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."

Comments

Market manipulation?

[Dupple]

Someone is getting rich out of this

Re:Market manipulation?

[Dupple]

That's an interesting read. Perhaps they've spotted a pattern. This story is very similar one that was reported last year regarding the 4S

http://www.forbes.com/sites/ericsavitz/2011/11/09/apple-reportedly-tells-iphone-parts-makers-to-delay-shipments/

I wonder what we'll see this time next year.

Re:Market manipulation?

[UnknowingFool]

Or someone not using common sense. BGR points out that the best estimates of Q4 sales is 52M iPhones (during a holiday season). The original estimate of 65M for Q1 is being halved. First of all who put out the original estimate (certainly not Apple)? Second of all, whoever put the original estimates forgot that sales of consumer electronics most likely drop after the holidays. So lack of common sense.

Re:Market manipulation?

[phantomfive]

Usually the Wall Street Journal gets it accurate when it speculates on Apple, so unless they're trying to throw away their reputation and score a quick buck, probably not.

Re:Market manipulation?

[tripleevenfall]

I think part of this is a function of android getting better, and the user experience being a lot better than it used to be.

But - I think this says more about the iPhone 5 than anything else. The 5 didn't really bring much to make Apple fans feel like they had to upgrade. An extra row of icons? Nobody cares about that. LTE is nice, but given the pervasiveness of wifi and the fact that most people are dealing with data caps, it didn't drive sales.

After 5ish years, someone is finally pushing Apple in the mobile space. They'll have to begin innovating again.

Competition is a good thing.

Re:Market manipulation?

[NatasRevol]

Having worked in a newsroom and posted news stories online, I'll state that no good ones do.

Re:Market manipulation?

[girlintraining]

Except that is an article from 2010 about possible insider trading, not about the alleged market manipulation by driving down the stock price through rumors and FUD like seemed to start happening in 2012.

Yes, last time they used a spoon. This time they're using a fork. However you're what's for dinner so does it really matter?

Re:Market manipulation?

[RoccamOccam]

There also hasn't been a successful jailbreak of iOS 6 on any device newer than 2010.

Personally, I don't find that to be a selling point.

Re:Market manipulation?

[atlasdropperofworlds]

[quote]... iOS has never had a single issue of malware in the wild[/quote]

No. The first worm was in 2009, and it was possible to jailbreak iOS from safari (it still is, in some cases) -- http://appleinsider.com/articles/09/11/09/first_known_iphone_worm_rickrolls_jailbroken_apple_handsets.html

Aside from that, I do expect to be able to jailbreak my devices. If that costs me something in day-to-day security, I'm completely fine with that. I always want ultimate control over my hardware. The reason why you think Android is malware infected is because we have the option of installing our own software without the store. This is why developers are complaining that it's a platform for piracy - there is a path for software onto the device that is user-controlled. Also, google supplies the bootloader unlocking tools, effectively giving their blessing to people who want to jailbreak.

Re:Market manipulation?

[afidel]

Ditto, I like having control of my hardware, TYVM.

Re:Market manipulation?

[Anonymous Coward]

You do, but really most of the Apple ecosystem does not want jailbreaks, and firmly supports Apple's active patching of JB-ed devices.

As a developer, jailbreaking means piracy. Installious may be gone, but there are plenty of other services that do the same thing. So, jailbroken devices take food out of our mouths. I have to thank Apple that the 4S and 5 have kept the leeches at bay for a very long time, and with the Dev Team's back broken, JBs will end up a moot point because if they do happen, the next Apple model will be out, with the next iOS version patching it.

As a user, iOS's security depends on the jail system. JB-ed devices have no security in place whatsoever (unlike rooted Android phones which at least still have separation via UIDs.)

No non-jailbroken device has ever have had malware in the wild, and this is where the proof is in the pudding. I can be assured that data stored on an iOS device will be protected, by both storage encryption, and by extreme protection even on the CPU itself. No other mass-market device can give this assurance outside of milspec stuff that only works in SIPRnet.

Apple

[the eric conspiracy]

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.

Re:so? apple is still selling less product

[ArcadeMan]

iPhones are so cheap? Are you insane?

iPhone 5 is what, around $200 with a 2-years contract in the USA? But these monthly fees are likely to be around $50 or more, so $200+(24x$50)=$1400 at the least.
iPod touch 5th generation is $300. That's less than a quarter of the cost. There's free wi-fi everywhere in NYC so iPod touch + VoIP = free calls.

And if people are too stupid to include their monthly fees in the cost of their iPhone, too bad. You can't fix stupid.

More likely explanations

[Chuckstar]

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.

It is an Apple patent.

[140Mandak262Jamuna]

Most people thought Apple patented rounded rectangles. But in reality they have patented all roundings including rounded numbers. So that explains the difference.

Re:so? apple is still selling less product

[Swampash]

Stocks go up on profit. And profit does not grow only with revenue. You can also deduct spendings. That's how big businesses work. They spend enormously for marketing, branding, hire unnecessary amount of people, to build a brand.

Profit share in the phone industry: Apple 75%, Samsung 24%, everyone else who cares.

Product design team: Apple 16 people, Samsung 1000+ people.

Marketing spend 2009-2012: Apple approx 2.6 billion dollars. Samsung Electronics division alone approx THIRTY THREE BILLION DOLLARS.