iPhone 5 demand 'robust,' order cuts likely stem from improved yields & supplier shifts - Page 2

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.

 

It's pretty much been this way a while now.  $10B in cash.  $15-20B short term securities (less than 1 year).  The remainder in long term securities that mature past that 12 month mark...mostly ones that mature between 1-5 years.

 

So when you look on Apple balance sheet on Yahoo you see $29B "cash" (actually cash, cash equiv + short term) and $92B long term investments.

 

http://finance.yahoo.com/q/bs?s=AAPL&annual

 

What number has been growing like crazy?  

 

Long term:  $25B in Sept 2010, $55B in Sept 2011, and $92B in Sept 2012.

 

But most folks count all this as "cash".  These long term securities are all very safe and could be sold if necessary if Apple wanted to buy something BIG.

They didn't get rid of $100 B nor did anyone claim that they did. They converted $90 B in cash and short term investments into long term investments. This should have happened a long time ago - they averaged less than 1% return on their cash.

It really amazes me how quick you are to jump into throwing out your opinion on so many topics that you clearly don't understand.

One error in your math. It's probably more like 95% in your last line.

 

There's also the fact that the iPod touch uses the exact same screen component as the iPhone 5.  And as we all know, iPod sales are highly seasonal, the big season having just ended.  I'd say that's another factor in addition to shifting away from (legacy) LCD touch panel suppliers.

I don't feel Apple's stock is ever going to reach $840. I think the company's market value will continue to decline until it settles around the $200-250 billion mark. I hope that I'm wrong though.

Companies are not required to make public announcements when they move funds around this way. The information has to be gleaned from places like quarterly reports.

Note that the decline is quarter-on-quarter. Samsung probably sells more during the holiday quarter, just like Apple.

 

Sorry, I mean "got rid of" in the "no longer cash" sense. Where did we hear about these investments?

 

It "happened" in 2010.  Sorta.  They've been very steady as you can see in the chart below in terms of cash/short term investments from $24.49B in 2008 to 29.13B in 2012.

 

http://www.marketwatch.com/investing/stock/aapl/financials/balance-sheet

 

You can make the case that based on cash flow it REALLY started happening in 2011 as everything that matured ($69B) as well as everything they made ($37B) got pumped back into investments ($102B). 

 

http://www.marketwatch.com/investing/stock/aapl/financials/cash-flow

 

It's very very impressive but contrary to some opinions around here I think that the current mound of cash is healthy and not too much if they decide they need to vertically integrate.  It all depends on TSMC, GlobalFoundries, UMC, Sharp, etc.  The CapEx involved in chips and advanced display manufacturing is huge.

 

You've never read the quarterlies or annual report?

 

Just a note that Samsung Electronics makes a LOT of different products, including flat panels, printers, laptops, and of course it's the world's largest memory chip maker.   So if flat screen TV and memory chip sales fall off, its overall profits decrease.

 

What I think you wanted to compare with, is their Telecom and phone division, which usually has been reporting double the profits of last year. 

 

Carry on.

Exactly how is yield affecting units ordered???

When you order 100K chips or screens from a supplier, it means 100K good units. Just because the supplier has better yields does not mean you would order fewer units. So whoever came up with that stupid "explanation" is smoking something.

iOS 4 on the iPhone 3G was anything but smooth...

 

I'd disagree about Android.  They've been more innovative, at the expense of refinement.  But the key to Android is the slightly more open API - being able to change defaults and system settings that you can't on iOS.  You can even have a Google-services-free Android phone if you so desire...

If history is any indicator, this is probably the case.  Doesn't mean Apple the company is doing badly, but I think the strait up stock price movement is a thing of the past.

See posts #42 and #50.

I actually had a 3G with iOS 4 and it was slow, but still inheritantly "smooth".

 

I was just playing with a friend's Nexus 7 and although it's fast, the screen wasn't always responsive and the lack of rubber-banding is also a turn off that makes the device feel archaic. 

 

Also all of the apps are stretched phone apps that look pixelated on the screen. Playing games wasn't entirely enjoyable because sometimes my touch command would work, other times it would trigger something else, or not respond at all.

 

Maybe it's not a software issue, but a hardware one? Either way the lack of rubber banding does make the device seem less smooth...

And especially your post #49 which shows the history.

There does, however, appear to be an error in that table. Look at the rows for "total long term investments" and "other long term investments". For most years, the two rows are the same, but there's a single year where one row is zero and the other is not. I'm guessing it's a typo, although it doesn't have to be.

http://www.gizmodo.co.uk/2013/01/yes-apple-is-cutting-down-iphone-5-orders-and-it-isnt-giving-any-explanation/


New York Times confirms original story

Wow. yet another case of the stock market ignoring reality.

When the rumors came out of decreasing demand, it was obvious that was a fallacy due to Apple's superior sell out numbers compared to any other smartphone manufacturer.

They have the single most successful product.

And that isn't even mentioning the iPad which is also the single most successful in its market.

Buy now before it goes up to $700 in the Summer.

This whole thing smells of stock manipulation and someone either inside Apple or elsewhere is going to profit big.

But, even playing as I am with "house money", sooner or later a rigged game just get's tiresome.

 

The linked NYT story is from _yesterday_ (ie, the same as the original story)

 

This may well be a significant story, but it's being reflected off every surface of the echo chamber.

LOL! First you post an article from an Apply fanboy analyst for JP Morgan denying the reports from WSJ and Nikkei, and then when those reports turn out to be legit, you post this article excusing the cuts on "improved yields?"

 

You're really unbelievable, AI.

Well, a NYTime hatchet piece repeats the same rumor. If you want to accept that as confirmation, feel free.

Not to mention that the NYTimes author doesn't understand 'quiet period'. Yes, there's an SEC-mandated period in some circumstances, but that's not what is being discussed here. There's also an informal, non-required quiet period that most companies follow before announcing results to prevent inadvertent release of material information.

Not that it matters. Apple doesn't comment on rumors. Period. The fact that they aren't commenting on this one doesn't mean a thing.

what is really great about this total BS rumor story is that it has flushed all the Apple-bashers out into the open as they hungrily pile on with their negative spin. even some commenters above.

 

when Apple announces its very good if not blowout iPhone sales next week, they will all then have shit all over their faces. of course they will proffer every kind of BS excuse they can think up or claim they will still be proved right ... some day.

 

what should we do in response? well, since no one gets fired any more in techland for just being an idiot or whore, we should just laugh at them as loud and long as possible and never let them forget this one.

Bearing in mind the hammering the stock is taking and the money that's costing then they should be commenting.

No they won't. They'll simply ignore it and generate more fabricated rumors about why NEXT quarter will be terrible.

Apparently, they don't think so. Somehow, I suspect that they know more about running a multibillion dollar company than you do.

There are lots of reasons. One could be fear of stepping across the line and releasing material information that they can not legally release before the earnings report. Another one is that they may not want to start a trend of commenting on rumors - because that can lead to a full time effort (which is never successful, anyway) to stop out rumors. Or maybe they're just happy that it will cost them less money to buy back shares. I don't know why they haven't commented, but I'm sure they have a reason.

It's part of the 'status quo' for Apple, and has been since 1981. They will comment as scheduled on 23 Jan, otherwise there is no substantive action available to Apple that would prevent this activity.

 

… except for the rumour that Apple will be switching to WinPhone 8 by 3Q 2013.

 

Cheers