5 ms·

Apple cuts orders for iPhone 5 parts on weak demand

31 points by dataminer 14y ago

simonh 14y ago
These reports based on reduced orders to suppliers are pretty routine, either in the post-holiday period or a few months before the roll-out of a new model. Without actual info on sales numbers, it's just hearsay.
aneth4 14y ago
I suspect this type of information is pushed to manipulate the market and provide flip opportunities for hedge funds. Apple is down 5%. Imagine if you knew on Friday this story was going to be published. Given Apple's forward looking cash position, the stock is extremely underpriced, even if sales were to decline significantly.
- rednukleus 14y ago
  > Given Apple's forward looking cash position, the stock is extremely underpriced. The market seems to believe that the level of sales and/or profits per sale are unsustainable in the medium term. Stocks the size of Apple are never "extremely" under/over priced.
  - aneth4 14y ago
    > Stocks the size of Apple are never "extremely" under/over priced. Size has nothing to do with whether a stock is over or underpriced. Apple could rather conservatively be valued at $600 or even $700 per share. I'd say that's an extreme underpricing, particularly given the difference in market cap that would make. > The market seems to believe that the level of sales and/or profits per sale are unsustainable in the medium term. There are other reasons for a stock to be depressed that may in fact have to do with the size of Apple. For sure they are in a fickle market and there is risk.
    - rednukleus 14y ago
      > Size has nothing to do with whether a stock is over or underpriced. The reason why size does matter is that there are thousands of analysts constantly monitoring the stock, and companies are constantly trading based on their informed opinion of the value of the stock. A small, relatively infrequently traded, stock is far more likely to get out of line with fundamentals.
      - aneth4 14y ago
        You could also make an argument that a large stock like Apple gets out of line with fundamentals because it represents such a large portion of pretty much every institutional portfolio that could own the stock, so movements are often due to portfolio rebalancing than fundamentals. This seems likely to be the case with Apple right now.
        rednukleus 14y ago
        Then you would be making an argument that flies in the face of every investment textbook Ive ever read.
        aneth4 14y ago
        Significant demand in a large cap stock mostly comes from large institutional investors. Large institutional investors are finite, and those investors must limit how much any stock represents in their portfolio. Regardless of what your textbooks say, it is true situation.
        rednukleus 14y ago
        It only takes a few hedge funds and a couple of Goldman Sachs to balance out any of those effects. I'm sorry, but you clearly have no idea what you are talking about.
        aneth4 14y ago
- danso 14y ago
  I was going to say, "Well when has Apple been this low before", expecting the answer to be something like "Before the iPhone 4"...but it was only back in Feb 2012 that the stock was at ~$500 http://www.google.com/finance?q=NASDAQ:AAPL http://www.google.com/finance?q=NASDAQ:AAPL I don't know what to think from that, other than there was a huge frenzy that seems to be settling down? But are Apple's chances of dominance as great as they were 11 months ago? Android seems to be gaining fast on the phone and tablet front. And Google Glasses is the hot new thing on the horizon...
- coob 14y ago
  I think you are correct. AAPL is ripe for short term manipulation. There are a hundreds of thousands of call options expiring on January 19 with a strike range of $550-$800. Expect AAPL to run after then. Here's more info: http://seekingalpha.com/article/1002601-buy-apple-on-january-18 http://seekingalpha.com/article/1002601-buy-apple-on-january...
cubicle67 14y ago
There's a comment by matrix07 on AppleInsider I think may be worth a read: Look at the number here http://www.reuters.com/article/2013/01/14/us-apple-iphone-demand-idUSBRE90D04B20130114 http://www.reuters.com/article/2013/01/14/us-apple-iphone-de... Apple was expected to order 65 million screens? Considering the best iPhone quarter is only 37 mil., and that's Christmas quarter. WTH Apple to order this much in a quarter AFTER Christmas? Makes no sense. [Edit: link to comment http://forums.appleinsider.com/t/155446/wsj-apple-cuts-iphone-5-component-orders-in-half-due-to-weak-demand#post_2258338 http://forums.appleinsider.com/t/155446/wsj-apple-cuts-iphon...]
- defective 14y ago
  BGR also notes that the same screen is used for both the iPhone 5 and the iPod Touch. It can't simply be assumed that the iPhone demand has lessened because Apple orders less of one component used in multiple lines of products. http://bgr.com/2013/01/14/iphone-5-analysis-component-cuts-291307/ http://bgr.com/2013/01/14/iphone-5-analysis-component-cuts-2...
  - mikecane 14y ago
    Now that's interesting. Did iPad Mini kill iPod Touch sales? $299 and $399 vs $329 iPad Mini. Hm.
bertomartin 14y ago
Long or Short, would you put your money on your prognostications?
ajays 14y ago
Aside: I, for one, am extremely disappointed in the iPhone5. Its WiFi sucks ass, to put it delicately. I just got back from traveling abroad, and when I'm there, I rely heavily on WiFi. My 3GS had no issues; it use to work like a champ. But the iPhone5? Lord! It couldn't hold the signal; it wouldn't log in to the (WPA2) network even though it would see it; etc. etc. Apple's response so far? Try disable WPA2 and remove all authentication. Really?!?! And the problem got worse after iOS 6.0.2 After seeing my issues, several friends of mine have decided to hold off upgrading till they're sure the issues are worked out (in iOS 6.1.0?). At least 1 person I know picked the Samsung instead. Sorry to threadjack.
- bertomartin 14y ago
  That's the first time I'm hearing anyone complain about wifi issues. Everyone I know that have an iPhone5 have had no such complaints.
  - ajays 14y ago
    checkout this thread on the Apple discussion forums: https://discussions.apple.com/thread/4322714 https://discussions.apple.com/thread/4322714 (it's already at 219 pages and counting). There are many such threads in that forum.
jxdxbx 14y ago
Typical "analyst" bullshit. Even if the story were true, alternate explanations seem more likely. E.g. Apple is moving to a 6-month tempo for updates, which would affect component ordering about now. Or, it could just be that Apple is moving more of its component orders from one manufacturer to another--many iPhone components are multiply-sourced.
huxley 14y ago
When there is no news, they make up some news, see a similar story from 2011: http://news.cnet.com/8301-13506_3-57321362-17/slower-iphone-4s-demand-making-apple-rethink-supply-orders/ http://news.cnet.com/8301-13506_3-57321362-17/slower-iphone-...

31 points by dataminer 14y ago

These reports based on reduced orders to suppliers are pretty routine, either in the post-holiday period or a few months before the roll-out of a new model. Without actual info on sales numbers, it's just hearsay.

aneth4 14y ago

I suspect this type of information is pushed to manipulate the market and provide flip opportunities for hedge funds. Apple is down 5%. Imagine if you knew on Friday this story was going to be published. Given Apple's forward looking cash position, the stock is extremely underpriced, even if sales were to decline significantly.

rednukleus 14y ago
> Given Apple's forward looking cash position, the stock is extremely underpriced. The market seems to believe that the level of sales and/or profits per sale are unsustainable in the medium term. Stocks the size of Apple are never "extremely" under/over priced.
- aneth4 14y ago
  > Stocks the size of Apple are never "extremely" under/over priced. Size has nothing to do with whether a stock is over or underpriced. Apple could rather conservatively be valued at $600 or even $700 per share. I'd say that's an extreme underpricing, particularly given the difference in market cap that would make. > The market seems to believe that the level of sales and/or profits per sale are unsustainable in the medium term. There are other reasons for a stock to be depressed that may in fact have to do with the size of Apple. For sure they are in a fickle market and there is risk.
  - rednukleus 14y ago
    > Size has nothing to do with whether a stock is over or underpriced. The reason why size does matter is that there are thousands of analysts constantly monitoring the stock, and companies are constantly trading based on their informed opinion of the value of the stock. A small, relatively infrequently traded, stock is far more likely to get out of line with fundamentals.
    - aneth4 14y ago
      You could also make an argument that a large stock like Apple gets out of line with fundamentals because it represents such a large portion of pretty much every institutional portfolio that could own the stock, so movements are often due to portfolio rebalancing than fundamentals. This seems likely to be the case with Apple right now.
      - rednukleus 14y ago
        Then you would be making an argument that flies in the face of every investment textbook Ive ever read.
        aneth4 14y ago
        Significant demand in a large cap stock mostly comes from large institutional investors. Large institutional investors are finite, and those investors must limit how much any stock represents in their portfolio. Regardless of what your textbooks say, it is true situation.
        rednukleus 14y ago
        It only takes a few hedge funds and a couple of Goldman Sachs to balance out any of those effects. I'm sorry, but you clearly have no idea what you are talking about.
        aneth4 14y ago
danso 14y ago
I was going to say, "Well when has Apple been this low before", expecting the answer to be something like "Before the iPhone 4"...but it was only back in Feb 2012 that the stock was at ~$500 http://www.google.com/finance?q=NASDAQ:AAPL http://www.google.com/finance?q=NASDAQ:AAPL I don't know what to think from that, other than there was a huge frenzy that seems to be settling down? But are Apple's chances of dominance as great as they were 11 months ago? Android seems to be gaining fast on the phone and tablet front. And Google Glasses is the hot new thing on the horizon...
coob 14y ago
I think you are correct. AAPL is ripe for short term manipulation. There are a hundreds of thousands of call options expiring on January 19 with a strike range of $550-$800. Expect AAPL to run after then. Here's more info: http://seekingalpha.com/article/1002601-buy-apple-on-january-18 http://seekingalpha.com/article/1002601-buy-apple-on-january...

cubicle67 14y ago

There's a comment by matrix07 on AppleInsider I think may be worth a read: Look at the number here http://www.reuters.com/article/2013/01/14/us-apple-iphone-demand-idUSBRE90D04B20130114 http://www.reuters.com/article/2013/01/14/us-apple-iphone-de... Apple was expected to order 65 million screens? Considering the best iPhone quarter is only 37 mil., and that's Christmas quarter. WTH Apple to order this much in a quarter AFTER Christmas? Makes no sense. [Edit: link to comment http://forums.appleinsider.com/t/155446/wsj-apple-cuts-iphone-5-component-orders-in-half-due-to-weak-demand#post_2258338 http://forums.appleinsider.com/t/155446/wsj-apple-cuts-iphon...]

defective 14y ago
BGR also notes that the same screen is used for both the iPhone 5 and the iPod Touch. It can't simply be assumed that the iPhone demand has lessened because Apple orders less of one component used in multiple lines of products. http://bgr.com/2013/01/14/iphone-5-analysis-component-cuts-291307/ http://bgr.com/2013/01/14/iphone-5-analysis-component-cuts-2...
- mikecane 14y ago
  Now that's interesting. Did iPad Mini kill iPod Touch sales? $299 and $399 vs $329 iPad Mini. Hm.

bertomartin 14y ago

Long or Short, would you put your money on your prognostications?

ajays 14y ago

Aside: I, for one, am extremely disappointed in the iPhone5. Its WiFi sucks ass, to put it delicately. I just got back from traveling abroad, and when I'm there, I rely heavily on WiFi. My 3GS had no issues; it use to work like a champ. But the iPhone5? Lord! It couldn't hold the signal; it wouldn't log in to the (WPA2) network even though it would see it; etc. etc. Apple's response so far? Try disable WPA2 and remove all authentication. Really?!?! And the problem got worse after iOS 6.0.2 After seeing my issues, several friends of mine have decided to hold off upgrading till they're sure the issues are worked out (in iOS 6.1.0?). At least 1 person I know picked the Samsung instead. Sorry to threadjack.

bertomartin 14y ago
That's the first time I'm hearing anyone complain about wifi issues. Everyone I know that have an iPhone5 have had no such complaints.
- ajays 14y ago
  checkout this thread on the Apple discussion forums: https://discussions.apple.com/thread/4322714 https://discussions.apple.com/thread/4322714 (it's already at 219 pages and counting). There are many such threads in that forum.

jxdxbx 14y ago

Typical "analyst" bullshit. Even if the story were true, alternate explanations seem more likely. E.g. Apple is moving to a 6-month tempo for updates, which would affect component ordering about now. Or, it could just be that Apple is moving more of its component orders from one manufacturer to another--many iPhone components are multiply-sourced.

huxley 14y ago

When there is no news, they make up some news, see a similar story from 2011: http://news.cnet.com/8301-13506_3-57321362-17/slower-iphone-4s-demand-making-apple-rethink-supply-orders/ http://news.cnet.com/8301-13506_3-57321362-17/slower-iphone-...