or Connect
AppleInsider › Forums › General › General Discussion › WSJ: Apple cuts iPhone 5 component orders in half due to weak demand
New Posts  All Forums:Forum Nav:

WSJ: Apple cuts iPhone 5 component orders in half due to weak demand

post #1 of 85
Thread Starter 
Apple reportedly sent word to suppliers in December that it would be reducing parts orders for the recently released iPhone 5 on "weaker-than-expected" demand, with some orders being cut in half from original expectations. ?

iPhone5.092412.A4.jpg


Sources familiar with the matter told The Wall Street Journal that Apple cut "roughly half" of its orders for the iPhone 5's 4-inch screen and initiated a drawdown on other components orders?for the January to March quarter.?

It is unclear what exactly is to blame for the reduction but ongoing rumors point to the possible introduction of a cheaper model to the iPhone line sometime in 2013.?

The WSJ report is joined by a corresponding article from the Nikkei (via Brightwire), which claims the revised Apple orders have prompted Japanese LCD makers to look for business elsewhere. Apple is sourcing the 4-inch Retina displays used in the iPhone 5 from Japanese manufacturers Japan Display and Sharp, as well as South Korea's LG Display.

Supply of the iPhone 5 finally caught up to demand in mid-December when a number of international Online Apple Stores listed the smartphone as being in stock for the first time since its launch at the end of September.?
post #2 of 85
So is it "weaker-than-expected" demand or a potential mid-cycle refresh or the addition of a cheaper handset?

AI, you can't say one thing in the title then a completely different scenario in the article. It's confusing.

But whatever, the stock will be sure to drop tomorrow.
post #3 of 85
Look at the number here
http://www.reuters.com/article/2013/01/14/us-apple-iphone-demand-idUSBRE90D04B20130114

Apple was expected to order 65 million screens?

Considering the best iPhone quarter is only 37 mil., and that's Christmas quarter. WTH Apple to order this much in a quarter AFTER Christmas?

Makes no sense.
post #4 of 85
Quote:
Originally Posted by matrix07 View Post

Apple was expected to order 65 million screens?

Considering the best iPhone quarter is only 37 mil., and that's Christmas quarter. WTH Apple to order this much in a quarter AFTER Christmas?

Makes no sense.

Unless Apple was modeling significantly higher demand than their usually, already-conservative forecasts anticipated. Such as expecting to move 65 million units this quarter, but achieving "only" 50 million. Still blows out previous quarter sales, but also below their expectations.

Not saying that's what happened, just explaining how its possible that even with sales coming in below internal expectations it could still be a blowout quarter.
post #5 of 85
post #6 of 85
This sounds like bollocks.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

Reply

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

Reply
post #7 of 85

Is that cuts in half of what was already ordered, or cuts half of what was estimated they would order? My guess is that there will be a clarifying report in a day or two and it will turn out that this is a non story. The Jan 23 report will be quite interesting.

post #8 of 85
Market saturation?
post #9 of 85

So, the iPhone 5 have been in stock for few weeks after months unavailability due to high demand. Now all the sudden the demand is weak and Apple is doomed. Do these people read what they write?!! You know.. it is impossible to be due to supplier change, quality control issue, or many other reasons that make more sense.

 

Sure the demand now is not as high as it used to be few weeks ago but we all know Apple is the king of supply management and they are conservative with their orders.

 

Apple is Doomed™

post #10 of 85

But surely if there was a new model coming up (due to a new aggressive update schedule) they would have known that, and simply not ordered as many iPhone 5 parts in the first place, rather than order a year's worth and then cancel half the order.

post #11 of 85
There have been several stories about Apple cutting orders for this iPhone or that iPad the last 2 years.

And yet Apple still followed these reports with record quarters.

Nothing to see here.
post #12 of 85
Apple need to re-think certain things about the iPhone. I know many people have defected from Apple to Android especially for the Galaxy S line. People genuinely love the big screen size. Value for money Android is excellent but just not quite as refined as IOS.
For me ios works great on the iPad( multitasking needs a re-think) but for the iPhone it needs to change. I suppose ios was originally designed for the iPad and it's starting to show.

Still love my ios products but on the phone side Android has my head turned
Never write Apple of!.
post #13 of 85

Apple reportedly cuts back iPhone 4S orders

Sylvie Barak

11/9/2011 8:30 PM EST

SAN FRANCISCO--Apple Inc. may be cutting back on orders of components and parts for its latest iPhone 4S, due to weaker demand and shortages in the supply chain according to Chinese media reports.
 
 
 
That article was from 2011, right before the epic earnings reported in Jan 2012.lol.gif
 
Here's another article from that same time.
 
UH-OH: Apple Said To Cut Orders To Asia Suppliers On iPhone 4S Problems

http://www.businessinsider.com/apple-cutting-orders-to-asia-supply-chain-2011-11#ixzz2HvmYlA00
post #14 of 85
Quote:
Originally Posted by KingKuei View Post

Unless Apple was modeling significantly higher demand than their usually, already-conservative forecasts anticipated. Such as expecting to move 65 million units this quarter, but achieving "only" 50 million. Still blows out previous quarter sales, but also below their expectations.

Not saying that's what happened, just explaining how its possible that even with sales coming in below internal expectations it could still be a blowout quarter.

Nope. Like I said, this has nothing to do with (Apple's) Q1 quarter but Q2 (after holiday quarter). So was Apple so dumb to order 65 M. phone (before they cut it) when they don't sign up any new major carrier?
Edited by matrix07 - 1/13/13 at 11:48pm
post #15 of 85
Quote:
Originally Posted by matrix07 View Post

So was Apple so dumb to order 65 M. phone when they don't sign up any new major carrier?

You have to wonder if maybe they expected to have the China Mobile deal in the bag by now... Tim was in china just a few days ago so that negotiation may be taking longer than they hoped it would so they are cutting orders until it actually happens. If meetings last week determined that it nothing will be signed for another few months at least then no point having 30 million iPhones sat doing nothing - that's not how Tim does things and if there is one thing he knows it is supply chain management.

Assuming this assumption is even vaguely correct then these cuts in orders are nothing to do with a fall in demand in existing markets but because a massive new market failied to materialise in line with apples predicted schedule...
Edited by DaveMcM76 - 1/13/13 at 11:56pm
post #16 of 85
Quote:
Originally Posted by DaveMcM76 View Post

You have to wonder if maybe they expected to have the China Mobile deal in the bag by now... Tim was in china just a few days ago so that negotiation may be taking longer than they hoped it would so they are cutting orders until it actually happens.

I was thinking about it and it could very well be but Apple is always cautious so I still don't think they would order this much in advance unless they're pretty sure. Still it has nothing to do with "weaker demand" WSJ claimed.
post #17 of 85
Seriosly, you people don't know what's going on here? This is a bald-faced attempt to pull down expectations for a good fy Q2. That way, those in the know can keep loading up on cheap AAPL stock even after good earnings are reported for fy Q1. And when fy Q2 earnings are about to be reported, they'll pull the same trick for fy Q3, then Q4, then...well, you get the point I think. It's all about purposefully depressing the stock price so certain parties can strengthen their positions in a stock that they know is a long term winner.
post #18 of 85

Might explain why the 5 is launching among smaller carriers much faster than previous models. I mean who saw Straight Talk offering it? The 4, sure, but the 5?

Getting tired of all the "finally in stock" mentions as well. All the brick and mortar stores in Alaska were fully stocked with all colors and capacities two weeks after launch, so availability wasn't exactly an issue for this product cycle assuming other states had their shit equally together as the frozen North.

 

Either way, is this really news? Apple is going to post another record quarter, and the brand remains strong. Nuff said.

post #19 of 85
Maybe Apple is ready to move to a different supplier? So they order less components from Samsung, and move to Sharp for introduction of IGZO? Longer battery life anyone?
post #20 of 85
Quote:
Originally Posted by "Apple 
[" url="/t/155446/wsj-apple-cuts-iphone-5-component-orders-in-half-due-to-weak-demand#post_2258351"]

Exactly. I has become increasingly clear that all the major Funds and Investment Banks along with Media are all involved. No wonder why there are Occupy Wall Street action in US.

~$500 will be the new base where Apple will be going from. I expect it to push through $1000 if the overall market is good enough.
post #21 of 85
Stock will probably be down 10% tomorrow. Someone at MacRumors said a trader friend told them trading might have to be halted on the stock.

Wonder if someone at Apple will respond to this rumor? 1hmm.gif
Edited by Rogifan - 1/14/13 at 12:34am
post #22 of 85
Could it also be that in Asia everyone is moving to Samsung phones? I see it every day, it's rare to see iPhones in Hong Kong nowdays.
post #23 of 85
Quote:
Originally Posted by matrix07 View Post

I was thinking about it and it could very well be but Apple is always cautious so I still don't think they would order this much in advance unless they're pretty sure. Still it has nothing to do with "weaker demand" WSJ claimed.
Unless Apple says something the media is going to draw all sorts of conclusions. The biggest one being of course weak demand. That Android/Samsung are winning, that people want phones with bigger screens, that Apple's software is outdateted, the phone is too expensive, blah blah blah. All the bears will be out tomorrow cutting price targets and proclaiming the death of Apple. 1rolleyes.gif
post #24 of 85
Earnings call coming up, time to drive the stock down, buy up cheap and sell high.
post #25 of 85

I'm preparing the shorts right now. Easy money coming today! Everybody, get ready for the plunge!

post #26 of 85
It was the fastest iPhone rollout ever with China launch supposedly ahead of schedule. If they had 100% of expected sales then things would surely have been slower. Rumours on how difficult it is to make never quite held swathe on this one.
post #27 of 85
This article just seems to be a rehash of the last supply cut article last month
post #28 of 85

It's the typical naysayer-doomsday Apple news...I say bring it, I want to see Apple go work on something new already. iPhone is a great product line, it's time show the industry how to re-invent something else.

post #29 of 85

Typical crap journalism being used to drive the stock price down before earnings. 

post #30 of 85
Quote:
Originally Posted by Phone-UI-Guy View Post

Typical crap journalism being used to drive the stock price down before earnings. 
It's working....stock is down 5% on Frankfurt market.
post #31 of 85
Quote:
Originally Posted by Rogifan View Post


It's working....stock is down 5% on Frankfurt market.

It's going to tank big time.

Even without the iPhone Apple is underrated.

post #32 of 85
Quote:
Originally Posted by pedromartins View Post

It's going to tank big time.
Even without the iPhone Apple is underrated.
Interesting how this story leaks on Sunday night right in time to impact Monday trading. And right before earnings release. So now we get a week and a half of stories about how Apple is finished if their next phone isn't a carbon copy of Samsung's next phone. 1rolleyes.gif
post #33 of 85
Quote:
Originally Posted by Phone-UI-Guy View Post

Typical crap journalism being used to drive the stock price down before earnings. 

Yep. That article makes no logical sense. This is manipulation, pure and simple, given the timing of the release. Amazing.
post #34 of 85

Or they have new production coming on line from another manufacturer who has not provided information to the media regarding production volumes. 

 

Or Apple did not change anything and this is mis-information whether intentional with a purpose or unintentional. 

 

Or higher than expected yield rates, or would that be lower than expected defect rate? Wasn't there all sorts of news about production problems? If resolved did anyone adjust the overall production to account for this? The folks who made the propellant for the Space Shuttle's Solid Rocket Boosters found out the hard way what happens when you don't adjust your production rate in real time based on demand. 

 

Or... come on guys... we can come up with more wild speculation that is just as plausible as the "analysts" can't we? 

post #35 of 85

Not necessarily. I'd guess Apple has multiple contingency plans for new iPhone models. It could be that Plan A is to introduce a new model on an accelerated schedule, but Plan A depends on a bunch of things working out. Plan B could have been to continue with the iPhone 5 on the "old" schedule, and Apple might have placed orders under the conservative assumption that Plan B would be necessary. Could be that Apple has now determined that Plan A is feasible, so they are cutting the orders necessary to support Plan B. 

 

Another possibility is that the success of the iPad Mini (and iPad 2) has lead to Apple re-evaluating some things. For example, maybe there are quite a few people out there who just don't care about retina screens and would like a reduced price. Might Apple come out with a less expensive iPhone that uses the old 3GS screen, but maybe paired with an A5 or perhaps A6- (ie, an A6 with fewer graphics cores)? If so, that would certainly involve a change in screen orders. 

 

Quote:
Originally Posted by ascii View Post

But surely if there was a new model coming up (due to a new aggressive update schedule) they would have known that, and simply not ordered as many iPhone 5 parts in the first place, rather than order a year's worth and then cancel half the order.

post #36 of 85
Quote:
Originally Posted by ifij775 View Post

This article just seems to be a rehash of the last supply cut article last month

 

The explanation at that time was that the iPhone 5 was much harder to assemble without damage, thus production output was slower, thus incoming parts were beginning to pile up  ... so, parts orders had to be slowed down.    This would also explain why production would continue over the New Year.

 

So you're right, a question is, is this just a repeat of last month's news?

post #37 of 85
Quote:
Originally Posted by Cash907 View Post

Might explain why the 5 is launching among smaller carriers much faster than previous models. I mean who saw Straight Talk offering it? The 4, sure, but the 5?
Getting tired of all the "finally in stock" mentions as well. All the brick and mortar stores in Alaska were fully stocked with all colors and capacities two weeks after launch, so availability wasn't exactly an issue for this product cycle assuming other states had their shit equally together as the frozen North.

Either way, is this really news? Apple is going to post another record quarter, and the brand remains strong. Nuff said.
I have a friend who just got one for his wife and had to go to three stores to find a white one. I got mine mid December and had to check multiple stores for availability so I don't think your Alaskan story is representative of everywhere.
post #38 of 85
In a related story http://www.digitaltrends.com/mobile/woman-tasered-outside-apple-store/?src=Outbrain people would rather get tasered so they get several copies of iPhone for reselling overseas.
post #39 of 85
Quote:
Originally Posted by Rogifan View Post


Interesting how this story leaks on Sunday night right in time to impact Monday trading. And right before earnings release. So now we get a week and a half of stories about how Apple is finished if their next phone isn't a carbon copy of Samsung's next phone. 1rolleyes.gif

 

Perfect timing for calls due in a week. The WSJ has released negative Apple stories in past that seem suspiciously timed to earnings reports. I am sure that the SEC will react aggressively by raising their eyebrows for 5 minutes this morning...

post #40 of 85
Quote:
Originally Posted by TeeJay2012 View Post

Perfect timing for calls due in a week. The WSJ has released negative Apple stories in past that seem suspiciously timed to earnings reports. I am sure that the SEC will react aggressively by raising their eyebrows for 5 minutes this morning...
Still amazes me that people claim there's no manipulation going on with this stock. iPhone 5 has only been out for 4 months or so and just recently supply has started to catch up to demand. Yet we're supposed to believe that Apple is cutting component orders due to weak sales? 1rolleyes.gif

I love this article from The Street: http://www.thestreet.com/story/11811629/1/if-ithe-wsji-is-wrong-about-weak-iphone-5-demand-will-it-apologize-to-apple.html?puc=yahoo&cm_ven=YAHOO
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: General Discussion
AppleInsider › Forums › General › General Discussion › WSJ: Apple cuts iPhone 5 component orders in half due to weak demand