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iPhone 5 components order cut: Apple under pressure?

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#46 einsteinbqat

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Posted 16 January 2013 - 03:35

Just a little perspective. Let's just wait and see.

Why The WSJ Got The 'iPhone Demand Is Crashing' Story All Wrong

A decade ago, MTV debuted a show called Punk’d in which Ashton Kutcher would play elaborate practical jokes on celebrities before the big reveal at the end of each episode. While the setup isn’t quite the same, it’s possible that Japan’s Nikkei played the role of Kutcher this Sunday and the Wall Street Journal acted as the duped celebrity with a breathless report suggesting iPhone orders are about to fall off a cliff. Apple’s stock has been under a ton of pressure lately, falling about 30 percent from its all-time high and this latest bit of apparent bad news has helped drive it down more, to below $500 a share today.

It started when the Journal reported: “Apple’s orders for iPhone 5 screens for the first quarter, for example, have dropped to roughly half of what the company had planned to order, the people said.” What’s missing from that quote, however, is what Nikkei originally included and can still be found on Reuters (although no longer on WSJ): “Apple has asked Japan Display, Sharp and LG Display Co Ltd to roughly halve supplies of LCD panels from an initial plan for about 65 million screens in January-March, the Nikkei cited people familiar with the situation as saying.” And that 65 million number we know is completely absurd. Just how absurd? Well, let’s break it down.

For calendar fourth quarter, the one that just ended, the iPhone forecast is for 43-63 million phones. (Not all of those are iPhone 5s, of course, given that the 4s and 4 are still available.) The median of those estimates is around 49 million and a high estimate would put the iPhone 5 at 40 million of those. Since the latest iPod Touch uses the same screen, it’s possible another 5 million screens would be used in the Christmas quarter for that. So let’s say there is a total need for 45 million screens in the quarter that just ended.

Every year since the iPhone has launched, Apple has seen some seasonal drop off from the end of the year into the first quarter (what Apple calls Q2, but what is the first calendar quarter). The iPod Touch, in particular, sees a huge drop off. So no matter how strong iPhone 5 is selling, if the company needed 45 million screens last quarter, it would need fewer this quarter. How many? Perhaps 40 million or so. Of course, if Apple had ordered more than it needed last quarter to make sure that it was ahead of the game, it would need fewer still going into winter and might only require 30-35 million. The truth is, we don’t know,, but then neither does Nikkei, or its unnamed sources.

None of this stopped a credulous WSJ from running the story as front-page news just eight days ahead of Apple’s Jan. 23 earnings announcement. It’s pile-on season for the Cupertino, Calif. consumer-electronics giant, which has apparently “lost its edge” according to most everything you read these days. It’s an interesting spin given that the company sold 37 million iPhones in the holiday quarter this year and even the lowest end of the forecast would be a 20 percent boost to that number. (At 50 million, year-over-year growth would be 35 percent.)

Nevertheless, the latest rumors about Apple slashing component orders, in fact, come on the heels of supposedly positive developments at competitors. First, we heard “good news” from Nokia, which reported shipments of 4.4 million Lumia phones in the year-end quarter. Never mind that we are talking less than 2 percent market share for Nokia or that sales were boosted by heavy discounting, often down to $99 at retail — less than half what competing phones sell for. This is good news in the land of Nokia. It might not be repeatable as the Windows Phone platform has yet to prove especially popular, but was unequivocally spun as a positive pretty much everywhere it was reported.

Similarly, Cnet was very excited about Samsung’s announcement that the Galaxy S phone line had crossed the 100 million mark in total sales. The phone is so desirable, “Sales of the flagship Galaxy S3 reached 30 million units in 5 months, and 40 million in 7 months, with average daily sales of about 190,000 units.” You’d think that it’s the hottest thing going with those numbers. Of course, as we were just discussing above, in the quarter just ended, Apple will have sold about as many iPhone 5′s as Samsung has sold Galaxy S3′s in 7 months! This is what the “experts” are already calling trouble and they haven’t seen the numbers yet.

Now, of course, Samsung is also selling the prior generation S2, which Cnet tells us, “…is described as a steady bet after recording sales of over 40 million in 20 months.” So that’s about 2 million a month for that model to go with the 17 milllion S3 phones Samsung apparently moved in Q4. In other words, if we just compare the last two generations of phones, Apple sold somewhere around 35-45 million last quarter while Samsung moved about 23 million. It’s certainly true that Samsung has a number of less-expensive entry models and will outsell Apple in raw numbers. But when one looks at “profit share” and wonders why Apple will continue to earn more of it in smartphones than Samsung, those numbers tell the story.

Certainly, if iPhone 5 demand is indeed falling off the cliff that the WSJ claims it is, things will change next quarter. And perhaps Apple’s earnings report next week will tell us more about that. Then we’ll find out who’s really getting punk’d.




#47 FloatingFatMan

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Posted 16 January 2013 - 08:41

Yes, Apple needs to risk and launch game-changers like it used to with Jobes.

I dont think this new Head-Man is up for this, i think he will be Milking the Cow instead of pointing the way


Thing is, Apple have been milking one cow so long, that they've ended up with this...

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#48 +Quillz

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Posted 16 January 2013 - 10:55

And the Apple of today is nothing like the Apple of a year ago. Jobs was Apple, and without him, they're just another mediocre tech company that overcharges for its average quality products.

I certainly agree with this. But the main difference is that the Apple of today still has upwards of $100 billion in cash, versus the Apple of the 90s that probably had less than a fraction of that. The innovation is certainly gone, it has been for a while, but Apple still has plenty of money to survive for a long time. Or so it would seem.

#49 +techbeck

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Posted 16 January 2013 - 13:33

you know why they sell twice as many ?

do you know how many android tablets are for sale in New York that are only $50-80 USD ?

cheap phones and tablets all over the world with crappy super super crappy specs all count to the total number its really a shame

here is a link to 12 under $100 cheap A@@ pieces of junk
http://staenz.com/75...s-with-wifi-3g/

its not fair because every apple product is top quality

India unveils $30 tablet PC (Android) – India’s iPad

http://latestpctable...ndias-ipad.html

this is why when I hear droid out sells apple I laugh because of a $30 Droid


So, why are cheap phones a bad thing. For someone who only does web/facebook...a $80 android would do just fine. Hell, i know several people with budget droids who do email/web/facebook and they love it. It suits them. Want to do more? Then Android users have other options. So you can pay a little for the tasks/features you only use instead of paying 400+ for a bunch of features you will never use. So you may call those super crappy specs...but it depends on what you use the device for.

Cheap andorid tablets are a diff story. My mom got one on a Verizon deal. Buy a phone, get a free tablet. I told her not to get the tablet, but she didnt listen.

#50 DKAngel

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Posted 16 January 2013 - 14:00

Apparently according Wallstreet anaylst this is all noise and are the result of better component yields. The iphone 5 is still selling like hotcakes. Iphone 5 compared to anything on the market is still pretty good. I tried the S3 and was shocked how ****ty the camera is compared to both the Lumia 920 and the iphone 5.

rofl, yet im rather impressed on the camera and i reckon the iphones camera is a piece of ****

#51 DKAngel

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Posted 16 January 2013 - 14:06

So, why are cheap phones a bad thing. For someone who only does web/facebook...a $80 android would do just fine. Hell, i know several people with budget droids who do email/web/facebook and they love it. It suits them. Want to do more? Then Android users have other options. So you can pay a little for the tasks/features you only use instead of paying 400+ for a bunch of features you will never use. So you may call those super crappy specs...but it depends on what you use the device for.

Cheap andorid tablets are a diff story. My mom got one on a Verizon deal. Buy a phone, get a free tablet. I told her not to get the tablet, but she didnt listen.

ive got 2x 120$ cheap asian android tablets that i still find better than the ipad because they dont seem as boring and generic and they are built great have relaly good screens on them , a decent amount o ram and i can customise them to how i liek also, with the ipad i get just sqaures on a screen that look like my 2yr olds toys

#52 .Neo

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Posted 16 January 2013 - 22:44

I'm not sure this is as much about Apple as Android. Android is eating Apple for lunch. Apple may sell 25 to 30 million phones a quarter but Android will sell twice that. The thing is, without Jobs Apple doesn't seem to have an answer.

Yet Apple takes like 75% of the total profit being made off of smartphones. When do people like yourself finally realize that Apple isn't in it to have the largest market share? If they truly wanted that they would make OS X and iOS available to all manufacturers. Their model will give them the number one spot for a limited time only.

#53 Growled

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Posted 17 January 2013 - 01:09

^ Oh, I never mentioned profit. Everyone knows they make the highest profits per device on the market. I was talking devices sold. Of course, Apple may sell less devices if their competitors sell more. The market can only bare so more.



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