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The Strange Math of Apple's Alleged Massive iPhone 5 Order Cuts
zacharye writes "The Sunday evening Wall Street Journal article claiming that Apple had cut its iPhone 5 display orders drastically for the March quarter made quite a splash. The way WSJ wrote its piece seemed to support the original Nikkei claim about Apple cutting its iPhone 5 display orders in half from the originally planned order of 65 million units. This would be a massive adjustment. But Apple uses the same new display type for both iPhone 5 and the latest iPod touch. Neither WSJ nor Nikkei addressed this, however — both seemed to be referring to just iPhone 5 displays. The math just doesn't add up."
Someone is getting rich out of this
Watch those corners
i rarely see ipod touches these days in NYC because iphones are so cheap. still means apple is not going to grow sales enough to keep the stock going up.
stocks go up on growth. apple needs at least 20% revenue/profit growth to move the stock.
in the US more than 50% of people have smartphones. the only people who don't have them are privacy nuts and old people. even my mom knows an ipad 5 is coming soon.
apple's profits are in the $50 billion range.
law of large numbers
who else is left to buy an iphone 5? not the people in developing markets who can't afford them
same with Mac's. Nice computers, but anyone willing to spend $2000 on a laptop already has one. and the ipad is making a traditional computer something you rarely use at home
this is the genius of Google's latest nexus phone. why compete with apple where they will lose when they can grab market share where apple can't go?
Stocks went SO CLOSE to dipping below 500. Lowest I can see is 500.13 USD.
If Apple had previously ordered 65MM 4" screens their total iPhone sales would be about 50MM iPhone 5's, 20MM 4/4S (plus 10MM iPod touch units). Quite frankly, that is impossible territory there for the December quarter, but filling the channel and a subsequent draw-down as they move more to a 6-month update cycle could possibly explain a "50% drop in screen orders."
Quite frankly, crap like this makes me want to get out of the stock market altogether. (Which is exactly what it is intended to do.)
The math adds up once you view it through the lense of stock market manipulation. I suspect the source of the rumour will match up rather nicely with someone who made an enormous amount of money shorting Apple today.
why is BGR even trying to do math on something it has no numbers on?
did you forget to take your meds?
Quite frankly, crap like this makes me want to get out of the stock market altogether.
Like every other Apple shareholder that is why the value of 13 Dells market cap got wiped off Apples Market cap in three months. I notice Apple shares continue to plunge..currently hugging just above 500. Its also why you see less people singing Apples praises here.
In reference to spin. "Apple's orders for iPhone 5 screens for the January-March quarter...dropped to roughly half" and "The latest model comes with a longer, four-inch screen compared with the 3.5-inch screens used in all previous iPhone models.". There is no wiggle room there.
Apple has serious competition now. Back when they were the only game in town they could do as they pleased.
But fat margins and high market share rarely last. And when margins and market share come down so does the stock.
A company whose primary product is a smart phone has the highest market capitalization in history? That smacks of Tulips. You know it can't last.
The article seems to suggest that the Iphone 5 sales weren't that bad, so the cut in display orders wouldn't make sense because the Ipod Touch uses the same screen.
So what are the Ipod touch numbers? I have no idea what they are, but I could see the Ipod Touch losing huge marketshare with all the tablets and smartphones being tossed about, Maybe this is an attempt to hid the fact that one of Apple's cashcows has finally fallen?
Or maybe the Ipod Touch sales are still very high, and the cut in display orders info isn't really that dramatic - or maybe the cut is spread out among a few months and Nikkei got its info mixed up.
There's not enough info to know, and barely enough for the brave to make gambles on.
There are rumors that Apple is changing displays for the iPhone 5S ...
It's unlikely Apple completely blew the estimated sales for iPhone 5 in the March quarter by that much. The most likely explanation is that the rumor is just wrong. Next most likely is that the 5S is coming soon and gets a slightly tweeked screen. Maybe even just a slightly different part from the same supplier. Whoever leaked the info saw the partial cancellation, but isn't aware of the replacement order. And, remember, even if 5S isn't coming until the next quarter, Foxconn might have to start taking delivery of screens this quarter, in order to ramp up production and build launch inventory.
Most people thought Apple patented rounded rectangles. But in reality they have patented all roundings including rounded numbers. So that explains the difference.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Without the iPhone or iPad, Apple would still be very profitable
...no it wouldn't what a load of rubbish,its profits would take a massive dive instantly. Most of their profits come from the iPhone. Secondly without the iPhone/iPad is Apple relevant.
I've never met a person who does the wi-fi thing you mentioned.
Even if you're out of range of Wi-Fi, you can still make calls on a dumbphone. U.S. carriers tend charge a far larger recurring fee for a smartphone than for a dumbphone. For example, dumbphone plans on Virgin Mobile (a Sprint MVNO) start at $5 per month. Until this gap closes, some people will still carry a dumbphone and a 4" tablet (iPod touch, Galaxy Player, etc.) to save on the recurring fee.
but I could see the Ipod Touch losing huge marketshare with all the tablets and smartphones being tossed about
Technically, a "tablet" and a "PDA" are the same thing in different sizes, making iPod touch a 4" tablet. But perhaps you're right that some people who would have bought a 4" tablet are buying a 7" tablet (Kindle Fire and Nexus 7) or Apple's own 8" tablet (iPad mini) instead.
If only you could get a discount for paying full price for *any* phone.
Unfortunately, that's not possible in the US.
It's been possible since the first prepaid carrier offered a smartphone. By now, Virgin Mobile USA (a Sprint MVNO) offers the iPhone 4S with 1200 minutes, 2.5 GB/mo of 3G data, and unlimited EDGE data for about $40 per month. See if your favorite carrier offers prepaid plans.
If you're actually in an area where it's feasible to go without an actual phone service, good for you. If you're not, then there's an inherent cost in having a cell phone, which needs to be considered. It's the difference in cost that's the issue.
Case in point, if you're already paying that $50/mo for another phone
Which I'm not. I carry a $5/mo flip phone for those few calls I can't make on a land line, which are mostly to arrange rides and the like.
I've said before that the world's love affair with Apple is slowly eroding, and so it seems iPhone 5 orders are not quite what Apple was expecting. 2013 is going to be a very tough year for Apple and coming out with cheap iPhone mini's or doing minor revamps of existing products are not going to cut it. Unless Apple does something truly innovative with iOS and iPhone in general, this slow erosion of their market will pick up speed.
Cutting back screen orders because they want to introduce a new product does not make any sense, why place an order so large in the first place? Is Apple so completely out of touch they don't even have a firm release cycle for future products when they ship a new product? Like they didn't know the 5S release cycle when they shipped the iPhone 5? I would be dumping Apple stock if this is their emerging trend, release a product with ridiculous expectations on sales, cross their fingers, and when the sales don't reach their inflated estimates dump the product and rush a new version to market???
Nothing about this speaks of a company that is being run properly.
I haven't thought of anything clever to put here, but then again most of you haven't either.
The cheapest payLo plan I see is $20/mo.
That's true among monthly plans, which appear to be designed for people who have dropped their land line. But pay as you go plans start cheaper: $20 per 90 days. They must have eliminated the $15 per 3 months tier fairly recently. It appears $20 buys 400 minutes in 1 month or 100 minutes in 3 months.
Apple has only recently started paying dividends and it doesn't look like they're giving away that much cash at all.
Try googling:
apple call options jan 19
Over half a billion dollars could be liberated (in the Iraq sense) if AAPL remains below $550 through this date, then rises.
Maybe they have enough displays to make all the iPhone 5's they're going to sell, so the iPhone 6 can be released sooner. The quicker they're churned out, the more they'll sell.
I hate Apple as much as the next guy, but that sir, is a mindless rant.
It might be mindless, but so is AAPL. Did you know they are finally going to "innovate" Dick Tracy's wrist phone? Wow, that's inventive - or it was in 1935 or so for a cartoonist.
Why guess when you can know? Measure!
Um...no...someone posted Apple's 3rd quarter statement on here in another thread and no, they aren't profitable without the iPhone / iPad. The iDevice market in combination with iTunes makes up 80% plus of Apple's sales right now. If you take away the iDevices, I think iTunes folds as IMHO there's much better music and content markets online (Amazon, Netflix, Russia, etc...).
Unless Apple can stay on top of the phone and tablet market, or create yet another market, their future isn't as bright as their immediate past.
Modern supply chain systems make extensive use of EDI and ERP systems. When you are Apple, and you really want to make sure you have sufficient capacity to supply your product, you tool up two suppliers to supply the full volume of your sales. As such, the EDI system says that in 6 months you will ship 32 million units x 2 suppliers = 65 million units.
At the 3 month mark, both suppliers are fully tooled up. As such, you cut the 3 month advance planning order to 16 million units x 2 suppliers = 32 million units. This should be close to actual sales. This is done, because the automated ERP systems will actually build 65 million phones, unless someone tells them to stop.
Crazy numbers like this happen all the time in some industries. 6 month = 2 million units/month. 3 month = 1 million/month. 1 month = 1.5 million/month. 2 week = 0.5 million/week. 1 day = 0.2 million/day. The numbers can be all over the place. Sometimes, the suppliers have no idea how many parts will be shipping the next day.