Apple Slashes iPhone Parts Orders
This is worrisome:
Apple’s orders for iPhone 5 screens for the January-March quarter, for example, have dropped to roughly half of what the company had previously planned to order, two of the people said.
The Cupertino, Calif., company has also cut orders for components other than screens, according to one of the people.
Apple notified the suppliers of the order cut last month, the people said.
I’m not worried about my Apple shares — I don’t own any. But I am worried about what this means for the broader economy. We always knew 2013 was going to be yet another Year of Meh, but a ride on the double dip is looking more likely.
UPDATE: Apple Insider claims the parts cut is a rumor, not a fact.
Does anyone know what’s going on here?
ANOTHER UPDATE: Confusion reigns.
Wouldn’t surprise me. With all the new taxes coming our way and an economy that is beyond meh and going to get worse. Apple is a luxury durable good. Especially the phones and tablets. I expect to hang on to my 4s at least 3 years and have seen no compelling reason to up grade from my iPad 2.
How are the other luxury utilitarian products doing?
It looks like the WSJ is saying “Apple ordered 56M screens in 4Q2012, and is cutting that order to 28M screens in 1Q2013″, in the scariest possible way.
Mind you, this isn’t surprising. People buy a boatload of devices for Christmas and post-Christmas gift card season, and then scale back until demand catches back up. (Bought my iPhone 5 on post-Christmas money….)
Apple sold ~35M iPhones (or so) in 1Q2012. Given the way iPhone 4s and iPhone 4Ss are still selling now (especially overseas and in China), internally projecting 28M screens needed for iPhone 5s is rather bullish, holding even AT LEAST.
Apple was overbought earlier, and now people are looking for any excuse to make it to the exits. $1000 per share was insane, but $500 per share is probably quite reasonable. Which of course means there’s more bloodshed to occur until the stock settles back down.
Also, the new iPod Touch uses the same screen as the iPhone 5. And sales of it are even more holiday-dependent than the iPhone’s.
What have previous 4Q to 1Q declines looked like?
Dunno. Even after the recent slide, AAPL has delivered about a 20% boost in share price over the last 12 months.
If you’re unhappy that you’re only up 20% in the current market, you are in dire need of a swift kick to the tender bits. 20% is a spectacular return.
The BGR article makes a lot of sense. Seems like a buying opportunity.