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Apple (AAPL) has cut iPhone 5 component orders for calendar Q1 due to weaker-than-expected...

Apple (AAPL) has cut iPhone 5 component orders for calendar Q1 due to weaker-than-expected demand, sources tell the WSJ; display orders are said to be cut by ~50%. The Nikkei also claims display orders have been halved, albeit from an elevated level of 65M. The articles back up analyst reports of iPhone production and component order cuts, and raise the question of whether Apple needs a cheaper iPhone and/or one with a larger display to bolster its international share. Suppliers on watch: LPL, CRUS, OVTI, QCOM, BRCM, SWKS, TQNT, AVGO.
Comments (94)
  • Bad news for Apple, good news for other manufacturers. I wonder how many people from the "Apple is going to $1000" are going to comment here.
    13 Jan 2013, 09:48 PM Reply Like
  • I'm not in the "Apple to $1000" camp, but I think a current fair value would be about $100 higher from here. I've already gone on the record stating that I'll throw myself on my sword if the stock tanks after earnings. The reverse question is if the other "Apple Bears" will ever be heard from again if Apple reports a record breaking quarterly earnings report next week? I seriously doubt it.


    For Apple, any good news isn't good enough (in fact it's taken as bad news) and any bad news - no matter what the questionable source is - is taken as if it has been craved in stone by the hand of god. As I've said in the past, this stock is being manipulated and anyone who doesn't believe that should have their head examined.
    14 Jan 2013, 12:07 AM Reply Like
  • how many times have we heard this crap where analysts attempt to analyze the quarterly component orders to only get it wrong? Maybe they are right this time, but usually they are wrong.
    14 Jan 2013, 01:58 AM Reply Like
  • Paul Zimbardo has a possible explanation & not so negative on these figures:
    14 Jan 2013, 12:15 PM Reply Like
  • YEAH,Andy Zaky is hiding under some big rock or in the Bahamas collecting his 2000 a month subscription from Apple lovers who listen to him .What Im happy about is that he put it in writing in Oct that it was going to 1000,so we dont have to listen to him saying he never said it. I am very sorry that people lost money listening to him .I posted about Qualcomm stock in 1999 that Walter Pieck analysis predicted the same price target on Qualcomm and it never got close to going there .A lesson to be learned is to never ever fall in love with a stock. It helped me this time around hopefully it will for others the next time.
    15 Jan 2013, 06:14 AM Reply Like
  • Short $CRUS on plummet (~60% of revs tied to $AAPL), buy $QCOM on dip (owns smartphone market).
    13 Jan 2013, 09:52 PM Reply Like
  • Ashraf,


    Agree. on QCOM comment.


    Segment still growing, regardless of AAPL share.
    14 Jan 2013, 02:40 AM Reply Like
  • This will finally reach 500 based on this
    13 Jan 2013, 09:53 PM Reply Like
  • Damn, Nasdaq crashes again tmrw. I am really sick of Apple forpulling my $TQQQ down
    13 Jan 2013, 09:54 PM Reply Like
  • That's what happens when everybody and their uncle piles into Apple. I wonder what the next "hot" QQQ stock will be?
    13 Jan 2013, 09:59 PM Reply Like
  • Right now the futures are actually up 0.20% and that's well after these news came out.
    13 Jan 2013, 10:02 PM Reply Like
  • I know Paulo. I saw his last week too. TQQQ was up when AAPL was down. I hope some other stocks grow as Apple drops so that Apple is no longer 18% of QQQ. I would have much preferred if we had an equal-weighted index.
    13 Jan 2013, 10:15 PM Reply Like
  • These numbers about what the channel checks have projected, just simple sampling techniques. But prices are going to be cut at these run levels.
    13 Jan 2013, 10:20 PM Reply Like
  • I don't like QQQ at all. The weights are absurd! SPY seems to be a better index IMHO.
    13 Jan 2013, 10:39 PM Reply Like
  • Did you not see that it was a 50% cut from 65 million?
    13 Jan 2013, 11:15 PM Reply Like
  • Everyone and their uncle were piling and being bullish on Apple in the high 600s and then the 700s when they were the darling, including you dummy. Now the MMs and useless amateur writers such as yourself and your uncles are bearish after the fact and 20% down, regurgitating rumor after rumor of negative Apple stories.


    For every 1 apple bull that's left there's the hedgies protecting their covered calls, after-the-fact Ashrafs, and the CNBC shills lapping up the negative rumors and chanting the Apple is dead fanboy song every day junk like this gets released.


    13 Jan 2013, 11:20 PM Reply Like
  • Cut the condescending BS and the name-calling . This is a clean board and we'll throw you off for good , if you keep it up.
    13 Jan 2013, 11:54 PM Reply Like
  • paulo


    Isn't that 0.20 % what I see on quote from after hours of 1/11 at 7:59 pm ?? I think it'll change tonight at 4am EST, unfortunately.
    14 Jan 2013, 01:18 AM Reply Like
  • He's right. Don't need the name calling. But he is absolutely correct.
    14 Jan 2013, 02:30 AM Reply Like
  • > wonder what the next "hot" QQQ stock will be?


    Check with cab driver next time... They might have a early clue.
    On the other hand, if all cab drivers talked about AAPL, that is the time to get out...
    14 Jan 2013, 02:35 AM Reply Like
  • NV_GARY, I was seeing it in my interactivebrokers trading station. But it sure changed a lot since then, now it's down 0.6% or so. Weird how it hanged in there for 1-2 hours after the article was released, only to implode later. Man, I should have shorted it (but was already off by that time, only checking on prices and didn't have the code key with me to enter orders).
    14 Jan 2013, 08:09 AM Reply Like
  • Paulo,
    I wasn't aware trading went on after 8p Friday (article seemed to hit Sun evening)-- or do you just put in an order for Mon morning?
    14 Jan 2013, 12:12 PM Reply Like
  • Do you really think iPhone sales have been drastically reduced 50%?


    There's obviously something going on: either this is a fake, or Apple is switching suppliers/parts.


    There are many reasons Apple doesn't buy out suppliers..... The reason most likely is that the iphone 5S coming in the second quarter using a different supply to warrant a 50% reduction in supply orders
    13 Jan 2013, 10:08 PM Reply Like
  • I would think this is material information and a 8k would have to be issued. Someone please explain why none has been issued ????
    14 Jan 2013, 12:06 AM Reply Like
  • No, my gut feel is that Apple will creep past 40 million sales for Q4 but the bulk of those will be 4S. Here in Europe, it's rare to see a 5. It maybe something to do with upgrade cycles, the economy, who knows???


    Just saying.
    14 Jan 2013, 02:17 AM Reply Like
  • What Rubbish Etoile, "Here is Europe, it's rare to see a 5". Packed with 5s in the UK.
    14 Jan 2013, 04:02 AM Reply Like
  • It's not credible that Apple had orders in for 65 million screens for Q2 unless you think that Apple planned to sell a LOT more than 65 million in Q1.
    14 Jan 2013, 06:06 AM Reply Like
  • I'm sorry, but who exactly is modeling significantly more than half of 65M iphone 5's for Q1 anyway?
    13 Jan 2013, 10:11 PM Reply Like
  • Ah, same great reporting that suggested iPhone 5 sales in China were piss poor. That is until Apple revealed sales were record breaking.
    13 Jan 2013, 10:12 PM Reply Like
  • Facts don't matter. Blue horseshoe likes Anacott Steel!
    13 Jan 2013, 10:19 PM Reply Like
  • No it's Japanese crap blowing things out of proportion .....
    13 Jan 2013, 10:14 PM Reply Like
  • Last year there were also rumors prior to earnings report. Turned out to be BS. I think jdhawk is right - IPhone 5S coming and supply chain shifts. South America will supply more parts I think.
    13 Jan 2013, 10:20 PM Reply Like
  • The story is essentially a regurgitation of what has already been said. If the opportunity presents itself, it would be a good time for some put selling on the weeklies. I'm definitely game for that!
    13 Jan 2013, 10:21 PM Reply Like
  • Wow, "people familiar with the situation" are talking about component cuts again? They did the same thing last year at this time and again this past December. Go figure. Ten days and counting until we all get to be "people familiar with the situation".


    I guess Foxconn was pretty silly for telling its workers they will have to work through their New Year holiday assembling iPhones... I wonder what they will be doing instead.
    13 Jan 2013, 10:21 PM Reply Like
  • On the 10th of January FoxCon reported a record breaking December 2012 with revenue of 12.4 billion @ 14% growth for the month. Thay sited demand for consumer electronics and communications devices.
    No one reported these hard numbers. You can find the blurb at Digitimes.
    13 Jan 2013, 11:56 PM Reply Like
  • How long between ordering components and phone ready for sale? We all know the 5s is on its way. Isn't it normal to cut the components of the 5 at this point if the story is true?
    13 Jan 2013, 10:26 PM Reply Like
  • ...and you think the 5S will have a different screen. Wouldn't that make it a 6?
    14 Jan 2013, 02:20 AM Reply Like
  • A different screen size would probably get called a 6. Simply a different screen, but the same size, is going to get called a 5S.
    14 Jan 2013, 07:27 AM Reply Like
  • 65 million per quarter is 260 million iPhone 5's a year. Add in iPhone 4& 4s's and you're up to well over 300 million iPhones a year. Now, who believes that's even remotely possible?


    I think they ordered enough parts for 65 million iPhone 5's last quarter and probably sold 45 million, which combined with 4’s and 4s's is a nice 55-60 million total. Now they have parts for 20 million and reduced the 65 million this quarter to 32 million. Still enough parts to make another 45 million 5's with parts left over.
    13 Jan 2013, 10:28 PM Reply Like
  • apple-investor - thanks for introducing some common sense into this story. Add to that fact that the 4 and 4S have been selling better then expected, and you see that 35 million iP5 for next Q would be a great showing (with 10 million other iPhones, that would be 45 million for Q2) - and would put them near or above 90 million for the first 2 quarters of the year. Not many analysts are forecasting 200 million iPhones for the year....


    Also, can anyone show me a single analyst predicting 65 million iPhone 5s for next Q?? AAPL (who we know always is very conservative) clearly ensured that their suppliers could produce so they could sell everything possible...
    14 Jan 2013, 01:37 AM Reply Like
  • Nice to see somebody has done the math.
    14 Jan 2013, 02:07 AM Reply Like
  • Apple is a premium brand with customers who are willing and anxious to pay premium prices for what they make.


    Do they want to be the next Motorola?


    I doubt it very seriously.
    13 Jan 2013, 10:32 PM Reply Like
  • iphone5 = too little too late too boring too expensive


    OF COURSE they need a bigger phone but they're too
    busy with idiotic lawsuits over bogus patents to deal with it.
    13 Jan 2013, 10:33 PM Reply Like
  • yok:


    Bingo! We have a winner!
    13 Jan 2013, 11:14 PM Reply Like
  • too little, too late? Really? We'll just have to see how many were sold relative to Samsung's 15 million units for the quarter. My bet is that AAPL sold 3 times more iphone 5's
    14 Jan 2013, 12:02 AM Reply Like
  • JB:


    Better check that data again:



    In 2011 alone, Samsung sold over 300MM phones worldwide:

    14 Jan 2013, 12:17 AM Reply Like
  • @Jack Baker - show me your betting slip. Right now I could do with a laugh.
    14 Jan 2013, 02:22 AM Reply Like
  • "OF COURSE they need a bigger phone but they're too
    busy with idiotic lawsuits over bogus patents to deal with it."


    You're right, if all the lawyers are tied up in court they will never have the time to design the new phone. Why does Apple have lawyers designing their phones in the first place? Now you have me worried. They should hire design people to work on their product line and leave the lawyers to lawyering. Maybe I will email them and suggest this.


    14 Jan 2013, 03:54 AM Reply Like
  • DM:


    Lawyers and lawsuits occupy top management time and attention. It shows.
    14 Jan 2013, 07:31 AM Reply Like
  • Since the CEOs of Samsung and Apple refused to talk to each other after Judge Koh pleaded with them to settle, I don't think it's a lot of time.
    15 Jan 2013, 08:27 AM Reply Like
  • Another unnamed source "Weege Board" prediction. Not worth the space it takes up on the board. When you have actual facts let us know.
    13 Jan 2013, 10:34 PM Reply Like
  • Probably another instance of component orders being cut because Apple is switching to new vendors and phasing out the old ones.
    13 Jan 2013, 10:43 PM Reply Like
  • This is interesting. Wouldn't it be safe to assume that Apple ordered at least 65 million in the Oct - Dec quarter if they set an order in place for 65 million for the next quarter. The consensus is for 45 million iPhones to be sold. If they sold 45 million they would have at least 20 million excess displays. According to this report, they are ordering roughly 32.5 million displays for the next quarter. 32.5 plus 20 = 52.5 million. Furthermore, this is only iP5 displays, and wouldn't be counting other iPhones. If you ask me, something's not adding up.
    13 Jan 2013, 10:46 PM Reply Like
  • As others have pointed out, the numbers do not add up. Looks like the standard speculative rumors relating to Apple reducing orders after its largest quarter.
    13 Jan 2013, 10:47 PM Reply Like
  • When do people learn?
    AAPL and iPhone are good but AAPL to $1000 is another pump and dump by Wall Street crooks.
    13 Jan 2013, 11:16 PM Reply Like
  • " AAPL to $1000 is another pump and dump by Wall Street crooks."


    Caveat Emptor
    13 Jan 2013, 11:35 PM Reply Like
  • 5s may have a different display......who really knows where Ives is taking them... this is the opposite of quiet before the storm!
    13 Jan 2013, 11:32 PM Reply Like
  • Bring the stock down! I have been waiting to buy more under 500. Apple will most likely raise their dividend most likely double it and still have a comfortable payout ratio. This should send the stock back towards 700. Hoping everyone is selling tommorrow.
    13 Jan 2013, 11:40 PM Reply Like
  • i shorted appl put twice two weeks in a row and i am out on 1/4.
    i am not touching aapl until after the earning report and wait and see what they project.
    I now believe the report is true and i am not 100% sure the reason why they cut their order by 50%.
    Since I have knowledge on how hi tech business works and you do not just cut your order to your suppliers by 50% without reason and also usually there are financial penalties. Just think what if you are the supplier and your order is cut in such a short notice by 50%. There cannot be any good results from this.
    14 Jan 2013, 12:01 AM Reply Like
  • WSJ just changed the title and removed "On Weak Demand". Someone received a late night call/spank :p
    14 Jan 2013, 12:05 AM Reply Like
  • There will not be a NEW low end AAPL phone. This is the third and hopefully the last posting I see on this. Earnings report is just around the corner so all the speculation will end? Probably not, but AAPL is a solid company and will continue to produce leading edge products long afterwards.
    14 Jan 2013, 12:18 AM Reply Like
  • it means iphone 5s or 6.. will not be using the same display.
    14 Jan 2013, 12:28 AM Reply Like
  • @ huff...... thats my take also....I don't believe the weak demand rumor......
    14 Jan 2013, 12:42 AM Reply Like
  • I'll believe in what ever the price tells me and the price trend - neither look very promising for longs here.
    14 Jan 2013, 12:54 AM Reply Like
  • Yawn........More AAPL bashing desperately trying to keep the price.


    Now even regurtitating old Oct news headlines. For the first Oct-Dec of iP5 sales AAPL ordered 65m units, way ahead of all estimates of sales so they could meet demand (positive for a solid earnings beat which expect 47m units), reducing that to 35m units for the lower sales volume of the Q1 2013 period. If Apple have a good Q4 and 50m units are sold, that leaves them with 15m surplus to add onto the new production volume giving them stock of 50m for the lower volumed Q1 2013. This is normal product management. In fact Apple have a good 10m units spare which is sensible and will stop all the "Apple Can Not Fulfil Orders Rumour Mill"


    Long investors please remember it is in the interest of many hedge funds to keep the price low for another week. There is clearly no sensible reason for the share price to trade on such low multiples. It is the same reason why FB is at at PE of 260, and Amazon at 70. AAPL will sky rocket during the next two weeks. Apples earning estimates are so low and with all the advance facts on iPhone sales (7m alone in it's opening weekends in the US & China), stores being out of stock when 65m were made, plus new mac products, plus record App Store sales, plus initial iPad mini order bring increased from 8m to 12m units and being out of stock everywhere, plus new 4th gen iPad opening sales of 3m). It is clear there will be a huge earnings beat.


    In addition there is a whole raft of positive stock catalysts that can be announced during the year - China Mobile that could increase apples phone sales by 40-50% in a year, new low prices iPhone that could increase phone sales by 200%, iTV that could add $50bn in the first year, plus do not forget Apples $130bn of cash, plus $1bn of new cash every week that can buy, innovate, and reward investors. Remember also the tablet market and smartphone market is set to more than double in the next 4 years.


    The Apple plan has taxied onto the runway, and the engines are thrusting up. Use this period (the next week) to buy AAPL in the $520 - $530 range, before the stock takes off.
    14 Jan 2013, 01:37 AM Reply Like
  • eerie how the timing of this FUD compared to iPhone 4S before last year's Q12012

    14 Jan 2013, 01:49 AM Reply Like
  • All of this is nonsense! January 23rd is all that matters. But the debate is fun. Personally sounds strong to me. 65 million i5 screens made in the oct-dec quarter. Damn! Even if they cut that in half that's 97 million i5 screens for 2 quarters. Even the 4 was sold out after Thanksgiving weekend at lots of places. I bet the other smartphone makers wish they had these problems
    14 Jan 2013, 02:05 AM Reply Like
  • How will we all feel if Apple vertically integrates some of their component production?
    14 Jan 2013, 02:12 AM Reply Like
  • Apple will need to play catch-up to the Samsung Galaxy II... I think that's the model with the much bigger screen. Very nice. Fooled around with one today and found it easier to use... at least for this old guy... than my iPhone 5.
    14 Jan 2013, 02:15 AM Reply Like
  • Who says than cuts are due "weaker than expected demand". Sources are not cited.. What sources? are they accurate? Why not are they cited? Can we trust that just because WSJ published this info is accurate? Just remember last week report about cheap iphone..
    If those cuts are true, have all of you have thought that can be due because simply seasonality between Q1 and and Q2? That Production Plants were at max cap during last Q1 to catch strong iphone 5 demand and now they just adjusting production levels to their best view about traditional lower demand in Q2?
    I read that article in full few hours ago and 50% was NOT mentioned at all. Cited % cuts were in the order of 20-30%.
    I hope the moderator publish my comment this time!
    14 Jan 2013, 02:33 AM Reply Like
  • Rumors and half truths.
    14 Jan 2013, 02:34 AM Reply Like
  • I think its always best to disregard any rumours from both the bulls and bears just before an earnings release. There is always a lot of noise from both sides. Just going to wait until the earnings call for the truth.
    14 Jan 2013, 04:15 AM Reply Like
  • This could be a power play by Apple to wield their industrial clout; sign weak foreign suppliers up to contracts with excessively large volumes to get big discounts on components, then mid-way scale the orders back and bank the profits. These small-fry suppliers are powerless in this situation. And having Apple investing in the suppliers seals the deal. Clever.
    14 Jan 2013, 04:32 AM Reply Like
  • also, this drop now looks like -3.4% pre-market seems like a very attractive buy point for some more shares as this is a terrible rumour article with no sources.
    14 Jan 2013, 05:38 AM Reply Like
  • They need a 5 inch smartphone. Most people I know use their devices for surfing the net or reading ebooks. Phone calls are very low in their priority list!
    14 Jan 2013, 05:53 AM Reply Like
  • phone calls are very low in the priority list.... concerningly the trend is that kids and young adults do text and browse on cheap big phablets subsidized by large $ monthly family provider plans.....obviously a 7 inch phone is too large to hold up to your head and a 5 inch is too large for your pocket...but a 4 inch is too small to stream video and surf but perfect for phone calls.... so apple where do we go from here????....
    14 Jan 2013, 11:40 AM Reply Like
  • Well Samsung seems to have no issues selling their Galaxy S3 with a 4.8 inch screen.
    15 Jan 2013, 05:16 PM Reply Like
  • I'm not saying that Samsung had any problems selling the S3.


    AT&T sold 10 million phones in the most recent quarter. 8.2 million of them were iPhones.


    How many were the Galaxy S3?
    16 Jan 2013, 07:54 AM Reply Like
  • the other question should many were windows phones? lol
    16 Jan 2013, 12:54 PM Reply Like
  • If Microsoft hired Jeff Bezos to answer that question, his answer would be: "There were a record number of Windows 8 smartphones sold."


    And MSFT would rise 5%!
    16 Jan 2013, 09:52 PM Reply Like
  • I am amazed that Apple allows their stock to be so easily manipulated. I'm starting to understand why investors feel the company seems unconcerned about shareholders. To allow a comment like this to drop the stock 4% is irresponsible, in my opinion.


    Will be yet another buy point for me though. If I get any longer AAPL I'll have to buy a bigger portfolio.
    14 Jan 2013, 06:21 AM Reply Like
  • apple is bound to constantly have many more people commenting on different things such as supply and demand. It up to whether we listen to them or not. It would be much better if the majority of people just looked at the real facts such as earnings, P/E ratio ect rather than silly little comments here and there from unknown sources. No wonder there aren't a large amount of people in the world with stocks as how can anyone have any trust in the stock market when it is so easily manipulated.
    14 Jan 2013, 07:05 AM Reply Like
  • Rehashing old news to keep the stock down for options expiration eh.
    14 Jan 2013, 07:22 AM Reply Like
  • 90 day EMA. Since 04 AAPL under this EMA 1 TIME ~ 28 weeks- sept 08 - Apr 09. That was a crisis. AAPL screaming buy @ 500 USD.
    14 Jan 2013, 08:29 AM Reply Like
  • Projections built on hope and fantasy are going to hit a wall as always.
    14 Jan 2013, 08:48 AM Reply Like
  • Buy All you can with Apple at $500 or 4 x cash!!!


    For the first Oct-Dec of iP5 sales AAPL ordered 65m units, way ahead of all estimates of sales so they could meet demand (positive for a solid earnings beat which expect 47m units), reducing that to 35m units for the lower sales volume of the Q1 2013 period. If Apple have a good Q4 and 50m units are sold, that leaves them with 15m surplus to add onto the new production volume giving them stock of 50m for the lower volumed Q1 2013. This is normal product management. In fact Apple have a good 10m units spare which is sensible and will stop all the "Apple Can Not Fulfil Orders Rumour Mill"


    This is a case of the 'tail wagging the fog'. Remember iPhone 4 and 4s sales are still strong also. I see nothing to suggest the figures are other than bullish for Apple.
    14 Jan 2013, 09:04 AM Reply Like
  • "people familiar with the situation said"....anonymous sources? How accurate have they been before? ...just wondering.
    14 Jan 2013, 09:19 AM Reply Like
  • I am glad I was prepared for all this negativity. Can't say I wasn't warned.....but Cramer's daughter now giving her take on Apple... I guess I will be selling all my stock on that one.
    14 Jan 2013, 10:09 AM Reply Like
  • @ Brasil, Yep me too. LOL
    14 Jan 2013, 10:28 AM Reply Like
  • Frankly, that was completely embarrassing to watch this morning. I'm not the biggest Cramer fan (or a big basher either), but for CNBC to put a guy on TV that hands out quotes from his daughter about Cramer getting stock advice is a complete and utter joke.


    Come on CNBC... "Rise Above".
    14 Jan 2013, 11:50 AM Reply Like
  • Cutting display orders is more likely an indication that the iPhone is being redesigned with larger display to satisfy the international market. Think China. Think World Phone. Think CLWR spectrum.
    14 Jan 2013, 12:30 PM Reply Like
  • This dip is all about LEAPs expiration on Jan 18th. This entire 25% decline has been about that too. Apple is doing phenomenally as a business. And it's stock is about to return to reality. This week is probably your last chance to load up for that slingshot ride.
    15 Jan 2013, 04:35 AM Reply Like
  • For Cramer it is a ratings deal... the more spectacular the better the ratings, he's pandering to the buy and dump mentality... best advice this too shall pass. Quickly and before the earnings report is released. Then the real MF and MM guys will come in and buy.... Then Cramer will go after ratings again and tell a sob story about what a @ickhea@ he is for giving out that advice. But we know better, sorry Cramer.
    15 Jan 2013, 07:47 PM Reply Like
  • bet iphone 6 is totally different parts, heard rumor apple going after less expensive phone market kind of like nokia and the asha model vs their lumina model. change in parts orders can mean a lot of different things
    16 Jan 2013, 11:25 AM Reply Like
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