Earlier this week, iSuppli issued a report that described Apple’s NAND flash orders as being “slashed.” Here’s an excerpt:
In an early warning sign of consumer weakness, Apple Inc. has slashed its 2008 NAND order forecast significantly and has informed suppliers that its demand growth will slow in 2008 compared to 2007, according to iSuppli sources. … Before word of Apple’s warning, iSuppli had predicted the company’s NAND flash purchases would rise by 32.2 percent this year, helping drive significant market growth.
Philip Elmer-DeWitt blogs for Fortune, “Sounds pretty ominous, and the paragraph may have played a role in shaving a couple points off Apple’s share price on Thursday.”
“But several commentators have taken issue with the use of the word ‘slash’ to describe Apple’s order forecast. As Tom Krazit at CNET points out, Apple’s demand for flash is still growing rapidly, despite the broader slowdown in consumer spending. In fact, by his calculation, Apple is still planning to purchase 27 percent more flash memory this year than last year — just not the 32 percent iSuppli had expected,” Elmer-DeWitt reports.
“Moreover, what’s bad for memory makers may actually be good for Apple. Chip prices were already plummeting (4GB flash memory fell more than 73 percent since last August, according to IDG), and a memory glut could drive them even lower,” Elmer-DeWitt reports. “As Richard Hyde writes in Seeking Alpha:”
Here is where the story gets interesting for Apple. Not only do they reap the benefit of huge decreased pricing, the difference between the 8GB and 16GB modules is only $11, even though the iPhone models differ by $100. Similar savings are seen in the 16GB and 32GB iPod touch.
Elmer-DeWitt reports, “No wonder Apple can afford to cut the price of the iPod shuffle from $79 to $49. If it wanted to drive up demand, it could probably afford to cut prices all across the iPod and iPhone product lines.”
Full article, with charts and links, here.
[Thanks to MacDailyNews Reader “Judge Bork” for the heads up.]
@ ChrisM
I don’t care about PC Hicks, however, the Wal-Mart hicks is what doesn’t make sense.(unless of course 95% of the population of the US&A;are hicks, which would explain why Wal-Mart is the most successful retail store in the world) My HP company laptop was not by my choice, though my shopping for grocies at Wal-Mart is. Even when things are on sale at Harris Teeter or a Lowes Foods they can’t beat the normal price at Wal-Mart. I just don’t reccomend buying meats and fish at Wal-Mart, they just aren’t as good as other places.
I was really just trying to see how far we could get off topic here…but I do shop at Wal-Mart.
iSuppli is getting far too much publicity for this.
Apple is not slowing down. Apple is spending fewer dollars, because the price of a commodity has plunged.
Apple can drop the price of the iPhone and iPod Touch at will, and not suffer. It will spur demand, especially overseas.
iSuppli is well known for promoting their analysis and forecasts. Anyone who has used them and understands the industry knows that a lot of their information is unreliable and just plain wrong,
Apple had already cut back on their NAND orders in December, which they normally do at the end of the holiday season since they don’t need that much NAND for the slow first quarter of the year.
One more comment on the iSuppli figure of $13.9 billion in NAND flash revenues in 2007. This is understated because it does not include SanDisk’s flash memory output from its JV with Toshiba. This is a significant volume and just shows how unreliable their data is.
once the bear market ends. AAPL will be in position to capitalize on their growing marketshare in each of their target markets. The underlying business will not necessarily be reflected accurately in the price of the stock. stock prices are often valued in future earnings.
when/if AAPL dips below 100/share. you can thank the bear market for making it cheaper for you to buy. for option contract buyers, youʻre probably making $ on both ends, while the market goes sideways for the year. so i know you guys could care less
Face it isuppli you are just trying to cover you lazy butt, instead of finding new customers for your product you take the easy way out and blame apple-typical. plus, its obvious you have taken a page from the democrats, who call a gov. spending increase a “cut” when they don’t get their own way.
Get a real job and get out there and find companies to buy your product and stop blaming apple for your problems
“Face it isuppli you are just trying to cover you lazy butt, instead of finding new customers for your product you take the easy way out and blame apple-typical.”
isuppli’s product is research you stupid f-wit. The don’t sell the flash.