Rumors of reduced iPhone 5 orders briefly send Apple shares below $500

Posted:
in AAPL Investors edited January 2014
Shares of Apple stock dipped below $500 in early trading Monday morning, as investors reacted to new reports claiming the company had made significant cuts to iPhone 5 orders.

iPhone 5


AAPL shares were down nearly 4 percent before the market opened, a hit that came after both The Wall Street Journal and Nikkei issued reports claiming that Apple had slashed iPhone 5 component orders due to weak demand. The company is said to have cut "roughly half" of its orders for the 4-inch display on its latest smartphone, and also initiated a drawdown on other components in the current quarter, which concludes in March.

The news comes just over a week before Apple is set to announce earnings for its recently concluded December quarter. Apple's sales during the holiday season are expected to be record setting, particularly for the iPhone, which some believe may have reached sales of 50 million.

Uncertainty about Apple's future growth has made next Wednesday's earnings report conference call that much more important for the company. Last week, before rumors about iPhone 5 orders surfaced, one prominent analyst had already declared that the Jan. 23 call would be Apple's most important in a decade.

Even before reports claimed iPhone 5 component orders were halved, Apple stock had tumbled nearly 17 percent over the last three months. It's been said that investors are concerned about Apple's gross margins in 2013, in addition to the company's growth potential.

The last time Apple stock went below $500 was last February. The company's high came in mid-September, when it was briefly priced at more than $700 per share.

Riding the hype of the iPhone 5 launch, some analysts predicted that AAPL stock was headed for $1,000 per share, and Brian White of Topeka Capital Markets has maintained his price target of $1,111. But in premarket trading on Monday, Apple had become worth less than half of those targets.
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Comments

  • Reply 1 of 75


    I hope someone investigates this so called "analysts", "WSJ sources", etc.


    It's disgusting and only someone retarded cannot see what's going on.


     


    Even if this story is half-true, it's obvious the reason isn't weak demand. Bunch of ignorant people.

  • Reply 2 of 75


    Someone made $$$$$.

     

  • Reply 3 of 75

    Quote:

    Originally Posted by lightknight View Post


    Someone made $$$$$.

     





    Yes. Timed perfectly for calls that expire this week.

  • Reply 4 of 75
    rogifanrogifan Posts: 10,669member
    Stock has come back a bit now, Wonder if the Apple bulls like Gene Munster will be on the airwaves trying to undo the damage. CNBC's Jon Fortt tweetd thwt he's skeptical about the WSJ story because he doesn't think they have enough inside knowledge on Apple's supply chain.
  • Reply 5 of 75
    steven n.steven n. Posts: 1,082member
    Sounds like BS to me. Already, the iPhone 5 represents 10% of mobile web views in [U]t[/U]he US. It [S]is[/S][U]has[/U] outpace[U]d[/U] web traffic of the Galaxy S III, Galaxy Note II and Galaxy S II combined in the EU. [U]This is just 3 months time and does not sound like poor demand to me.[/U]

    This is like poor demand in China and whoops. Record sells. Sounds like stock manipulation to me.
  • Reply 6 of 75
    teejay2012 wrote: »

    Yes. Timed perfectly for calls that expire this week.

    I think this is exactly what this is. Mega hedge funds, banks and others have a lot of exposure to these calls and they want to limit what they have to pay out. I think this year's chart for the first few months will look very similar to this period of time last year.
  • Reply 7 of 75
    The WSJ reporter, Juro Osawa, expanded on the article he wrote in this WSJ live interview. Unfortunate his story didn't include the observations that any change in component orders might be due to other factors, nor that the order reductions took place last month (this is old news, not sure why the WSJ is working the angle today).

    http://live.wsj.com/#!3030E9E5-F37D-48AB-B925-B454F4942A62
  • Reply 8 of 75
    jragostajragosta Posts: 10,473member
    The WSJ reporter, Juro Osawa, expanded on the article he wrote in this WSJ live interview. Unfortunate his story didn't include the observations that any change in component orders might be due to other factors, nor that the order reductions took place last month (this is old news, not sure why the WSJ is working the angle today).

    http://live.wsj.com/#!3030E9E5-F37D-48AB-B925-B454F4942A62

    I have to laugh:
    On one hand, they're saying orders for iPhone 5 components are down. On the other hand, they're saying that Apple is replacing the iPhone 5 with a new model in a couple of months. Yet no mention of the second rumor in explaining the first one. So I guess their point is that they don't believe their own BS.

    Not to mention, of course, that sales always drop off significantly after Christmas.
  • Reply 9 of 75

    Quote:

    Originally Posted by jragosta View Post





    I have to laugh:

    On one hand, they're saying orders for iPhone 5 components are down. On the other hand, they're saying that Apple is replacing the iPhone 5 with a new model in a couple of months. Yet no mention of the second rumor in explaining the first one. So I guess their point is that they don't believe their own BS.



    Not to mention, of course, that sales always drop off significantly after Christmas.


    That's not true, not the quarter after christmas.

  • Reply 10 of 75
    matrix07matrix07 Posts: 1,993member
    That's not true, not the quarter after christmas.

    Last year Apple signed up second Chinese carrier though.
  • Reply 11 of 75
    matrix07 wrote: »
    Last year Apple signed up second Chinese carrier though.

    Not only that, but the iPhone 4S did not release at all in greater China until 2012. This year's release of the iPhone 5 started a month earlier, and went into more countries quicker.
  • Reply 12 of 75

    Quote:

    Originally Posted by MacCentric View Post





    Not only that, but the iPhone 4S did not release at all in greater China until 2012. This year's release of the iPhone 5 started a month earlier, and went into more countries quicker.


    And Apple could only catch up with demand a few weeks ago.

  • Reply 13 of 75


    Oh, come on you guys.


     


    We all know that nobody can manipulate the stock market.


     


    cough bullshit cough

  • Reply 14 of 75
    Until Cook proves he has what it takes to keep Apple at the top of the innovation ladder these fears will remain. It's only natural. The "news media" needing crap to print keep making it worse and playing off these fears.
  • Reply 15 of 75
    mjtomlinmjtomlin Posts: 1,792member


    Not that I give a crap about the stock market... but you'd think investors wouldn't be so reactionary to these "reports"? Honestly, what is it, every two weeks there's a new report about how horrible Apple's sales are? Then the following week, that report is mysteriously claimed to be false.


     


    Would be great if Apple didn't deliver the numbers Wall Street is expecting next week and the stock completely tanks. Then Apple buys back as much as they can until they can take the company private again. Then all these dumb reports about stock price and manipulation can go away.


     


    Then IDC and Gartner would be forced to guesstimate how many units Apple sold as they do with most of their Android figures.

  • Reply 16 of 75


    Now I don't purport to represent the majority of people in any shape or form but I wonder if people like me might begin to be a drag on Apples sales...


     


    You see I am the proud owner of an 32Gb iPhone 3GS purchased within 2 weeks of its release in 2009, coming up to 4 years ago.


     


    I had the battery replaced once at the beginning of this year (by Apple for $89AUD) but to this day feel no huge need to upgrade. This in not a criticism of the iPhone 4 or 5 (although I didn't like the 4's feel in my hand) but more of an indication of how happy I am with the 3GS.


     


    It still runs the latest iOS software, I have loads of applications for it and it does what I want - sure I wouldn't mind a front facing camera for Skype but hey - I have my iPad and Macbook Air for that... It's because I am so happy with my existing iPhone that I feel no pressure to upgrade and hence I am missing from Apples iPhone sales figures for the last 3.5 years despite being a very satisfied Apple customer.


     


    Sure maybe if Apple's new phone was free on a monthly account or around half the price I would have upgraded so pricing is a factor in my decision but really if the price was lower I would actually only be purchasing out of whim rather than a real need.


     


    To me that is the beauty of Apple products.. before I discovered them I averaged a new phone every 12 months (Nokia 8210, 8250, 8310, 6610, various Windows mobiles, Motorola Razor, various Sony Ericssons, Panasonic etc) and would purchase a new computer every 24 months. Now I grab a new Apple laptop every 4 years and I guess have headed into the same territory with my phone purchasing habits.


     


    Apple products just are really well designed and built, are generally satisfying to use (so you don't generate as much desire to replace them) and last so damn long.


     


    As long as they keep making them in such a way I will keep buying - just don't expect me to show up in the yearly sales figures (surprisingly unusual for a 32 year old tech-head but there you go - the money I save gets spent on various other adventures!).

  • Reply 17 of 75

    Quote:

    Originally Posted by Captain J View Post



    Until Cook proves he has what it takes to keep Apple at the top of the innovation ladder these fears will remain. It's only natural. The "news media" needing crap to print keep making it worse and playing off these fears.


    This isn't "natural", it already happened even with Steve.


     


    This is CORRUPTION.

  • Reply 18 of 75


    Soo tired of the shorting of Apple stock.  Didn't Apple make more profit than Google and Samsung combined last quarter.  I don't see their tock price being pummelled.

  • Reply 19 of 75
    jragostajragosta Posts: 10,473member
    That's not true, not the quarter after christmas.

    That's nonsense. Apple sales ALWAYS drop after Christmas - just like everyone else in the world who sells consumer goods.
    http://us.123rf.com/400wm/400/400/cphoto/cphoto0804/cphoto080400031/2898875-road-sign--curves-ahead-warning.jpg
    In most years, the drop is at least 15% - with 2011 being the sole exception due to new product introductions.

    Oh, and btw, this source confirms my explanation:
    http://www.thestreet.com/story/11811629/1/if-ithe-wsji-is-wrong-about-weak-iphone-5-demand-will-it-apologize-to-apple.html

    I just checked their latest numbers. Share price is $501, but they have $31 in cash per share, so cash-adjusted price is $470. That gives them an adjusted P/E ratio of 10.7 - which is ridiculously low by any standards.
  • Reply 20 of 75
    "The news comes just over a week before Apple is set to announce earnings..." NEWS???, Oh, Please! This is rumor. It is far from "news". And it has one purpose and one purpose only: To sabotage Apple stock just before earnings. It's the worst kind of yellow journalism, and those practicing it are guilty of swindling.
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