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iPhone 5 demand 'robust,' order cuts likely stem from improved yields & supplier shifts

post #1 of 66
Thread Starter 
While recent reports about iPhone 5 component orders being reduced have caused "great confusion," the reality is consumer demand for the iPhone 5 has not waned.

Analyst Shaw Wu with Sterne Agee revealed in a note to investors on Tuesday that his checks with suppliers indicate that demand for the iPhone 5 "remains robust." He's not concerned by recent reports that interpreted iPhone 5 order cuts as a sign of weak demand.

iPhone 5


Wu joins a growing chorus of market watchers who believe any order cuts for iPhone 5 components are not representative of consumer interest. Mark Moskowitz of J.P. Morgan said the reports are just "more noise" that will prompt investors to overreact, while Maynard Um of Wells Fargo said any cuts are actually "not news."

For his part, Wu believes that reduced orders for iPhone 5 components are a result of improved yields, which has required Apple to place fewer orders for components. In addition, he said supplier shift changes made by Apple have contributed to the cuts.

With so much attention on Apple's future, Wu believes Apple's guidance for its March quarter will be the "trickiest" that he can remember.

He expects Apple will give "vintage conservative" guidance, as it has traditionally done. But while in the past investors would brush aside Apple's soft guidance, this time some may view the guidance as a sign of weak demand.

As for Apple's recently concluded December quarter, Wu expects iPhone sales and gross margins will likely surprise investors to the upside. His forecast calls for sales of 47.5 million iPhones, above market consensus of 46 million to 47 million, with gross margin of 38.7 percent, versus expectations of 38.3 percent.

Sterne Agee has a price target of $840 for AAPL stock, with a "buy" recommendation for investors. Apple will report its earnings next Wednesday, Jan. 23 ??a call that is viewed by some as the company's most important in 10 years.
post #2 of 66
Buy. Hold. Put it aside, ignore the noise, and stay focused on the long horizon.
post #3 of 66
And this new news will make Apple's stock price drop some more. I'm not even going to try to come up with an explanation since the traders pushing the stock down apparently don't care about logic or reason, anyway.

Meanwhile, the WSJ who foisted the ridiculous rumor about weak sales will continue to be cited by sites around the world and continue to be believed no matter what nonsense they publish.
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post #4 of 66
It is Cramer and other pundits that are talking the stock down. This way they can make a killing by buying low on Apple stock as the stock is propelled upwards by Apple's every enlarging cash hoard and profits.

Happens all the time.

Apple is the most manipulated stock in history.

But all you have to do is to ride it - buy low, sell high.
post #5 of 66
I would say investors have listened (far too much historically) to Apple's guidance-- but that Tim Cook hasn't sand-bagged numbers quite as much as Jobs did in the past. But I am not quite sure if anything really matters with regards to Apple's stock now. They did a dividend, they have shown consistent growth, they have 25% "cash" on the balance sheet, they continue to design and sell products that sell in huge numbers...

Quite frankly, the past three months has been depressing as an AAPL stockholder. That, on what will inevitably be their best quarter ever, which has positioned them well for long-term success. I do hope they announce that they completed the $10B buyback, reducing their float by 2%. It is about the only silver lining I can see at this point.
post #6 of 66

AAPL 490

post #7 of 66
Quote:
Originally Posted by troll View Post

... iOS isn't doing much at all, thanks to the large group of people who cyber bash anyone who has anything negative to say about Apple

There is clearly room for improvement in iOS. Some decisions that were clearly made in order to create an app marketplace have outlived their useful life. Others that force a rigid structure on use of the operating system (lack of spring board settings as an example) do limit functionality for the users who want it. The need to do an unsupported jailbreak to satisfy the desires of 15-20% of your customer base is idiotic on Apple's part. It is not the Apple Fans that prevent the change though.

That said, everything I can see suggests that Android has refined a few things, but has done little to truly innovate over the last two years. Both camps are pretty much stuck in a rut of what comes next. It is almost like expecting the next version of iTunes to be an actual improvement rather than a re-packaging of something that worked... without any real improvements.

The only things I see iOS really needing to fix is the whole "settings" interface, the lack of alternative input methods, and a native flashlight that chan be activated without using an app...
post #8 of 66
Quote:
Originally Posted by jragosta View Post

And this new news will make Apple's stock price drop some more. I'm not even going to try to come up with an explanation since the traders pushing the stock down apparently don't care about logic or reason, anyway.

Meanwhile, the WSJ who foisted the ridiculous rumor about weak sales will continue to be cited by sites around the world and continue to be believed no matter what nonsense they publish.

I was just kidding, but I guess I was right, anyway. AAPL down another couple percent right now.

Totally insane.
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Gatorguy 5/31/13
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post #9 of 66
Quote:
Originally Posted by aaarrrgggh View Post


There is clearly room for improvement in iOS. Some decisions that were clearly made in order to create an app marketplace have outlived their useful life. Others that force a rigid structure on use of the operating system (lack of spring board settings as an example) do limit functionality for the users who want it. The need to do an unsupported jailbreak to satisfy the desires of 15-20% of your customer base is idiotic on Apple's part. It is not the Apple Fans that prevent the change though.

That said, everything I can see suggests that Android has refined a few things, but has done little to truly innovate over the last two years. Both camps are pretty much stuck in a rut of what comes next. It is almost like expecting the next version of iTunes to be an actual improvement rather than a re-packaging of something that worked... without any real improvements.

The only things I see iOS really needing to fix is the whole "settings" interface, the lack of alternative input methods, and a native flashlight that chan be activated without using an app...

 

Android still has a lot of refinements to make. It's still lacks a lot of smoothness that iOS has had since day 1.

 

iOS needs a better settings interface, but as you said, Apple needs to bring some innovation that none of us are expecting with this next release.

post #10 of 66
Quote:
Originally Posted by NelsonX View Post

AAPL 490

 

At this point, I'd suggest wait till after they announce the earnings before trying to buy on 'dips'. Technically AAPL has been doing terrible. 

post #11 of 66
Ah so this is why Apple stock is down $10 this morning. 1rolleyes.gif
post #12 of 66
Quote:
Originally Posted by jragosta View Post


I was just kidding, but I guess I was right, anyway. AAPL down another couple percent right now.

Totally insane.


The first group yesterday were the hedge funds shorting AAPL. Today it's the smaller investors who had a sleepless night after hearing that Apple was going bankrupt.

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post #13 of 66
anantksundaram said: "Buy. Hold. Put it aside, ignore the noise, and stay focused on the long horizon."

While Apple has made many a people lots of money, I'm not sure a company who's entire value is in selling trendy, expensive and, to some extent superfluous, gadgets to be a sound long horizon bet. I'm not saying investing in Apple is foolish, but no one should do it blindly and without constant monitoring. Many 'a trends have burst in the past and caused investors to loose everything.
post #14 of 66

The thing that stinks from the supply so call "cuts" is they said they cut from 65 millions screens.   But 65 millions doesnt make any sense at all, they wont even sell that many in the holiday quarter, so ordering this amount in Q1 is pure BS. Even of you cut that in half its still a good number for Q1, especially with some China sales already done in Q4.

 

 

Update:

 

Here are last year numbers for calendar Q1 or fiscal Q2:

 

Quote:
The Company sold 35.1 million iPhones in the quarter, representing 88 percent unit growth over the year-ago quarter. Apple sold 11.8 million iPads during the quarter, a 151 percent unit increase over the year-ago quarter. The Company sold 4 million Macs during the quarter, a 7 percent unit increase over the year-ago quarter. Apple sold 7.7 million iPods, a 15 percent unit decline from the year-ago quarter.
 

 

 

Its possible that Apple assumed they 5 would sell 2 times more than the 4s and order accordingly.  But seriously even my cat knows they wont even come close. Lets hope Apple gets its wake up call and lignten up that one size phone wont cut it anymore when youre no longer top of the line and are charging a premium.  Android as leap over ios now and some Android phones are more cutting edge than the iphone. Not saying the iphone 5 is bad, but it sure aint the only good phone with a good ecosystem out there.

 

 

Edited by herbapou - 1/15/13 at 7:40am
post #15 of 66
Quote:
Originally Posted by NelsonX View Post

AAPL 490

 

Sadly (or gladly, depending on your frame of mind), the Naz is overbought and AAPL is oversold... but if the Naz sells off (following technical trends), it could add more pressure to continue selling AAPL.

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post #16 of 66
jragosta said ...since the traders pushing the stock down apparently don't care about logic or reason, anyway.

The traders most certainly do care about logic and reason, they're just playing a different game than the one you think they are. The reality is that they make money on the way up AND on the way down. Famous traders like Jim Cramer have, quite literally, admitted to seeding news organizations with false information to push a stock up or down after they've taken a position either way. The whole stock market has become a stinking cesspool of deceit and manipulation.
post #17 of 66

Revenge will be sweet when Apple announces results.  Their blow out earning will blow the pants off all the apple-haters and apple shorts

post #18 of 66
first of all, did anyone confirm the alleged order of 65MM lcds for the march qtr? keep in mind apple has never sold more than 50MM iphones in any qtr, why would they order so much for a historical low-end qtr (after the holiday qr). It's pure bunk and i hope the analysts get arrested for securities fraud.
post #19 of 66
Quote:
Originally Posted by drobforever View Post

 

At this point, I'd suggest wait till after they announce the earnings before trying to buy on 'dips'. Technically AAPL has been doing terrible. 


Well, I just covered my shorts from yesterday! Easy money! 1smoking.gif I don't think AAPL is going too far down, but I don't buy yet.

post #20 of 66

This stock has been beaten down so hard on just rumours so badly. Apple will announce blow out numbers next week, but whatever they say their forward guidance will be will be fuel for the naysayers to push this stock down to $450. I only wonder at what point will they finally put money back in, change their tune, and have the stock make a run at $800.

 

On another note, I got a MotoDroidGalaxySMAXXIncredible 9" phone last week, I swear it's made by Mattel or Hasbro. All plastic, wind up crank on the back, etc. The screen kept blinking and when I brought it into the Microsoft SmartGuy, he said it was normal. The blinking is a new feature designed to conserve battery life. No, this doesn't sound ridiculous at all.

post #21 of 66
It don't exactly help with an interpreted claim that Apple is buying loads of faulty stuff, but the newer stuff is more likely to work (yields)
post #22 of 66
Perhaps the WSJ needs to go the way of the other Murdock rag. I don't see any difference between the two.
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post #23 of 66
Quote:
Originally Posted by Rabbit_Coach View Post

My advice: take the Blackberry. I think by now they give you a lolly if you take one for free.

lol(ly)
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post #24 of 66
Quote:
Originally Posted by tobeornottobe View Post

Revenge will be sweet when Apple announces results.  Their blow out earning will blow the pants off all the apple-haters and apple shorts

 

But then the analysts will say that Apple's guidance for Q2 isn't good enough...

post #25 of 66
Same bullshit last year . Now it happened again .
post #26 of 66
Quote:
Originally Posted by jameskatt2 View Post

It is Cramer and other pundits that are talking the stock down. This way they can make a killing by buying low on Apple stock as the stock is propelled upwards by Apple's every enlarging cash hoard and profits.

Happens all the time.

Apple is the most manipulated stock in history.

But all you have to do is to ride it - buy low, sell high.

 

You are right....

 

First they over hype Apple to drive it up to a ridiculous level.  Then trash Apple to drive it down to a ridiculous level and make a killing in both directions....

post #27 of 66
Quote:
Originally Posted by tobeornottobe View Post

Revenge will be sweet when Apple announces results.  Their blow out earning will blow the pants off all the apple-haters and apple shorts
Read the post above yours. There are three basic ways to make money on the stock market: Bulls, Bears, and Volatility. The volatility players are neither bulls nor bears, but take advantage in any swings, effectively amplifying them.

I'm torn as to what the stock market should be... if anything. It's a great way to change the value of your net worth... just no telling if it will be up or down.
post #28 of 66
Quote:
Originally Posted by aBeliefSystem View Post

It don't exactly help with an interpreted claim that Apple is buying loads of faulty stuff, but the newer stuff is more likely to work (yields)
Hopefully, the newer items improve margin for Apple. Hopefully, they shed the most expensive supplier as other suppliers have ramped up to meet demand at Apple's target price.
post #29 of 66
The stock going down this much is just silly. The only thing you can do that makes sense is to buy more of it. They have so much money it is getting a bit surreal. I don't see how this quarter is not going to be a blowout. All this talk about iPhone 5 overshadows the new iPads and iPods that should have also done very well. I know iPhone 5 is like half their revenue or more, but damn if they didn't sell a ton of everything else to make up any possible gap in iPhone. Off to go see how much free cash I have piled up in my 401K to dump on some more shares. 1smile.gif
post #30 of 66
Quote:
Originally Posted by aaarrrgggh View Post

I would say investors have listened (far too much historically) to Apple's guidance-- but that Tim Cook hasn't sand-bagged numbers quite as much as Jobs did in the past. But I am not quite sure if anything really matters with regards to Apple's stock now. They did a dividend, they have shown consistent growth, they have 25% "cash" on the balance sheet, they continue to design and sell products that sell in huge numbers...

Quite frankly, the past three months has been depressing as an AAPL stockholder. That, on what will inevitably be their best quarter ever, which has positioned them well for long-term success. I do hope they announce that they completed the $10B buyback, reducing their float by 2%. It is about the only silver lining I can see at this point.

I don't want to bum you out, but I think that buyback was just to avoid dilution from having to issue shares for stock-based compensation. I would like to see them announce a real (big) buyback that would reduce their float.
Quote:
Originally Posted by Fithian View Post

Perhaps the WSJ needs to go the way of the other Murdock rag. I don't see any difference between the two.

It seems to me financial publications should be leading the crusade against bogus stock manipulations stories, rather than promoting them. The perception that stocks in general (and AAPL in particular) are being manipulated by powerful unnamed entities turns off individual investors from wanting to own stocks. One of the first things a person does when they decide that stock market investing is too risky is to cancel their subscriptions to financial publications. Abetting stock manipulation is self-destructive for the WSJ, Reuters, IBD, Barron's, Forbes, etc.
post #31 of 66
Quote:
Originally Posted by jameskatt2 View Post

It is Cramer and other pundits that are talking the stock down ...

 

The current manipulation attempt, (successful, I would say), in the WSJ by Nomura's Stuart Jeffery is at least consistent with their other attempts at predicting trends. In July of 2011, they were among those predicting that Microsoft 8 would be a 'game changer' in 2013 and that Ice Cream Sandwich would unite all the Android strands and address all the problems that have dogged it, wresting tablet control from Apple. They also predicted that PC makers would be the ones to take control of the tablet market, elbowing out the smartphone makers. ... right ...

 

Not sure why this person would be cutting iPhone numbers for the quarter, and I trust Apple to keep a watchful eye on profit margin, but no doubt that margin pressure is out there. 

 

Like all of these firms, Nomura has a bit of a bias and it's all there in their past articles. Just keep it in mind when you read their stuff. 

post #32 of 66
My daddy told me, when I told him I was thinking of investing... to look for a company that was well-respected by current users, offered a quality product that was well-made, beautifully designed and useful, that kept innovating and improving, offered a dividend, had cash in the bank, a good sales platform, advertised smartly, offered top-notch customer support, was global in its distribution and admiration, and had brand loyalty of its customers.

The only company I could think of: Apple
post #33 of 66
Originally Posted by extremeskater View Post
Well I have to say while I didn't expect AAPL to hit 1000.00 this is starting to become upsetting. Not sure about anyone else here but I kind of felt 500.00 was a water mark and if we dropped below that the situation could very well get even worse. Hope I am wrong.

 

$130,000,000,000. Cash.

 

They're fine. They have more physical money in their coffers than some countries, namely the one in which they're based.

Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
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Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
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post #34 of 66
Quote:
Originally Posted by Tallest Skil View Post

$130,000,000,000. Cash.

That's no longer true. They've converted much of their cash to longer term investments. IIRC, they're at $30-40 B in cash and about $90 B in long term investments.
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post #35 of 66
Quote:
Originally Posted by Tallest Skil View Post

 

$130,000,000,000. Cash.

 

They're fine. They have more physical money in their coffers than some countries, namely the one in which they're based.

 

Apple is *obviously* fine, and is quite possibly in store for a massive quarter, but there aint no cure for stupid:

 

http://www.neowin.net/news/get-out-the-bandages-apples-stock-is-bleeding-value

post #36 of 66
Quote:
As for Apple's recently concluded December quarter, Wu expects iPhone sales and gross margins will likely surprise investors to the upside. His forecast calls for sales of 47.5 million iPhones, above market consensus of 46 million to 47 million, with gross margin of 38.7 percent, versus expectations of 38.3 percent.

 

This is horse crap. This is Wall Street `revising and revising' their numbers because lets face it, each time they pick a target Apple blows right passed it. This consensus being tossed around is a series of revised consensus to drive sales to absurd levels and thus force the price down because not even Apple can surpass those levels.

 

Wall Street does not like one company dominating any of their indices. They rode that wave with Microsoft and still keep beating that dead horse. And yes, Cramer is a joke. This is the same former Hedge Funder owner who talked about jumping on Apple at $50 when the guy talked smack about Apple for several years before the rest of the industry forced him to call it the darling of the tech world. Then suddenly he's always been in on Apple. Hell, two weeks ago he was all in and suddenly in an orchestrated effort he's now on the air talk about how unattractive its been for some time. My rear end.

 

This is nothing more than a legalized fraud con system.

post #37 of 66
Originally Posted by jragosta View Post
That's no longer true. They've converted much of their cash to longer term investments. IIRC, they're at $30-40 B in cash and about $90 B in long term investments.

 

So when was it that Apple got rid of ONE HUNDRED BILLION DOLLARS that we didn't have an article about it?

Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
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Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
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post #38 of 66
Quote:
Originally Posted by Tallest Skil View Post

 

So when was it that Apple got rid of ONE HUNDRED BILLION DOLLARS that we didn't have an article about it?

 

Hmmm... I added up jragosta's numbers and still got $120 - $130 billion.

 

$30 billion liquid...  $90-$100 billion invested long term

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post #39 of 66

Something isn't squaring with these Apple reports, relative to Android market growth:

 

http://www.patentlyapple.com/patently-apple/2013/01/samsungs-copying-apple-now-extends-to-major-nda-paranoia.html

 

Cited from Korea's Electronic Times:

 

Quote:
Samsung Electronics, while in the process of developing a next-generation smartphone, has entered into a series of non-disclosure agreements (NDA) with its subcontracts. The aim is to prevent the leakage of information related to its new products amid intensifying patent competition with Apple over design and product specification. In another Electronic Times report this morning, they're reporting that financial information provider FnGuide is stating that Samsung Electronics' turnover and operating profits are expected to decrease 4.93% and 5.88% quarter on quarter to 53,240.6 billion and 8,282.9 billion won in Q1 of this year, respectively. The net profit is estimated to decline 4.58% to 6,804.7 billion won, too.

 

Samsung owns the Android Market. People aren't buying less smartphones. Global sales are expanding.

post #40 of 66
the WSJ article – front page! – is stupid beyond belief. iPhone sales in the last year by quarter were 37M, 35M, 26M, and 27M. plus about 3M-5M iPod touch sales per quarter. so just to repeat last year’s sales for its first two quarters – the period that current old+new orders would cover until the next model is possibly launched in the early Spring – Apple would need 80M screens. add perhaps 25% growth in sales, it would need 100M.
assuming a typical 55M/45M split between the two quarters, at least 65M of those screens have already been manufactured, leaving 35M to go.
so yes, Apple’s initial orders could possibly have totaled 65M, and it next order would indeed be almost 1/2 less at 35M. that would be consistent with the raw numbers in the first report the WSJ used as its jump-off.
but this has nothing to do with “slow sales,” unless one would claim that 25% YOY sales growth is somehow a “slowing.” it is indeed merely parts inventory management and no more.
if i can do the very very very simple math above, anyone can. the failure of all the so-called “journalists” (starting with the rapidly decaying WSJ) and web “pundits” (hello, The Verge) to get even this far is just utterly pathetic. this sorry episode perhaps illustrates better than ever the preposterously lame state of tech “reporting” today. it’s about 85% rumor hit-whoring or cynical spin-doctoring.
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