iPhone 5 demand 'robust,' order cuts likely stem from improved yields & supplier shifts

Posted:
in iPhone edited January 2014
While recent reports about iPhone 5 component orders being reduced have caused "great confusion," the reality is consumer demand for the iPhone 5 has not waned.

Analyst Shaw Wu with Sterne Agee revealed in a note to investors on Tuesday that his checks with suppliers indicate that demand for the iPhone 5 "remains robust." He's not concerned by recent reports that interpreted iPhone 5 order cuts as a sign of weak demand.

iPhone 5


Wu joins a growing chorus of market watchers who believe any order cuts for iPhone 5 components are not representative of consumer interest. Mark Moskowitz of J.P. Morgan said the reports are just "more noise" that will prompt investors to overreact, while Maynard Um of Wells Fargo said any cuts are actually "not news."

For his part, Wu believes that reduced orders for iPhone 5 components are a result of improved yields, which has required Apple to place fewer orders for components. In addition, he said supplier shift changes made by Apple have contributed to the cuts.

With so much attention on Apple's future, Wu believes Apple's guidance for its March quarter will be the "trickiest" that he can remember.

He expects Apple will give "vintage conservative" guidance, as it has traditionally done. But while in the past investors would brush aside Apple's soft guidance, this time some may view the guidance as a sign of weak demand.

As for Apple's recently concluded December quarter, Wu expects iPhone sales and gross margins will likely surprise investors to the upside. His forecast calls for sales of 47.5 million iPhones, above market consensus of 46 million to 47 million, with gross margin of 38.7 percent, versus expectations of 38.3 percent.

Sterne Agee has a price target of $840 for AAPL stock, with a "buy" recommendation for investors. Apple will report its earnings next Wednesday, Jan. 23 ??a call that is viewed by some as the company's most important in 10 years.
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Comments

  • Reply 1 of 89
    Buy. Hold. Put it aside, ignore the noise, and stay focused on the long horizon.
  • Reply 2 of 89
    jragostajragosta Posts: 10,473member
    And this new news will make Apple's stock price drop some more. I'm not even going to try to come up with an explanation since the traders pushing the stock down apparently don't care about logic or reason, anyway.

    Meanwhile, the WSJ who foisted the ridiculous rumor about weak sales will continue to be cited by sites around the world and continue to be believed no matter what nonsense they publish.
  • Reply 3 of 89
    I though demand had slowed. Had I held an iPhone 5 before buying one I wouldn't have bought it. They are either badly made or badly designed. They rattle like a toy. I thought I got one that slipped through quality control and took too long to take advantage of my Apple Care and couldn't return it when a "Guinness" told me rattling is "normal". Ended up selling it privately and lost $500 in the process cause I got sick of anyone who was nearby when it rung asking me what's wrong with it. Hope the iPhone 5S?6 is better quality or ill have to decide between windows android or blackberry.
  • Reply 4 of 89


    geoadm, you're a dope

  • Reply 5 of 89
    It is Cramer and other pundits that are talking the stock down. This way they can make a killing by buying low on Apple stock as the stock is propelled upwards by Apple's every enlarging cash hoard and profits.

    Happens all the time.

    Apple is the most manipulated stock in history.

    But all you have to do is to ride it - buy low, sell high.
  • Reply 6 of 89
    The 5 hasn't been out long enuff for apple care to have expired. You're clearly no "Guinness" at writing fake posts.
  • Reply 7 of 89
    greendisease you're the reason why iOS gets incremental updates and has become aged while android has made leaps and bounds. I hated android, but it is continually getting better while iOS isn't doing much at all, thanks to the large group of people who cyber bash anyone who has anything negative to say about Apple
  • Reply 8 of 89

    Quote:

    Originally Posted by greendisease View Post


    geoadm, you're a dope





    Nope, just a troll

  • Reply 9 of 89
    It's hasn't expired, but it doesn't extend the 15 day return policy. Yeah iOS autocomplete is usually flawless, not sure what happened
  • Reply 10 of 89
    aaarrrggghaaarrrgggh Posts: 1,582member
    I would say investors have listened (far too much historically) to Apple's guidance-- but that Tim Cook hasn't sand-bagged numbers quite as much as Jobs did in the past. But I am not quite sure if anything really matters with regards to Apple's stock now. They did a dividend, they have shown consistent growth, they have 25% "cash" on the balance sheet, they continue to design and sell products that sell in huge numbers...

    Quite frankly, the past three months has been depressing as an AAPL stockholder. That, on what will inevitably be their best quarter ever, which has positioned them well for long-term success. I do hope they announce that they completed the $10B buyback, reducing their float by 2%. It is about the only silver lining I can see at this point.
  • Reply 11 of 89
    geoadm, if there is one person who deserves a "windows android", it is you.
  • Reply 12 of 89
    nelsonxnelsonx Posts: 278member


    AAPL 490

  • Reply 13 of 89
    aaarrrggghaaarrrgggh Posts: 1,582member
    troll wrote: »
    ... iOS isn't doing much at all, thanks to the large group of people who cyber bash anyone who has anything negative to say about Apple

    There is clearly room for improvement in iOS. Some decisions that were clearly made in order to create an app marketplace have outlived their useful life. Others that force a rigid structure on use of the operating system (lack of spring board settings as an example) do limit functionality for the users who want it. The need to do an unsupported jailbreak to satisfy the desires of 15-20% of your customer base is idiotic on Apple's part. It is not the Apple Fans that prevent the change though.

    That said, everything I can see suggests that Android has refined a few things, but has done little to truly innovate over the last two years. Both camps are pretty much stuck in a rut of what comes next. It is almost like expecting the next version of iTunes to be an actual improvement rather than a re-packaging of something that worked... without any real improvements.

    The only things I see iOS really needing to fix is the whole "settings" interface, the lack of alternative input methods, and a native flashlight that chan be activated without using an app...
  • Reply 14 of 89
    geoadm wrote: »
    ...... my Apple Care and couldn't return it when a "Guinness" told me....

    Now the beer is talking to ya?
  • Reply 15 of 89
    plagenplagen Posts: 151member

    Quote:

    Originally Posted by geoadm View Post



    I though demand had slowed. Had I held an iPhone 5 before buying one I wouldn't have bought it. They are either badly made or badly designed. They rattle like a toy. I thought I got one that slipped through quality control and took too long to take advantage of my Apple Care and couldn't return it when a "Guinness" told me rattling is "normal". Ended up selling it privately and lost $500 in the process cause I got sick of anyone who was nearby when it rung asking me what's wrong with it. Hope the iPhone 5S?6 is better quality or ill have to decide between windows android or blackberry.


    Sure it's not your your brains rattling? What a piece of garbage!

  • Reply 16 of 89
    jragostajragosta Posts: 10,473member
    jragosta wrote: »
    And this new news will make Apple's stock price drop some more. I'm not even going to try to come up with an explanation since the traders pushing the stock down apparently don't care about logic or reason, anyway.

    Meanwhile, the WSJ who foisted the ridiculous rumor about weak sales will continue to be cited by sites around the world and continue to be believed no matter what nonsense they publish.

    I was just kidding, but I guess I was right, anyway. AAPL down another couple percent right now.

    Totally insane.
  • Reply 17 of 89
    blackbookblackbook Posts: 1,361member

    Quote:

    Originally Posted by aaarrrgggh View Post





    There is clearly room for improvement in iOS. Some decisions that were clearly made in order to create an app marketplace have outlived their useful life. Others that force a rigid structure on use of the operating system (lack of spring board settings as an example) do limit functionality for the users who want it. The need to do an unsupported jailbreak to satisfy the desires of 15-20% of your customer base is idiotic on Apple's part. It is not the Apple Fans that prevent the change though.



    That said, everything I can see suggests that Android has refined a few things, but has done little to truly innovate over the last two years. Both camps are pretty much stuck in a rut of what comes next. It is almost like expecting the next version of iTunes to be an actual improvement rather than a re-packaging of something that worked... without any real improvements.



    The only things I see iOS really needing to fix is the whole "settings" interface, the lack of alternative input methods, and a native flashlight that chan be activated without using an app...


     


    Android still has a lot of refinements to make. It's still lacks a lot of smoothness that iOS has had since day 1.


     


    iOS needs a better settings interface, but as you said, Apple needs to bring some innovation that none of us are expecting with this next release.

  • Reply 18 of 89
    1 intelligent comment and the rest proving my point made in response to greendisease, no doubt more to follow
  • Reply 19 of 89
    65c81665c816 Posts: 133member

    Quote:

    Originally Posted by geoadm View Post



    It's hasn't expired, but it doesn't extend the 15 day return policy. Yeah iOS autocomplete is usually flawless, not sure what happened


    And so in real life, you'd throw away $500 instead of taking it to Apple for a fix or replacement?  Seriously?

  • Reply 20 of 89

    Quote:

    Originally Posted by NelsonX View Post


    AAPL 490



     


    At this point, I'd suggest wait till after they announce the earnings before trying to buy on 'dips'. Technically AAPL has been doing terrible. 

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