - easily monetize (subject to a small signaling discount) a high share price.

All of which takes time to do, Apple can't immediately benefit from their share price, and as you have said, it they did it would discount their current shares, it is just a value placed on it by the share holders.
post #31 of 35
Don't forget to mention the fractional reserve system. You touched on it briefly but did not give it a name.

I can't put it eloquently but I would say:

One should know that everyone is shuffling around lots of money that nobody really has.
http://www.youtube.com/watch?v=KyDU4X8GSmE

What's possibly sad is the few thousand views this has while Bieber's gets millions and millions.

While I don't agree 100% with the recommendations in the video the description of money as debt is very eye-opening.

Quote:
Originally Posted by anantksundaram View Post

You posted this question to jfanning, but let me see if can throw in a couple of cents.

1) Re. GE's very high levels of debt, you probably know that half of GE is GE Capital, i.e., its financial services business. All financial services firms have very high levels of debt since that is the 'raw material' they need in making loans, which is their core business.

The level of debt attributable to GE's industrial businesses is quite low.

2) GE had a near-death experience in 2008 when GE Capital could not access any credit (recall that the short-term credit markets had completely frozen up). The US government threw GE a lifeline to keep what was then a liquidity issue spiraling downwards to becoming a solvency issue. The very existence of a company with hundreds of thousands of employees could have been at stake. Following that experience, Jeff Immelt decided to issue massive amounts of debt when the market recovered, to keep as cash on balance sheet as a rainy day fund, so that he would never have to go through that again (I've heard him say this in public forums).

As an aside, this may explain Jobs's, and hence, Apple's obsession with holding on to obscene amounts of cash!

3) As far as I can tell, GE did not 'monetize' a high share price to raise this new debt - although many companies do that, e.g., as Google did, recently, even though they had no need for extra cash - since GE's stock price was near historic lows when they did decide to tap the debt markets (in 2009-10, when the credit crunch eased).

The bottom line is, companies can monetize their high share prices to raise new equity or issue debt cheaply, although the latter is less related to the share price.
post #32 of 35
This seems to be getting more views... Money As Debt II:
http://www.youtube.com/watch?v=_doYllBk5No
post #33 of 35
Quote:
Originally Posted by nvidia2008 View Post

One should know that everyone is shuffling around lots of money that nobody really has.
http://www.youtube.com/watch?v=KyDU4X8GSmE

Thanks nvideo2008! That certainly is an informative video on the How&What about money. (it's a 5 part video, every part a little under 10 minutes, yep, worth watching!)

Thanks,
PhilBoogie
"Fibonacci: As easy as 1, 1, 2, 3..."
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post #34 of 35
Quote:
Originally Posted by PhilBoogie View Post

Thanks nvideo2008! That certainly is an informative video on the How&What about money. (it's a 5 part video, every part a little under 10 minutes, yep, worth watching!)

Thanks,
PhilBoogie

Cheers, check out the 2nd series as well as I posted above:

This seems to be getting more views... Money As Debt II:
http://www.youtube.com/watch?v=_doYllBk5No
post #35 of 35
Quote:
Originally Posted by nvidia2008 View Post

Cheers, check out the 2nd series as well as I posted above:

This seems to be getting more views... Money As Debt II:
http://www.youtube.com/watch?v=_doYllBk5No

Oooh, thanks very much for this 2nd post nvidea! I'm using some Clean-YouTube-Extension and probably missed this part II because of that. Thanks to you I get to watch it now. Well, I might download it and watch it on my iScreen while commuting/waiting...

Thanks much, appreciated!
PhilBoogie
"Fibonacci: As easy as 1, 1, 2, 3..."
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