Report: Apple cuts iPod, iPhone, and MacBook orders

Posted:
in General Discussion edited January 2014
Shares of Apple Inc. slumped further south on Wednesday amid a weakening macroeconomic outlook and reports of additional production cuts affecting not only the company's handhelds, but also its red-hot notebook business.



Craig Berger, an analyst with FBR Research, told clients in a research note this week that the Cupertino-based company has reduced orders for its handheld devices for the second time in as many months, likely reflecting less-than-expected sell-through in the fourth [calendar] quarter of 2007, or thus far in the first [calendar] quarter of 2008.



"For both iPods and iPhones, we believe Apple was previously targeting a roughly 50 percent quarter-over-quarter decline for first quarter units, whereas, we now think the firm is targeting a 60 percent quarter-over-quarter unit decline for first quarter units," he wrote.



According to Berger, the iPod Touch has seen the largest cuts when compared to his checks last month, suggesting demand for higher cost players has fallen off from the company's prior expectations.



"With Broadcom selling the touchscreen controller into the iPhones and iPod touches, and with Marvell selling WiFi chips into the iPhone, both of these chip firms should see slight negative revenue impacts in their March quarter, though we believe the magnitude of this bad news is relatively small," he explained.



With respect to Apple's computer business, the FBR analyst said his checks indicate the company has cut its first quarter MacBook build forecast by about 50 percent compared to the prior quarter, down from 35 percent upon his last check.



Meanwhile, iMacs appear to be bucking the trend, he said, with orders for the desktop systems expected to increases 35 percent sequentially compared to previous checks, which suggested demand for the all-in-one systems would remain relatively flat.



It should be noted that Apple on Tuesday introduced new versions of both the iPod touch and the iPhone, offering double the storage of the previous high-end models for a $100 premium. It's unclear whether any said production cutbacks may have been a precursor to these new models. Similarly, it's unclear whether reductions in MacBook build orders will be offset by demand for company's new MacBook Air.



Nevertheless, shares of the electronics maker closed down $7.36 or 5.69 percent to $122.00 on the Nasdaq stock market.
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Comments

  • Reply 1 of 70
    Quote:
    Originally Posted by AppleInsider View Post


    Shares of Apple Inc. slumped further south on Wednesday amid a weakening macroeconomic outlook and reports of additional production cuts affecting not only the company's handhelds, but also its red-hot notebook business.



    Craig Berger, an analyst with FBR Research, told clients in a research note this week that the Cupertino-based company has reduced orders for its handheld devices for the second time in as many months, likely reflecting less-than-expected sell-through in the fourth quarter of 2007, or thus far in the first quarter of 2008.



    "For both iPods and iPhones, we believe Apple was previously targeting a roughly 50 percent quarter-over-quarter decline for first quarter units, whereas, we now think the firm is targeting a 60 percent quarter-over-quarter unit decline for first quarter units," he wrote.



    According to Berger, the iPod Touch has seen the largest cuts when compared to his checks last month, suggesting demand for higher cost players has fallen off from the company's prior expectations.



    "With Broadcom selling the touchscreen controller into the iPhones and iPod touches, and with Marvell selling WiFi chips into the iPhone, both of these chip firms should see slight negative revenue impacts in their March quarter, though we believe the magnitude of this bad news is relatively small," he explained.



    With respect to Apple's computer business, the FBR analyst said his checks indicate the company has cut its first quarter MacBook build forecast by about 50 percent compared to the prior quarter, down from 35 percent upon his last check.



    Meanwhile, iMacs appear to be bucking the trend, he said, with orders for the desktop systems expected to increases 35 percent sequentially compared to previous checks, which suggested demand for the all-in-one systems would remain relatively flat.



    It should be noted that Apple on Tuesday introduced new versions of both the iPod touch and the iPhone, offering double the storage of the previous high-end models for a $100 premium. It's unclear whether any said production cutbacks may have been a precursor to these new models. Similarly, it's unclear whether reductions in MacBook build orders will be offset by demand for company's new MacBook Air.



    Nevertheless, shares of the electronics maker closed down $7.36 or 5.69 percent to $122.00 on the Nasdaq stock market.



    nonesense... id on't believe these reports... where are they coming from?
  • Reply 2 of 70
    Well the most obvious thing about this "opinion" is that the first quarter ended Dec 31, 2007 and Apple reported results on Jan 22, 2008. So clearly whatever Apple is doing has nothing to do with the already-over first quarter.



    Second, these analysts are retards. Apple buys parts from a number of suppliers. Just because they cut order for one doesnt mean they will produce less iPods or iPhones. It could mean they are getting the parts elsewhere for less money or splitting the demand to ensure competition among suppliers. It could also mean that Apple is replacing that product with something new that uses different parts. I am sure the company that used to make iPod click wheels is not selling as many click wheels because Apple is switching to touch screens. This doesnt mean that buying less click wheels = less iPod sales.



    This is just another unsubstantiated opinion based on rumors and speculation that does not cite any reliable sources and is contrary to Apple's own guidance just like the stupid rumor about 1.4 million iPhones that Apple was hiding on a shelf somewhere.
  • Reply 3 of 70
    teckstudteckstud Posts: 6,476member
    Again- why weren't the existing 8 and 16GB iTouch models reduced? The prices of those flash hard drives should be lower than 6 months ago! This quarter- who will buy them when you know by 3 months they will be slashed by $100? Their priceing is seriously going wacko lately.
  • Reply 4 of 70
    For bringing us both 1984 and 1929!!



    Recession is just a euphemism for what our chump-in-charge has got us hurtling toward: a Depression!



    Between the runaway spending on our permanent war and the irresponsible borrowing our government is indulging in and the sub-prime lending schemes created by Bush's cronies (and, of course, winked at by the "regulators" who are paid to sleep at the switch), it was only a matter of time before it all came crashing down.



    Hopefully, President Cheney and his lapdog, Bush, will go when there time comes (January 20, 2009; 12 noon) and not declare martial law as they nuke Iran.



    I predict hard times for a while, but if we can survive, America can come out better than ever.



    I can't wait to see how the Limbaughs, Hannitys, Savages, Coulters and the rest of those scumbags handle an Obama Presidency with a Hillary Clinton Cheney-esque Vice Presidency. He'll run the nice government and she'll quietly run the shadow government that sticks it to the Enemies of the State! MWAHAHAHAHAHA!
  • Reply 5 of 70
    lafelafe Posts: 252member
    Quote:
    Originally Posted by AppleInsider View Post


    It should be noted that Apple on Tuesday introduced new versions of both the iPod touch and the iPhone, offering double the storage of the previous high-end models for a $100 premium. It's unclear whether any said production cutbacks may have been a precursor to these new models. Similarly, it's unclear whether reductions in MacBook build orders will be offset by demand for company's new MacBook Air.



    This is the most sensible part of the article. Of course one would expect them to

    decrease orders on some things as they introduce hot new products.



    I don't think this is bad news at all. Just normal business practices.



    (Lovin' my new MBA, by the way!)
  • Reply 6 of 70
    The FBR "analysis" is certainly obtuse. Does his "checking" include all suppliers of the products mentioned? I have no idea. But it certainly seems possible Apple could be using additional/different sources for new products etc. I'll give more credence to these sorts of speculations when and if Apple changes their guidance for the 2nd quarter.
  • Reply 7 of 70
    nasseraenasserae Posts: 3,152member
    Thats what happens to the economy when "analysts" try to understand engineering decisions. I think Apple might have reduced these orders to prepare for new major products update specially that we did not hear anything about MacBook and iPhone/Touch hardware upgrades in Macworld. Just like what Apple did last year with the iMac.

    Researchers and analysts are messing up the economy by trying to tell people what to do with their money.
  • Reply 8 of 70
    jeffdmjeffdm Posts: 12,946member
    Quote:
    Originally Posted by AppleInsider View Post


    Craig Berger, an analyst with FBR Research



    I've not heard of the business before. FBR is apparently new to AI reporting. Craig Berger has been referenced in seven stories, and the track record looks OK.
  • Reply 9 of 70
    Quote:
    Originally Posted by teckstud View Post


    Again- why weren't the existing 8 and 16GB iTouch models reduced? The prices of those flash hard drives should be lower than 6 months ago! This quarter- who will buy them when you know by 3 months they will be slashed by $100? Their priceing is seriously going wacko lately.



    This is all about profit.. why should apple lower their prices when they have no competition for the touch? Sure, they could sell more for less - but apple is a cash cow and they are totally in control of their distribution model and retail marketing plan. Neither the consumer nor the market has yet caused apple to take pause and diminish inventory via price reductions (which will be coming in the Fall when a build up for projected holiday sales take place).



    nothing is changed except that the market does not think apple will grow as fast as they did last year. I disagree.. I think they will equal or exceed last years growth rate in a slowing economy. But the market does not agree that is very obvious in the stock price.



    what we have here is the impossible scenario, where a Consumer electronics company is selling more for the same (see growth rates) or the same for more (see new iphone and touch models).. and for several years in a row. Apple has yet to have a fire sale on a major product or major product category. I am hoping it stays that way - as it all means in the end they have no substantial competition for any of their products that causes them to have to reduce margins.



    just a month ago apple admitted they have not been able to catch up on macs to inventory levels they would like to have. These cuts mentioned are just not likely to be accurate in size or percentage as written. This is market manipulation by bears...big bears!



    they are taking high tech stocks out and shooting them now. When they are all dead we will begin anew!



    D
  • Reply 10 of 70
    kasperkasper Posts: 941member, administrator
    Quote:
    Originally Posted by JeffDM View Post


    I've not heard of the business before. FBR is apparently new to AI reporting. Craig Berger has been referenced in seven stories, and the track record looks OK.



    Berger used to be with Wedbush, he left several months ago and then joined FBR.



    Best,



    K
  • Reply 11 of 70
    g3prog3pro Posts: 669member
    AAPL is at $118.74 in after-hours trading. Yowza.
  • Reply 12 of 70
    Yeah, I'm sure ole' Craig isn't some shill trying to drive the price even lower.



    These fkkkers ought to have their asses removed. At the very least they should be forced to disclose their sources if they're going to be putting out public information that manipulates the free market.



    ESPECIALLY when that information turns out to be bullshit.
  • Reply 13 of 70
    Quote:
    Originally Posted by mdotdubz View Post


    nonesense... id on't believe these reports... where are they coming from?



    It isn't hard to believe at all considering the US economy. It would be hard to believe that ipods and iphones are a priority when many Americans can't afford to keep their house.



    We are close to a bare market and clearly the entire economy is in trouble.



    On Super Tuesdays most states has recorder numbers in the primary that is a very good indication that most Americans want change because their life isn't better off. It would be foolish not to believe that Apple is somehow not affected the economy.
  • Reply 14 of 70
    Quote:
    Originally Posted by macFanDave View Post


    For bringing us both 1984 and 1929!!



    Recession is just a euphemism for what our chump-in-charge has got us hurtling toward: a Depression!



    Between the runaway spending on our permanent war and the irresponsible borrowing our government is indulging in and the sub-prime lending schemes created by Bush's cronies (and, of course, winked at by the "regulators" who are paid to sleep at the switch), it was only a matter of time before it all came crashing down.



    Hopefully, President Cheney and his lapdog, Bush, will go when there time comes (January 20, 2009; 12 noon) and not declare martial law as they nuke Iran.



    I predict hard times for a while, but if we can survive, America can come out better than ever.



    I can't wait to see how the Limbaughs, Hannitys, Savages, Coulters and the rest of those scumbags handle an Obama Presidency with a Hillary Clinton Cheney-esque Vice Presidency. He'll run the nice government and she'll quietly run the shadow government that sticks it to the Enemies of the State! MWAHAHAHAHAHA!





    Wow, Dave, I was wrong about you. Apparently a functionally retarded person can write complete sentences from time to time. They may be 90% bullshit, but at least they're somewhat coherent. Congratulations!
  • Reply 15 of 70
    Quote:
    Originally Posted by extremeskater View Post


    It isn't hard to believe at all considering the US economy. It would be hard to believe that ipods and iphones are a priority when many Americans can't afford to keep their house.



    We are close to a bare market and clearly the entire economy is in trouble.



    On Super Tuesdays most states has recorder numbers in the primary that is a very good indication that most Americans want change because their life isn't better off. It would be foolish not to believe that Apple is somehow not affected the economy.



    Right. And the other sub-prime shoe has yet to drop. OR Apple is counting on another product to make up the slack caused by lower iPhone, iPod, MacBook sales.
  • Reply 16 of 70
    nasseraenasserae Posts: 3,152member
    Quote:
    Originally Posted by extremeskater View Post


    It isn't hard to believe at all considering the US economy. It would be hard to believe that ipods and iphones are a priority when many Americans can't afford to keep their house.



    We are close to a bare market and clearly the entire economy is in trouble.



    On Super Tuesdays most states has recorder numbers in the primary that is a very good indication that most Americans want change because their life isn't better off. It would be foolish not to believe that Apple is somehow not affected the economy.



    Don't tell me that the problem came overnight? At least almost every retail business met or exceeded expectation in 2007. People did not wake up in Nov. 07 and realize that they can't make mortgage payments anymore! The financial sector probably couldn't cover it up anymore and had it coming.
  • Reply 17 of 70
    Quote:
    Originally Posted by extremeskater View Post


    It isn't hard to believe at all considering the US economy. It would be hard to believe that ipods and iphones are a priority when many Americans can't afford to keep their house.



    We are close to a bare market and clearly the entire economy is in trouble.



    On Super Tuesdays most states has recorder numbers in the primary that is a very good indication that most Americans want change because their life isn't better off. It would be foolish not to believe that Apple is somehow not affected the economy.



    MOST Americans are doing just fine. The market you are seeing is a direct result of an over zealous FED and a predatory financial sector that should have been left to go bankrupt. Instead, the FED pumps in cash, devaluing our dollar, and the Financial sector starts coughing and wheezing ANYWAY, causing all your day traders and short-timers to start panicking because they never knew what the fuck they were doing in the first place.



    Next thing you know, the dow is down 500 pojnts in 2 months.



    But no, Join up with Fucntionally Retarded up there and blame it on Bush/Cheney.



    If you want to blame Buch, blame him for trying to bail out the losers who should be losing their homes to foreclosure. After all, if anybody's going to steal your money and redistribute your wealth, sholdn't be a Democrat?
  • Reply 18 of 70
    Quote:
    Originally Posted by NasserAE View Post


    Don't tell me that the problem came overnight? At least almost every retail business met or exceeded expectation in 2007. People did not wake up in Nov. 07 and realize that they can't make mortgage payments anymore! The financial sector probably couldn't cover it up anymore and had it coming.



    The funny thing is that Retail is still doing pretty well, and manufacturing is BOOMING.



    Unfortunately, if one sector panics, everybody snatches their cash back and freezes, waiting for it to be over.
  • Reply 19 of 70
    Quote:
    Originally Posted by macFanDave View Post


    Between the runaway spending on our permanent war...



    Not saying I support either the war or Pres. Bush, but if I remember correctly, war spending is a stimulus to the economy. In fact, I distinctly remember learning that WWII greatly helped us leap out of the great depression. http://en.wikipedia.org/wiki/Great_D...t_and_recovery



    I can only imagine how bad things would be right now if we WEREN'T spending millions a day on Iraq.



    Again, not a justification for war, obviously. Just an economic comment.



    -Clive
  • Reply 20 of 70
    I would note that the MACBOOK AIR is the best selling MAC now according to APPLE store web site, so some loss of MacBook sales is expected with the AIR clearly exceeding goals. As for the Touch and Iphone. It would seem odd for Apple to react to slipping sales by introducing higher priced models. I suppose increased margins will help offset lost sales, but the Apple model has been to be aggressive in dropping prices to increase sales. Berger is a former WeBush Morgan guy - he follows MRVL and BRCM - I would guess his insight into Apple is limited to those two companies. If these companies are being phased out of newer models ( who is supplying the new Mac Air track pad?) or adjusted for product mix he will only see the negative. Lot of bad news about Apple because it makes press - but the fact is that the are still leading the PC market in sales increase %, number 2 worldwide in smart phones and #1 in MP3 players.
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