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Apple ups 2008 iPhone 3G build orders to 15 million - report

post #1 of 12
Thread Starter 
Checks within Apple's supply chain reveal the iPhone maker to have hiked its iPhone 3G build orders through the end of the year to more than 15 million, according to one Wall Street analyst.

In a report issued to clients Thursday, FBR Capital Markets analyst Craig Berger said the Cupertino-based company revised both third and fourth calendar quarter iPhone build numbers "significantly higher" to more than 15 million units, in addition to placing orders for 2 million more 2G iPhones.

"With about seven million incremental units being built in [the third quarter] versus [the second quarter], this data clearly has positive implications for iPhone chip suppliers," he said. '[Second quarter] build volumes fell by 25 percent versus prior checks in mid-May (now up only 80 percent quarter-over-quater) as Apple pushes production out a bit into [the third quarter].

The analyst said Broadcom and Marvell stand to be amongst the largest beneficiaries of the increased iPhone build forecast, as they're both believed to be supplying key components for the new iPhone 3G.

Berger said a similar round of checks turned up evidence of an approximate 15 percent positive revision to forward looking iPod build orders, which now suggests sequential growth of 35 percent for the company's digital media player business.

"Greater Classic and Nano builds are partially offset by fewer Touch builds," he told clients. "[Second quarter] build volumes remain largely unchanged, growing 35 percent quarter-over-quarter."

Following the upward trend in the handheld department, Mac orders have also reportedly shot up. Compared to the analyst's previous checks, orders by Apple to its Taiwanese manufacturing facilities suggest anywhere from a 10 to 20 percent increase in Mac system builds.

"These checks also suggest Apple continues to knock the cover off the ball, that its product cycle momentum is ramping, and that any consumer spending malaise in the U.S. or Europe has yet to impact Apple-related product demand," he said.
post #2 of 12
2 million more 2G iphones?? that doesn't sound right
post #3 of 12
Quote:
Originally Posted by retroneo View Post

2 million more 2G iphones?? that doesn't sound right

That was my reaction, too. It kind of makes me doubt the credibility of the entire article.
post #4 of 12
The mind boggles. I couldn't think of a single reason why they would build more 2G iPhones.

I doubt Apple is going to be playing into the hands of unlockers by ordering more units.

I'm sure there's a typo or some mis-communication along the line. Perhaps they ordered 2 million more iPod Touch units?
post #5 of 12
Quote:
Originally Posted by felixkunze View Post

The mind boggles. I couldn't think of a single reason why they would build more 2G iPhones.

I doubt Apple is going to be playing into the hands of unlockers by ordering more units.

I'm sure there's a typo or some mis-communication along the line. Perhaps they ordered 2 million more iPod Touch units?

Maybe they'll pull a Microsoft Keep the previous generation software on the retail shelf but raise the price. No one will buy it at the ATT store, but with the subsidy pricing, and the data plan price increase, the demand for 2G iPhones will still be there. Maybe Apple can take advantage of that and sell them for their original price of $600
post #6 of 12
Quote:
Originally Posted by cameronj View Post

Maybe they'll pull a Microsoft Keep the previous generation software on the retail shelf but raise the price. No one will buy it at the ATT store, but with the subsidy pricing, and the data plan price increase, the demand for 2G iPhones will still be there. Maybe Apple can take advantage of that and sell them for their original price of $600

Or maybe they want them around to sell as novelty items. Or to stock the "Apple Museum" in 20 years time. They will build a giant iPhone out of 2G iPhones to signify the day the mobile phone industry changed forever.
post #7 of 12
Why build 2G phone? ... What if they do sell iPhone, in countries other then in the US, where the cellular infrastructure isn't 3G yet?
post #8 of 12
Maybe it's just poor sentence structure?

Maybe when the Apple 2G supply was depleted they had to order an additional 2 million to tide them over until the introduction and release of the 3G iPhone months later. I dunno?

Then Apple had an original number in mind for the 3G quantity that they would need, but now it seems they need to significantly bump those numbers up.

If my thinking is true, then... "the Cupertino-based company revised both third and fourth calendar quarter iPhone build numbers "significantly higher" to more than 15 million units, in addition to placing orders for 2 million more 2G iPhones." would be right.

Though it might have made better sense if the sentence ended this way...

"the Cupertino-based company revised both third and fourth calendar quarter iPhone build numbers "significantly higher" to more than 15 million units, in addition to the 2 million more 2G iPhones order placed earlier in the year." Again, I dunno?

Ten years ago, we had Steve Jobs, Bob Hope and Johnny Cash.  Today we have no Jobs, no Hope and no Cash.

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Ten years ago, we had Steve Jobs, Bob Hope and Johnny Cash.  Today we have no Jobs, no Hope and no Cash.

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post #9 of 12
Fiscal quarters or calendar? That would explain the 2G phones. Other option is that they are for replacements as touch screens die...

If it is calendar quarters, 15MM seems pretty low to me. They will need at least 2MM for launch...
post #10 of 12
Well - 2G would be great for all those people stuck in, say, Montana. Horrible for those trying to sell their 2G iPhones on eBay tho. I wonder how much they would charge for them? I say 1st gen iPhones would be good because at least people with no 3G capability wouldn't be taking it on the chin to the tune of $30/month for something they can't even use.

I think 15 million might be a little conservative - I think they'll bump it up more later as they see it selling like hotcakes. Of course I don't think '09 is going to be nearly as fruitful as some would believe. Why? No upgrades - nobody is going to be allowed to get another new iPhone until at least the first part of 2010.
post #11 of 12
Quote:
Originally Posted by felixkunze View Post

The mind boggles. I couldn't think of a single reason why they would build more 2G iPhones.

I doubt Apple is going to be playing into the hands of unlockers by ordering more units.

I'm sure there's a typo or some mis-communication along the line. Perhaps they ordered 2 million more iPod Touch units?


I don't know about 2 million, but wouldn't they need at least a pretty good amount around as the existing 2G iPhones start breaking and are replaced via AppleCare or warranty? They wouldn't just let someone have a free upgrade to the new Iphone, as that would surely spur on all kinds of iPhone 2G "accidents".. ?
post #12 of 12
Quote:
Originally Posted by winterspan View Post

I don't know about 2 million, but wouldn't they need at least a pretty good amount around as the existing 2G iPhones start breaking and are replaced via AppleCare or warranty? They wouldn't just let someone have a free upgrade to the new Iphone, as that would surely spur on all kinds of iPhone 2G "accidents".. ?

My guess on the 2G is simpler; Maybe this leak is actually 4 months old and relates to the time in Feb-March when Apple was running out of inventory.
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