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Verizon numbers hint Apple may have shipped more than 50M iPhones last quarter

post #1 of 85
Thread Starter 
The latest iPhone activation data from Verizon suggests Apple may have shipped more than 50 million iPhones during the 2012 holiday season.

Verizon announced earlier Tuesday that the iPhone accounted for 6.2 million of the 9.8 million smartphones the carrier activated last quarter. With nearly two-thirds of new smartphone activations at Verizon, it was the best performance yet for the iPhone on the largest carrier in the U.S.

Over the past six quarters, Verizon has accounted for 11 percent of Apple's total iPhone shipments, analyst Brian White of Topeka Capital Markets noted on Tuesday.

iPhone 5


If that 11 percent holds for the December quarter, it would mean Apple shipped a whopping 56 million iPhones during the three-month period. Even if Verizon accounted for 12 percent of iPhones shipped in the quarter, White noted, it would still result in 51 million iPhones shipped.

The 6.2 million iPhones activated by Verizon were double the 3.1 million the carrier activated in the third quarter of calendar 2012.

Verizon also announced that the iPhone 5 accounted for about half of the iPhones activated in the quarter, which suggests strong sales for the iPhone 4S and iPhone 4.

Total smartphone activations were up 44 percent quarter over quarter at Verizon, with the iPhone accounting for 63 percent of all smartphone activations. That's much higher than the 47 percent average the iPhone has had with Verizon over the last five quarters, White said.

In comparison, in the 2011 holiday season, the iPhone accounted for 56 percent of smartphones activated at Verizon following the launch of the iPhone 4S.

Separately, Brian Marshall of ISI Group said Verizon's iPhone activations are supportive of his estimate of 48 million iPhones in the December quarter. And Amit Daryanani from RBC Capital Markets also said Verizon's numbers bode well for his projection of more than 46 million iPhones.

Earlier this month, rival carrier AT&T announced it had sold 10 million smartphones in the holiday quarter. At least 8 million of those are expected to be iPhones.

Daryanani sees Apple having sold more than 16 million iPhones in the U.S. alone during the quarter, with 8.1 million at AT&T and another 1.7 million at Sprint.

He expects domestic catalysts for the iPhone will slow going forward, with the addition of carrier T-Mobile later this year representing the last catalyst in the U.S. for the current iPhone lineup. But Daryanani also believes the international market will continue to spur growth for Apple.
post #2 of 85
I hope tmr can make all bullshitters shut up like wall shit journal
post #3 of 85
50 million? That's it?

Android had 50 million activations every minute.

Apple can't compete without a 6", 4K phablet...and a stylus...
post #4 of 85
AAPL started the day with a modest increase, but after this news came out, it started dropping.

I guess nothing is going to sway the debbie downers.
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Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
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post #5 of 85
Perfect day to sell off the stock...? Wtf
post #6 of 85
Quote:
Originally Posted by jragosta View Post

AAPL started the day with a modest increase, but after this news came out, it started dropping.

I guess nothing is going to sway the debbie downers.


As someone else noted... the 4 and 4S numbers will be seen as affecting margins.

 

Cook's forward statement will be examined letter by letter today.

 

I keep thinking that Apple has a couple of surprises that will be announced in this current quarter and I'm wondering if there will be any hints to that end.

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post #7 of 85
Doooom i tell you. Seriously why are these rumored "reduction in parts orders" aways interpreted as lower shipments and sales, instead of Apple's improved ability to produce more phones efficiently at launch. Remember when the first few iPhone models were released, there was always a severe shortage. Now with each new model, there is never much problem with availability and the iPhone continues to put up great sales numbers.
post #8 of 85
Quote:
Originally Posted by island hermit View Post


As someone else noted... the 4 and 4S numbers will be seen as affecting margins.

 

Cook's forward statement will be examined letter by letter today.

 

I keep thinking that Apple has a couple of surprises that will be announced in this current quarter and I'm wondering if there will be any hints to that end.

I personally don't see this as a huge threat.  The production costs of the 4 and 4s should be much lower now.  They have been producing this style of phone for over 2 years now.  Also the component cost for the older components should be coming down to compensate for the lower cost of the phone.

post #9 of 85
Quote:
Originally Posted by island hermit View Post


As someone else noted... the 4 and 4S numbers will be seen as affecting margins.

I doubt it. It undoubtedly costs a lot less to make a 4 or 4S than a 5. And the selling price difference is not that great (say, $649 vs $749). It may even be that the margins are greater on the older models (but revenue is lower, of course).
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post #10 of 85
Quote:
Originally Posted by raymondinperth View Post

I hope tmr can make all bullshitters shut up like wall shit journal

 

What I find amusing is that this stuff happens all the time (stock manipulation), and it's black & white that this is what it was, and it's completely, 100% illegal, but despite this and the fact that it happens all the time and a lot of "big names" and important people are involved in it ...  

 

... no one is ever charged, arrested, or even questioned over it.  Ever.  

 

This kind of corruption is basically "built-in" to the capitalist model, but we all pretend it isn't and that the business world is squeaky clean except for a few "losers" at the bottom somewhere when in fact it's the best and brightest at the top that do these things. It's practically the basis of how business works, and everyone who's involved in "the game" knows it.  

 

How ridiculous is a society who's published works, books, and laws say one thing, the reality is the exact opposite, and not one person has the guts or the temerity to stand up and point out that the Emperor is stark f*cking naked.  I honestly don't know how anyone involved in the stock market, lives with themselves or sleeps at night.  

post #11 of 85
Originally Posted by Gazoobee View Post
What I find amusing is that this stuff happens all the time (stock manipulation), and it's black & white that this is what it was, and it's completely, 100% illegal, but despite this and the fact that it happens all the time and a lot of "big names" and important people are involved in it ...  

 

And regular people actually pretend it isn't happening.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

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Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply
post #12 of 85
Quote:
Originally Posted by raymondinperth View Post

I hope tmr can make all bullshitters shut up like wall shit journal

 

 

What I find amusing is that this stuff happens all the time (stock manipulation), and it's black & white that this is what it was, and it's completely, 100% illegal, but despite this and the fact that it happens all the time and a lot of "big names" and important people are involved in it ...  

 

... no one is ever charged, arrested, or even questioned over it.

 

This kind of corruption is basically "built-in" to the capitalist model, but we all pretend it isn't and that the business world is squeaky clean except for a few "losers" at the bottom somewhere when in fact it's the best and brightest at the top that do these things. It's practically the basis of how business works, and everyone who's involved in "the game" knows it.  

 

How ridiculous is a society who's published works, books, and laws say one thing, the reality is the exact opposite, and not one person has the guts or the temerity to stand up and point out that the Emperor is stark f*cking naked.  I honestly don't know how anyone involved in the stock market, lives with themselves or sleeps at night.  

post #13 of 85
Watch Apple's stock tank if they announce 49.9 million phones sold- from a company that wasn't in the phone business a few yrs ago.

Who am I kidding, it will probably tank or barely move regardless of what they announce.
post #14 of 85
Quote:
Originally Posted by Gazoobee View Post

What I find amusing is that this stuff happens all the time (stock manipulation), and it's black & white that this is what it was, and it's completely, 100% illegal, but despite this and the fact that it happens all the time and a lot of "big names" and important people are involved in it ...  

... no one is ever charged, arrested, or even questioned over it.  Ever.  o stand up and point out that the Emperor is stark f*cking naked.  I honestly don't know how anyone involved in the stock market, lives with themselves or sleeps at night.  

That's absolutely false. There have been a number of charges and arrests for stock manipulation. There have even been convictions:

http://www.sunshineslate.com/2012/02/09/convictions-south-florida-stock-manipulation/

http://en.wikipedia.org/wiki/Viola_R._MacMillan

http://www.csmonitor.com/USA/Justice/2010/0129/Ex-SEC-lawyer-convicted-in-stock-manipulation-scheme

http://www.justice.gov/opa/pr/2010/May/10-crm-515.html

That's just a small sample.

It's hard to get a conviction, but certainly not impossible. And your claim that no one has ever been charged, arrested, or even questioned is absolutely false.
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post #15 of 85
Hold on here. Are we supposed to take "shipped" as meaning "sold" when speaking about Apple? I thought we poke fun at "shipped" numbers when we talk about Google/Android/Samsung phones because of them stuffing the channel to make it sound like they "sold" more than they actually did but now when talking about Apple we're supposed to be using the term "shipped" also? Did I miss something?

Why does Apple bashing and trolling make people feel so good?

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Why does Apple bashing and trolling make people feel so good?

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post #16 of 85
Quote:
Originally Posted by jragosta View Post

Quote:
Originally Posted by Gazoobee View Post

What I find amusing is that this stuff happens all the time (stock manipulation), and it's black & white that this is what it was, and it's completely, 100% illegal, but despite this and the fact that it happens all the time and a lot of "big names" and important people are involved in it ...  

... no one is ever charged, arrested, or even questioned over it.  Ever.  o stand up and point out that the Emperor is stark f*cking naked.  I honestly don't know how anyone involved in the stock market, lives with themselves or sleeps at night.  


That's absolutely false. There have been a number of charges and arrests for stock manipulation. There have even been convictions:

...


It's hard to get a conviction, but certainly not impossible. And your claim that no one has ever been charged, arrested, or even questioned is absolutely false.

Exactly. It is not illegal for an analyst to send a memo to their investors saying this or that about their checks with up stream component supply contacts either positive or negative. Attempted stock manipulation through the media or press releases is not the same as insider trading which involves prior knowledge of a circumstance and then advising or trading stock based on that knowledge to leverage a financial advantage.

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post #17 of 85
Quote:
Originally Posted by jragosta View Post


That's absolutely false. There have been a number of charges and arrests for stock manipulation. There have even been convictions:
 

 

Has anybody ever been convicted of Apple stock manipulation though? 

 

If some people are manipulating penny stocks, it makes sense that Apple would be very lucrative for certain criminals.

post #18 of 85
Quote:
Originally Posted by Dickprinter View Post

Hold on here. Are we supposed to take "shipped" as meaning "sold" when speaking about Apple? I thought we poke fun at "shipped" numbers when we talk about Google/Android/Samsung phones because of them stuffing the channel to make it sound like they "sold" more than they actually did but now when talking about Apple we're supposed to be using the term "shipped" also? Did I miss something?

No, we shouldn't accept shipped as sold. Nothing to fear because we'll the number sold tomorrow.

"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

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post #19 of 85
Originally Posted by Slurpy View Post
Who am I kidding, it will probably tank or barely move regardless of what they announce.

 

Tanks after every call, regardless of content. If Apple announced they had cured all forms of all cancers and was distributing the cure worldwide for $50 at a 500% profit per shot, it would tank.

 

How quickly it comes back up afterward will tell us how Wall Street really felt.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply
post #20 of 85
Quote:
Originally Posted by island hermit View Post


As someone else noted... the 4 and 4S numbers will be seen as affecting margins.

 

Cook's forward statement will be examined letter by letter today.

 

I keep thinking that Apple has a couple of surprises that will be announced in this current quarter and I'm wondering if there will be any hints to that end.


Let's hope it keeps dropping.

Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

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Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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post #21 of 85
Quote:
Originally Posted by Dickprinter View Post

Hold on here. Are we supposed to take "shipped" as meaning "sold" when speaking about Apple? I thought we poke fun at "shipped" numbers when we talk about Google/Android/Samsung phones because of them stuffing the channel to make it sound like they "sold" more than they actually did but now when talking about Apple we're supposed to be using the term "shipped" also? Did I miss something?

I think the term shipped in Apple's case was just sloppy writing - as they don't report "shipped" but rather sold units, if I remember correctly.  It's either shipped as in shipped units that Verizon bought or sold units that Verizon purchased.  Apple does not play around with the shipped vs sold crap because that would be pointless.  Their issues usually revolve around being able to produce enough of any given product in order to fulfill demand - a good problem to have, but a problem nonetheless.  This is where Apple gets punished by analysts in a way that other companies don't seem to.  If they sell more than they can make, it's a problem.  If they make enough to meet demand, then it's deemed the product isn't selling well enough.

post #22 of 85
It makes me sick that Wall Street makes predictions about how many unis of Apple stuff should be sold and when things don't pan out WS says Apple fails. To me that's sick butnthisis what happens to public companies.
Look at them a** clowns at HP. They were kinda like Apple back in the day and now they have compromised themselves. Cheap printers just to gain market share. But today that isn't even enough. It is never enough!!!
post #23 of 85
Quote:
Originally Posted by Tallest Skil View Post

Tanks after every call, regardless of content. If Apple announced they had cured all forms of all cancers and was distributing the cure worldwide for $50 at a 500% profit per shot, it would tank.

 

How quickly it comes back up afterward will tell us how Wall Street really felt.

I think it is a little more complicated than just Apple bashing. If you take a look at a 3 month chart of AAPL vs IXIC you'll probably see a trend that is clearly not based on the tired old adage of 'buy on rumor, sell on news'. AAPL stock price is under pressure from technicals not fundamentals.

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Life is too short to drink bad coffee.

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post #24 of 85
@macdaddykane "Doooom i tell you. Seriously why are these rumored "reduction in parts orders" aways interpreted as lower shipments and sales, instead of Apple's improved ability to produce more phones efficiently at launch. Remember when the first few iPhone models were released, there was always a severe shortage. Now with each new model, there is never much problem with availability and the iPhone continues to put up great sales numbers."

I'm sorry, what magical production method has Apple developed to produce iPhones with with less screens? To my knowledge, each iPhone requires one screen, if they are ordering less screens, it is because they are producing less iPhones. "Never and availability problem?" Do you read the news? iPhone 5 was plagued with production problems.

http://techcrunch.com/2012/10/17/apples-iphone-5-supply-shortage-caused-by-assembly-challenges-foxconn-exec-reports/

@jragosta "I doubt it. It undoubtedly costs a lot less to make a 4 or 4S than a 5. And the selling price difference is not that great (say, $649 vs $749). It may even be that the margins are greater on the older models (but revenue is lower, of course)."

Economies of Scale. If the iPhonne 4/4s was being produced at the same levels as the iPhone 5, then it would be plenty cheaper to manufacture, but the sheer fixed cost of running a production line for a smartphone is so high, the manufacturing cost is higher than you think, even if on paper, the price of the components isn't all that much.
post #25 of 85
Welcome!
Originally Posted by RRtexasranger View Post
Do you read the news? iPhone 5 was plagued with production problems.

 

It's called lying. It's called stock manipulation. That's the point he's making.


…even if on paper, the price of the components isn't all that much.

 

That's the selling price. Apple makes money on every single one they sell. I'm pretty sure they're cheaper to make, being old tech.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply
post #26 of 85
Quote:
Originally Posted by mstone View Post

I think it is a little more complicated than just Apple bashing. If you take a look at a 3 month chart of AAPL vs IXIC you'll probably see a trend that is clearly not based on the tired old adage of 'buy on rumor, sell on news'. AAPL stock price is under pressure from technicals not fundamentals.

And its doubling in stock price in like 4 months last year was all technical as well. It's called a bubble, and it looks like there's only about $70-$90 to go before the bubble is fully deflated and it will resume to trade like a normal, high quality stock.

post #27 of 85
Originally Posted by RRtexasranger View Post
It's called a bubble…

 

You're the second person to say this. Where's the evidence? And why hasn't Amazon's burst?

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply
post #28 of 85
Quote:
Originally Posted by jmgregory1 View Post

It's either shipped as in shipped units that Verizon bought or sold units that Verizon purchased.

Yeah, with Apple's sold numbers it represents a bill of sale and complete transaction being made. It's likely that their vendors still have have units they haven't yet sold to end users by the end of the quarter despite the iPhone's popularity.

"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

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"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

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post #29 of 85
Quote:
Originally Posted by Tallest Skil View Post

Welcome!

 

It's called lying. It's called stock manipulation. That's the point he's making.

 

That's the selling price. Apple makes money on every single one they sell. I'm pretty sure they're cheaper to make, being old tech.

The old versions certainly cost less to make - both component costs will be pressured down and the actual production cost will be reduced as well, both as efficiencies in the process are made and as Apple pressures Foxconn (and others) to reduce the assembly price per unit because they've gone beyond their initially projected unit volumes.

 

For Apple, it's always going to be a win-win to sell the old models.  As they reduce the selling price to the telco's, it's not just a straight reduction in margin, because Apple also reduces the marketing dollars spent on old models.  Those people with a reason to manipulate stock prices will take the news of continued high volume sales of old models as an indication that the new model isn't selling well enough.  We all have to remember that the stock market is only partially driven by fact and hard numbers.  It's also driven by emotion and desire, regardless of either makes "sense".

post #30 of 85

@Dickprinter regarding shipped VS sold.

Apple reports a few numbers.  They indicate "sold" that can mean sold to individuals (as in the Apple Retail or online stores) and sold to the channel partners.  On top of this, they report their current channel inventory.  From this, you can actually get the amount ending up in end users hands.

 

No other Android manufacture indicatesreports this.  So Samsung, for example, will tell the media they "shipped" 2,000,000 Galaxy Tabs but not mention they only sold 20,000 to end users because they do not indicate the channel inventory.

post #31 of 85
Quote:
Originally Posted by Tallest Skil View Post

Originally Posted by RRtexasranger View Post
It's called a bubble…

 

You're the second person to say this. Where's the evidence? And why hasn't Amazon's burst?

Again there is a lot of gray area when comparing different companies and how their stock performs. For one thing neither AMZN or GOOG, for that matter, have any competition in their core business, online retail and search respectively, hence they tend to track the Nasdaq more closely. AAPL didn't make much news back when it was Apple Computer, but now that their core business is iPhone and iPad, this indicates a break from their traditional business model into a market where there is quite a bit of competition. Every little piece of news about the smartphone sector affects Apples' core business area and thus the stock price. Amazon and Google have completely different business models and their forays into Apples' core market segment are not so significant to their bottom line. Apple is not a very diversified company so their stock tends to be a lot more volatile than others in the tech industry.

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

 

How ridiculous is a society who's published works, books, and laws say one thing, the reality is the exact opposite, and not one person has the guts or the temerity to stand up and point out that the Emperor is stark f*cking naked.  I honestly don't know how anyone involved in the stock market, lives with themselves or sleeps at night.  

With a lot of money.

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post #33 of 85
Originally Posted by mstone View Post
For one thing neither AMZN or GOOG, for that matter, have any competition in their core business…

 

To be clear, in reference to Amazon, you mean in regard to the fact that they're an online "everything store", correct?


What of other, smaller "everything stores", such as Buy.com and Overstock.com? I realize that we can discount an individual retailer's online store, as that's a different model than Amazon, but those two?

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply
post #34 of 85
Quote:
Originally Posted by RRtexasranger View Post

And its doubling in stock price in like 4 months last year was all technical as well. It's called a bubble, and it looks like there's only about $70-$90 to go before the bubble is fully deflated and it will resume to trade like a normal, high quality stock.


I'm always surprised at how many more people cry manipulation when the stock is headed down as to when AAPL is headed up.

 

Well, okay, I'm not surprised...

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post #35 of 85
Quote:
Originally Posted by Tallest Skil View Post

Originally Posted by mstone View Post
For one thing neither AMZN or GOOG, for that matter, have any competition in their core business…

 

To be clear, in reference to Amazon, you mean in regard to the fact that they're an online "everything store", correct?


What of other, smaller "everything stores", such as Buy.com and Overstock.com? I realize that we can discount an individual retailer's online store, as that's a different model than Amazon, but those two?

In the same way that Bing and Yahoo compete with Google. That is if you can really call that 'compete'.

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post #36 of 85
Quote:
Originally Posted by jmgregory1 View Post

I think the term shipped in Apple's case was just sloppy writing - as they don't report "shipped" but rather sold units, if I remember correctly.  It's either shipped as in shipped units that Verizon bought or sold units that Verizon purchased.  Apple does not play around with the shipped vs sold crap because that would be pointless.
Units Apple Ships to Verizon are "sold" by Apple. Units sold by Verizon (or Apple direct) are sold to end users. The delta between what is sold to Verizon and what Verizon sells on is channel fill. Unsold units at Apple are not counted as sold. The 6.2MM number is very promising, as there should also be some channel fill adding to that.
post #37 of 85
Quote:
Originally Posted by island hermit View Post


It's because Apple has record setting quarters and its P/E ration is too low for the price to fall.

I'm always surprised at how many more people cry manipulation when the stock is headed down as to when AAPL is headed up.

Well, okay, I'm not surprised...
post #38 of 85
Quote:
Originally Posted by Dickprinter View Post

Hold on here. Are we supposed to take "shipped" as meaning "sold" when speaking about Apple?

 

Shipped = sold, either directly to an end user via an Apple store... or to carriers and retailers who will (eventually) sell them to end users.

 

Quote:
Originally Posted by Tallest Skil View Post

What of other, smaller "everything stores", such as Buy.com and Overstock.com? I realize that we can discount an individual retailer's online store, as that's a different model than Amazon, but those two?

 

What I thought mstone meant (and please correct me if I'm wrong), is that all those online stores depend on fairly steady sales, all of which go up and down depending on the same general economic drivers.  It's a slowly changing environment.  There's rarely anything disruptive that gives one or another a huge advantage selling items.

 

Whereas in the fast paced phone / tablet business, a single poor selling model, or a huge hit designed by a competitor, can have much larger (and quicker!) ramifications on sales and revenues.

 

Ironically, Apple's lawsuits have helped cause the worry on that topic, because of previously secret info that came out from the trials.   E.g. Analysts were surprised to find out how much Apple's profits depend on iOS sales... even more than was thought.  

 

This showed Apple to be more vulnerable to unforeseen events like missing out on China sales, slow manufacturing output, competing devices, removal of subsidies, etc.   The unpredictability is driving analysts crazy.


Edited by KDarling - 1/22/13 at 10:12am
post #39 of 85
Quote:
Originally Posted by RRtexasranger View Post

I'm sorry, what magical production method has Apple developed to produce iPhones with with less screens? To my knowledge, each iPhone requires one screen, if they are ordering less screens, it is because they are producing less iPhones. "Never and availability problem?" Do you read the news? iPhone 5 was plagued with production problems.
 

 

Whenever faced with an assertion that Apple has screwed up in its supply chain, your first reaction ought to be one of suspicion. Consider the level of expertise at Apple around supply chain. Does it really even pass a basic smell test that Apple over ordered a single critical part by a magnitude of 2x versus what they actually needed?

 

Ok, fine. Don't want to discount it yet because you can't understand a scenario where such a supply chain "issue" exists? Here is one rather reasonable possibility. Apple orders millions of screens from multiple sources. It does this to secure supply and quality. Actually, it "over orders" the screens in total. It does this for a few reasons. First, it doesn't want to risk a single source to supply all the screen. Second, it doesn't want to risk some suppliers not being able to meet the quality standards. Third, it wants to optimize pricing for the screen. So it does this by contracting with all the suppliers with certain requirements in place. If the supplier meets those requirements (within a certain timeline) then the supplier gets more of the total business. The contracts allow Apple to "cancel" parts of the order without penalty because the actual demand was always going to be less than the contracted orders.

 

There's nothing magical about that approach. It's not even magical to understand it. In fact, it's pretty much best practice.

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

Hold on here. Are we supposed to take "shipped" as meaning "sold" when speaking about Apple? I thought we poke fun at "shipped" numbers when we talk about Google/Android/Samsung phones because of them stuffing the channel to make it sound like they "sold" more than they actually did but now when talking about Apple we're supposed to be using the term "shipped" also? Did I miss something?

 

Hi Dick,

 

At every Apple quarterly earnings call, soon after the number of iPhones shipped is made public, Apple executives tell how many weeks of inventory are "in the channel", and it always looks good and reasonable.  Had they been lying, it ultimately would show up as a write off or diminishing future sales as inventory is worked off.  This has not happened yet for Apple, and according to all available hard numbers so far, it isn't going to happen this quarter either.

 

You get no such channel inventory information from most other handset vendors, and, outside of Samsung, it probably wouldn't look very good if you did.

 

Thompson


Edited by thompr - 1/22/13 at 10:25am
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