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Apple boosts iPod orders for current quarter, trims Macs slightly

post #1 of 22
Thread Starter 
Apple has increased orders for most of the members of its iPod family over the past month or so while trimming Mac orders only slightly -- a sign the company's business is standing its own amid a weakening economy, one Wall Street analyst says.

FBR Capital Markets analyst Craig Berger in a note to clients Wednesday said his latest round of checks into the Apple supply chain show the electronics maker to have revised its second-quarter (ending June) iPod build numbers positively by 15 percent since his last check in late March. Looking ahead, he now sees iPod builds growing 35 percent quarter-over-quarter.

"We see greater Shuffle, Classic, and Nano, builds slightly offset by fewer Touch builds, with greater Shuffle builds accounting for most of the increased iPod builds.," the analyst wrote.

Though he did not offer an explanation for the decline in iPod touch orders, some consumers may be delaying new purchases of the touch-screen players as they await pricing details of the next-generation iPhone, which will in all likelihood include all of the functionality of the iPod touch.

Berger's checks also show Apple have cut its second quarter iPhone build volumes by less than 10 percent versus checks from late March. Going forward, however, he expects iPhone build volumes to ramp considerably by about 250 percent to 3 million units, as Apple builds 3G iPhones ahead of its likely June launch.

"Apple's June, September, and December total 3G order fell by 500,000 units versus our prior checks to 11 million units, although our contacts still say Apple will likely reduce this forecast over time," he wrote. "This suggests Apple could sell 11 million iPhones in total in 2008, including its March actual shipments."

Meanwhile, Apple's second quarter Mac builds are said to have fallen only modestly since Berger last checked, with the most pronounced cut affecting the company's more costly professional MacBook Pro line.

"Apple used the seasonally slow March quarter to replenish inventory of notebooks, and to build the initial wave of MacBook Air products, thus making second quarter build comparisons difficult," he explained. "For the second quarter, we see total PC build volumes declining about 15 percent sequentially due to Apple's inventory build in 1Q."

"Big picture," he added, "these checks show that consumer spending, at least at Apple, has not meaningfully deteriorated over the past two months."
post #2 of 22
Many potential MBP buyers have put off purchasing with the hopes of an update (possible case redesign?) at WWDC . With the recent news that Intel has delayed the release of Montevina, it will hurt MBP sales in the short term.
post #3 of 22
Quote:
Originally Posted by amac4me View Post

Many potential MBP buyers have put off purchasing with the hopes of an update (possible case redesign?) at WWDC . With the recent news that Intel has delayed the release of Montevina, it will hurt MBP sales in the short term.

It shouldn't. There is no way that Montevina production would have been ramped up to accommodate what Apple would need for new MB and MBPs. Also, it's only been 92 days since the last MBP update; the mean average is 194 days. These rumors of updating their notebook line at half the normal interval have absolutely nothing but wishful thinking holding them together.
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post #4 of 22
Quote:
Originally Posted by solipsism View Post

It shouldn't. There is no way that Montevina production would have been ramped up to accommodate what Apple would need for new MB and MBPs. Also, it's only been 92 days since the last MBP update; the mean average is 194 days. These rumors of updating their notebook line at half the normal interval have absolutely nothing but wishful thinking holding them together.

Seeing how wwdc is supposed to be a software thing, the only reason I can see Jobs introducing the updated iPhone is because the developers will use that along with updated OS X and the SDK.

Otherwise, it's about software, and simplicity...one big announcement, smaller updates.
I think the MB & MBP will see a rather major update, but later this year.
post #5 of 22
As much as I'd like to believe this report, reports on Apple's orders have been unreliable. Remember all the
reports of Apple cutting orders that came out in January and February? Turned out the March quarter was spectacular. Reports of MAC sales in April were spectacular also, so any cut in orders by Apple of MACS is
hard to believe...and more importantly, do they usually order a lot and then usually cut back on the order
as the quarter progresses? If this is so, then it would be the amount of cut back in orders, not if they cut back
that would be important to watch. Thirty Five percent growth in builds of ipods are hard to believe, unless they
are building for the usual "Student buy a Mac get a free ipod" promotion which should happen in the next few months.
post #6 of 22
Quote:
Originally Posted by AppleInsider View Post

Apple has increased orders for most of the members of its iPod family over the past month or so while trimming Mac orders only slightly -- a sign the company's business is standing its own amid a weakening economy, one Wall Street analyst says.

Holding its own? Standing strong? Pick one or the other, but not both
post #7 of 22
Quote:
Originally Posted by AppleInsider View Post

Though he did not offer an explanation for the decline in iPod touch orders, some consumers may be delaying new purchases of the touch-screen players as they await pricing details of the next-generation iPhone, which will in all likelihood include all of the functionality of the iPod touch.

At least as likely is that Apple previously announced that iPod Touch users will need to pay an upgrade fee to move to the version 2.0 software. Between an expectation of people waiting and a desire to not have a bunch of unsold Touches with the old software, it would make sense that they would try to run their channels a bit lean ahead of the upcoming software refresh.

iPhones, on the other hand, get a free upgrade, so software features would not be the reason people will hold off purchasing. For the iPhone, it likely comes down to customers waiting for the prognosticated 3G/GPS version.
post #8 of 22
Quote:
Originally Posted by mustbehardtospel View Post

Between an expectation of people waiting and a desire to not have a bunch of unsold Touches with the old software, it would make sense that they would try to run their channels a bit lean ahead of the upcoming software refresh.

If I recall correctly, the iPod Touch came with the updated software the day it was available if you purchased it from an Apple Store. Though I'm not sure if they replaced the supply, manually updated them or offered it as a free upgrade in some other way.
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post #9 of 22
Quote:
Originally Posted by amac4me View Post

Many potential MBP buyers have put off purchasing with the hopes of an update (possible case redesign?) at WWDC .

I am putting off buying a MBP until after WWDC to give Apple time to work out the bugs in the latest release (striped display, etc). I hope they don't announce an update: I plan to buy the current (classic) design when the iPhone SDK 1.0 is finally released.
post #10 of 22
Quote:
Originally Posted by solipsism View Post

If I recall correctly, the iPod Touch came with the updated software the day it was available if you purchased it from an Apple Store. Though I'm not sure if they replaced the supply, manually updated them or offered it as a free upgrade in some other way.

Probably done in-house at Apple stores. As I recall, when a new OS is released, the staff shows up early to install it on the existing inventory. I doubt that Wal-Mart and Best Buy do this.
post #11 of 22
Quote:
Originally Posted by mustbehardtospel View Post

At least as likely is that Apple previously announced that iPod Touch users will need to pay an upgrade fee to move to the version 2.0 software. Between an expectation of people waiting and a desire to not have a bunch of unsold Touches with the old software, it would make sense that they would try to run their channels a bit lean ahead of the upcoming software refresh.

I wonder how many prospective Touch buyers know there's a paid update coming. I don't think the average buyer really pays attention to that.
post #12 of 22
Quote:
Originally Posted by solipsism View Post

If I recall correctly, the iPod Touch came with the updated software the day it was available if you purchased it from an Apple Store. Though I'm not sure if they replaced the supply, manually updated them or offered it as a free upgrade in some other way.

It depends on where you buy one. Amazon was still selling Touches with the previous software after the last paid update. There was a note in the product description saying that you would need to pay the upgrade fee ($20 if memory serves).

Apple stores probably do the upgrade. However, they still likely want to have as small of a stock in need of that as possible.
post #13 of 22
Quote:
Originally Posted by JeffDM View Post

I wonder how many prospective Touch buyers know there's a paid update coming. I don't think the average buyer really pays attention to that.

Probably at least as many as know that an iPhone refresh is in the works and are holding off buying a Touch for that reason, which is what the article suggested as a reason for the reduction in the build order.
post #14 of 22
Quote:
Originally Posted by nothowie View Post

As much as I'd like to believe this report, reports on Apple's orders have been unreliable. Remember all the
reports of Apple cutting orders that came out in January and February? Turned out the March quarter was spectacular. Reports of MAC sales in April were spectacular also, so any cut in orders by Apple of MACS is
hard to believe...and more importantly, do they usually order a lot and then usually cut back on the order
as the quarter progresses? If this is so, then it would be the amount of cut back in orders, not if they cut back
that would be important to watch. Thirty Five percent growth in builds of ipods are hard to believe, unless they
are building for the usual "Student buy a Mac get a free ipod" promotion which should happen in the next few months.

Apple did cut orders during that period. It was why they ran short of the iPhone, and had lower than normal inventory on other products. Apple has historically been wary of over ordering. It has hurt them numerous times in the past.

Interestingly enough, this low order syndrome has been in place when Jobs was with the company in the beginning, after he left, and again after he returned.

It must be something in Apple's genes.
post #15 of 22
Quote:
Originally Posted by mustbehardtospel View Post

Probably at least as many as know that an iPhone refresh is in the works and are holding off buying a Touch for that reason, which is what the article suggested as a reason for the reduction in the build order.

Actually, when I got my touch earlier this year, they sold me one without the update. Turns out they had discounted the price to net out difference in cost to add the update. Also turns out they had both upgraded and non-upgraded units in stock ($20 price diff.) but salesperson did not tell me, and seemed a bit surprised and apologetic.

This was the one area where process from a consumer perspective was less than smooth.

Mark
post #16 of 22
Quote:
Originally Posted by hypermark View Post

Actually, when I got my touch earlier this year, they sold me one without the update. Turns out they had discounted the price to net out difference in cost to add the update. Also turns out they had both upgraded and non-upgraded units in stock ($20 price diff.) but salesperson did not tell me, and seemed a bit surprised and apologetic.

This was the one area where process from a consumer perspective was less than smooth.

Mark

Was that at an Apple store?
post #17 of 22
Quote:
Originally Posted by mustbehardtospel View Post

Probably at least as many as know that an iPhone refresh is in the works and are holding off buying a Touch for that reason, which is what the article suggested as a reason for the reduction in the build order.

A lot of people holding off on the iPhone, I understand, though there's very few to buy now. But I don't think very many buyers really pay attention to software updates and such. Many of us here hang onto every word about the products, but I don't think most consumers pay that much attention at all.
post #18 of 22
Quote:
Originally Posted by JeffDM View Post

A lot of people holding off on the iPhone, I understand, though there's very few to buy now. But I don't think very many buyers really pay attention to software updates and such. Many of us here hang onto every word about the products, but I don't think most consumers pay that much attention at all.

That's the truth. It's amazing how ignorant most consumers are.

When Apple was moving to Intel, just to satisfy my curiosity, I started asking people if Macs had used Intel chips, or chips from some other company. Almost everyone assumed that Apple had ALWAYS used Intel chips. I brought this out here at the time.

Most people do no research into what they are buying other than to think the product is cool in some way, and has a couple of features they may want, possibly, because others have them.

In addition to most people not knowing what model phone or computer they have, many don't even know what manufacturer made it. I see that all the time with computers. I ask the question in their home, and they turn around to take a peek before answering.
post #19 of 22
Quote:
Originally Posted by JeffDM View Post

But I don't think very many buyers really pay attention to software updates and such.

Quote:
Originally Posted by melgross View Post

n addition to most people not knowing what model phone or computer they have, many don't even know what manufacturer made it. I see that all the time with computers. I ask the question in their home, and they turn around to take a peek before answering.

It's also not yet common for people to think of a phone as having frequent, periodical updates that increase performance and features.. Smartphone users obvious expect this more, but the average iPhone user is new to this market segment.
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post #20 of 22
Quote:
Originally Posted by solipsism View Post

It's also not yet common for people to think of a phone as having frequent, periodical updates that increase performance and features.. Smartphone users obvious expect this more, but the average iPhone user is new to this market segment.

Yes, no major upgrades of an OS, or firmware on any phone I know of, including smartphones. As far as I know, this will be a first.

Somehow though, this looks to be the beginning of a trend.

Phone manufacturers have not been software developers other than for what was needed to get the phone up and running. That's basically been true even for the smartphone manufacturers, though they have had a few programs.

Their money was in selling phones almost exclusively, except for accessories.

Apple is different here, I can't see them not being a part of the developer community here, just as they are for their computers.
post #21 of 22
Quote:
Originally Posted by mustbehardtospel View Post

It depends on where you buy one. Amazon was still selling Touches with the previous software after the last paid update. There was a note in the product description saying that you would need to pay the upgrade fee ($20 if memory serves).

Apple stores probably do the upgrade. However, they still likely want to have as small of a stock in need of that as possible.

i bought a refurbished "software version 1" ipod touch the day before the new one came out. connected it to itunes and it downloaded and updated to version 2. no charge. surprised me, but in a good way...
post #22 of 22
Quote:
Originally Posted by Tofino View Post

i bought a refurbished "software version 1" ipod touch the day before the new one came out. connected it to itunes and it downloaded and updated to version 2. no charge. surprised me, but in a good way...

That's nice. I wonder if they track by serial number then.
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