iPhone orders 'significantly' reduced as Apple begins prepping for next-gen model

Posted:
in iPhone edited January 2014
Apple has begun drawing down build plans for its current iPhone models, as sales begin to ease in anticipation of a new sixth-generation model expected to launch later this year.

Analyst Shaw Wu with Sterne Agee said in a note to investors on Tuesday that he has found in his checks with suppliers that Apple has reduced iPhone orders by between 20 and 25 percent from the 35.1 million units the company shipped in the March quarter.

If those numbers hold for the current June quarter, that would result in shipments of between 26 million and 28 million iPhones. That result would be below Wall Street consensus of between 30 million and 31 million.

Wu also noted that investors should factor in the 8.6 million iPhones Apple has in the channel inventory, with 2.6 million added in the most recent quarter. That channel inventory allowed the company to reach a supply-demand balance of between 4 and 6 weeks.

"From our understanding, the reason for the reduction is not demand related but rather due to the upcoming 6th generation iPhone refresh likely in the September-October timeframe," Wu wrote. "It appears AAPL is opting to be conservative with its suppliers to factor in a potential 2-quarter pause ahead of the refresh and also to manage inventory."

iPhone 4S


Last year, Apple reported record sales of 20.34 million iPhones during the June quarter. That bested analyst expectations, which were as low as 15.8 million.

But in the following September quarter, iPhone sales were 17.07 million, or 21 percent year over year growth, as Apple drew down inventories ahead of the iPhone 4S launch. That came in below expectations, as analysts predicted sales of around 20 million iPhones for the quarter.

Wu noted that Wall Street consensus last year "grossly underestimated the impact of a pause and inventory drawdown ahead of the iPhone 4S." He believes investor expectations should be drawn in for the June quarter as well as the following September quarter.

But while he doesn't expect a significant upside for iPhone sales in the coming quarters, Wu does believe the iPad has the potential to impress investors. Specifically, he has heard that Apple has increased build plans for its third-generation tablet.

Previously, shipments of the new iPad were held back by manufacturing issues with the new high-resolution Retina display. Earlier this month, estimated shipping times improved to between 3 and 5 business days as availability improved.

Wu said Retina display availability has been addressed by adding an additional supplier, beyond Samsung. He believes this will allow Apple to meet strong demand for the new iPad in the coming quarters, enabling the company to deliver upside compared to consensus investor expectations.
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Comments

  • Reply 1 of 24
    jragostajragosta Posts: 10,473member
    What an idiot.

    First, there's no reason to believe that he has any idea what's going on based on his history. But even if he does, his 'reduced expectations' are for a 30% increase over last year's June quarter. Why the negativism?
  • Reply 2 of 24
    haarhaar Posts: 563member
    fantastic!... I was worried that Apple was not going to produce a new iPhone! /sarcasm
    Ah, Yes September is when school is in session, and Apple "Schools" the Cell phone industry...
    so june is out of the question?...
  • Reply 3 of 24
    MacProMacPro Posts: 17,868member


    This all reminds me of the 'experts' at the start of the season discussing which team will win the Super Bowl and why or which horse will win the Derby and why .....

  • Reply 4 of 24
    eldernormeldernorm Posts: 232member


    Anal .....yst... Just so stupid.  Sheeeze!!  Do these guys ever get it right or do they just throw a deck of cards up in the air to make their predictions.???

  • Reply 5 of 24
    DaekwanDaekwan Posts: 174member


    As soon as I see analyst.. I ignore it.


     


    They get more wrong, than they get right.  That said, I dont think there's a snowballs chance in hell that we wont see a completely redesigned 4G/LTE iPhone5 with a bigger screen in the next 6 months.  As a 4 & 4S owner.. network speed & small screen are truly my only major complaints.  I would think most people owning a 4 or 4S would agree.

  • Reply 6 of 24

    Quote:

    Originally Posted by Daekwan View Post


     a completely redesigned 4G/LTE iPhone5 with a bigger screen in the next 6 months.  As a 4 & 4S owner.. network speed & small screen are truly my only major complaints.  I would think most people owning a 4 or 4S would agree.



     


     


    Just so long as they don't increase the size of the case.   Any bigger than it is and it will not fit into anybody's pocket.


     


    Apple tested every size of device, and determined that the current size is the perfect size.  Any other size is less good.

  • Reply 7 of 24
    starbird73starbird73 Posts: 538member

    Just so long as they don't increase the size of the case.   Any bigger than it is and it will not fit into anybody's pocket.

    Apple tested every size of device, and determined that the current size is the perfect size.  Any other size is less good.

    I'll take a slightly bigger screen (3.75" - 4") as long as it is the same ratio/pixel dimensions and not much bigger footprint.
  • Reply 8 of 24

    Quote:

    Originally Posted by starbird73 View Post




    Quote:

    Originally Posted by I am a Zither Zather Zuzz View Post





    Just so long as they don't increase the size of the case.   Any bigger than it is and it will not fit into anybody's pocket.



    Apple tested every size of device, and determined that the current size is the perfect size.  Any other size is less good.




    I'll take a slightly bigger screen (3.75" - 4") as long as it is the same ratio/pixel dimensions and not much bigger footprint.


     


    Most people like the size of the iPhone screen.

  • Reply 9 of 24





    Quote:

    Originally Posted by starbird73 View Post




    Quote:

    Originally Posted by I am a Zither Zather Zuzz View Post





    Just so long as they don't increase the size of the case.   Any bigger than it is and it will not fit into anybody's pocket.



    Apple tested every size of device, and determined that the current size is the perfect size.  Any other size is less good.




    I'll take a slightly bigger screen (3.75" - 4") as long as it is the same ratio/pixel dimensions and not much bigger footprint.


     


    Most people like the size of the iPhone screen.  They don't wear clown pants.


     


    Apple has managed to sell more iPhones than anybody else, and all of them have a 3.5" screen.  People who like crappy big screens already have lots of choices, and the iPhone still outsells every Android phone on the market.


  • Reply 10 of 24
    starbird73starbird73 Posts: 538member

    Don't get me wrong, I am fine with the current size. I was just saying if they feel compelled to go bigger, don't change the ratio or add more pixels.
  • Reply 11 of 24
    icoco3icoco3 Posts: 1,455member


    General question....have ANY of the analysts so often mentioned in articles ever:


     



    1. Ran a successful company?


    2. Ran a successful supply chain?


    3. Ran anything successful at all?


    4. Made a million with their ideas?


    5. Change how people do things in their day to day life?


    6. etc


    7. etc


     


    Just asking...

  • Reply 12 of 24
    charlitunacharlituna Posts: 7,198member

    Quote:

    Originally Posted by jragosta View Post



    What an idiot.

    First, there's no reason to believe that he has any idea what's going on based on his history. But even if he does, his 'reduced expectations' are for a 30% increase over last year's June quarter. Why the negativism?


     


    It's not a case of him being an idiot so much as this is a total NSS (No s*it sherlock) bit of info. Of course Apple is going to reduce their buy on a model that is about to disappear or turn into the mid level model. They do it every year. 

  • Reply 13 of 24
    charlitunacharlituna Posts: 7,198member

    Quote:

    Originally Posted by haar View Post



    fantastic!... I was worried that Apple was not going to produce a new iPhone! /sarcasm

    Ah, Yes September is when school is in session, and Apple "Schools" the Cell phone industry...

    so june is out of the question?...


     


    I would say yes. Based on last years tactic it appears Apple has moved the iPhone to the Fall where they can pick up sales in the last quarter that they weren't getting with the iPod line up. the iPad has Spring covered and Back to School sales for the Macs in the Summer make it the thing to focus on with new hardware possibly coming out to grab interest and sales. Winter of course has the holidays so it needs no real help. 


     


    Also, getting the iPhone announcement out of WWDC loosens up the time table in the same way that getting out of MacWorld a couple of years ago did for the company. And it allows Apple to put the conference focus back on their software. We'll probably get a couple of tidbits about the new phone if something would be leaked by the iOS 6 betas but that's all. 

  • Reply 14 of 24
    jungmarkjungmark Posts: 6,626member

    Quote:

    Originally Posted by icoco3 View Post


    General question....have ANY of the analysts so often mentioned in articles ever:


     



    1. Ran a successful company?


    2. Ran a successful supply chain?


    3. Ran anything successful at all?


    4. Made a million with their ideas?


    5. Change how people do things in their day to day life?


    6. etc


    7. etc


     


    Just asking...





    That's why they are analysts. They failed at everything else.

  • Reply 15 of 24
    sockrolidsockrolid Posts: 2,788member

    Quote:

    Originally Posted by AppleInsider View Post



    Apple has reduced iPhone orders by between 20 and 25 percent from the 35.1 million units the company shipped in the March quarter.


     


    If true, it means that Apple is only ordering parts (flash memory modules) for the 8GB iPhone 4S.  Right now, Apple ships the 3GS and 4 with 8GB of flash memory, so when the "new iPhone" is released, the 4S will likely be limited to 8GB as well.

  • Reply 16 of 24
    sockrolidsockrolid Posts: 2,788member

    Quote:

    Originally Posted by jungmark View Post




    That's why they are analysts. They failed at everything else.



     


    And they're all trying to become the next rock star analyst by making a prediction that nobody else does, then having it come true by some miracle of fortune.  Being a rock star analyst means corporations will pay you to write private reports for them and then pay you to write public reports that say the exact opposite.  Or something like that.  But the rock star analogy holds.

  • Reply 17 of 24
    peter236peter236 Posts: 254member


    Thhe problem with Apple is because there is only one model of iPhone. More models will smooth the demand and earnings from old to new models.

  • Reply 18 of 24
    tallest skiltallest skil Posts: 43,399member

    Quote:

    Originally Posted by peter236 View Post

    Thhe problem with Apple is because there is only one model of iPhone. More models will smooth the demand and earnings from old to new models.


     


    Yeah, the fact that their single model outsells every other phone on the planet is the problem.




    The fact that their THREE YEAR OLD SINGLE MODEL still outsells every other phone on the planet is the problem.


     


    I don't get it. Apple sells three models of iPhone at once, and they're the top three selling phones. We don't need different sizes and we don't need more "models".

  • Reply 19 of 24
    peter236peter236 Posts: 254member

    Quote:

    Originally Posted by Tallest Skil View Post


     


    Yeah, the fact that their single model outsells every other phone on the planet is the problem.




    The fact that their THREE YEAR OLD SINGLE MODEL still outsells every other phone on the planet is the problem.


     


    I don't get it. Apple sells three models of iPhone at once, and they're the top three selling phones. We don't need different sizes and we don't need more "models".





    That is why Android models outsell the 3 iPhone models, 2 of which are outdated. The Android ecosystem is large than the IOS ecosystem.

  • Reply 20 of 24
    tallest skiltallest skil Posts: 43,399member

    Quote:

    Originally Posted by peter236 View Post

    That is why Android models outsell the 3 iPhone models, 2 of which are outdated. The Android ecosystem is large than the IOS ecosystem.


     


    No, it's not. They flood the market with cheap crap and dozens upon dozens of models, don't release numbers of shipped OR sold, and don't care about selling any device at all. Android phones, the newest phones, are buy one get one free. And they count that as "sold". That's why a three year old iPhone sells better than even the newest Android phone. People want iPhones, not Android phones, as evidenced by more people buying a three year old iPhone than a brand new Android device.

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