“Lower-than-expected demand for Apple Inc.’s new iPhones and the company’s decision to offer more models have created turmoil along its supply chain and made it harder to predict the number of components and handsets it needs, people familiar with the situation say,” Yoko Kubota, Takashi Mochizuki, and Tripp Mickle report for The Wall Street Journal. “In recent weeks, Apple slashed production orders for all three iPhone models that it unveiled in September, these people said, frustrating executives at Apple suppliers as well as workers who assemble the handsets and their components.”
“Forecasts have been especially problematic in the case of the iPhone XR. Around late October, Apple slashed its production plan by up to a third of the approximately 70 million units it had asked some suppliers to produce between September and February, people familiar with the matter said,” Kubota, Mochizuki, and Mickle report. “And in the past week, Apple told several suppliers that it cut its production plan again for the iPhone XR, some of the people said Monday, as Apple battles a maturing smartphone market and stiff competition from Chinese producers.”
Kubota, Mochizuki, and Mickle report, “During an interview earlier this year with The Wall Street Journal, Apple Chief Financial Officer Luca Maestri said that trying to determine demand for its devices based on reports by its suppliers can be misleading because the suppliers also make products for competitors.”
MacDailyNews Take: But, we three stooges here at The Wall Street Journal will ignore that advice and do it anyway.
“The iPhone production cuts have reignited frustration among suppliers and raised worries about Apple’s ability to forecast demand since it started releasing three flagship models instead of two last year, according to executives at Apple suppliers The suppliers’ ability to gauge demand will also be hurt by Apple’s recent decision to stop reporting unit sales, one supplier said.”
MacDailyNews Take: Several paragraphs down, the crux of the issue is finally revealed: The analysts’ hissy fit over being deprived of their precious unit sales crutch continues in the pages of The Wall Street Journal.
“For the current quarter, [Apple] projects revenue of $89 billion to $93 billion. Its growing services business has also offset the company’s contracting hardware margins, industry analysts say,” Kubota, Mochizuki, and Mickle report. “But while Apple has been enjoying record revenue and profit for the past year, the same can’t be said for many of its suppliers. That is because unlike Apple, they can’t benefit from services and software and they rely heavily on handset volumes, suppliers and analysts say.”
Read more in the full article here.
MacDailyNews Take: Apple will only bring in revenue of some $30 billion per month for the next three months. That’s a billion per day for 90 some odd days. What a financial horror!
The so-called “analysts” scream, “SELL, SELL, SELL!!!” (So they can buy low). Well, so can Apple as they execute their massive buyback program. And so can smart investors.
AAPL is like a buoy. Quick, it’s back on the surface! You there, analyst, and you, too, swim down and tug on the chain! Drag it under… lower, lower… Good! Now, quick, everybody jump on, and we’ll take a ride back up to the top again! — MacDailyNews, January 9, 2012
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At the most basic level, it’s extremely simple: Pump, then dump. Foment, then buy. Rinse, lather, repeat as the SEC sleeps. — MacDailyNews, April 26, 2012
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Even if a particular data point were factual it would be impossible to accurately interpret the data point as to what it meant for our overall business… There is just an inordinate[ly] long list of things that would make any single data point not a great proxy for what’s going on. Apple CEO Tim Cook, January 23, 2013
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If there actually is an issue with iPhone XR sales — and the jury is still way out on that one — that could be a good thing for Apple as it could mean that when spending over $750 on an iPhone, more people than ever say to themselves, “Well, I might as well get the very best one available,” and buy the iPhone Xs Max over iPhone XR. This would positively impact Apple’s iPhone ASP, of course. — MacDailyNews, November 9, 2018
SEE ALSO:
Misreading Apple’s supply chain and iPhone XR demand – November 15, 2018
iPhone XR production cuts not due to soft demand – analyst – November 10, 2018
Nikkei claims iPhone XR production cuts, Apple stock drops over 3% – November 5, 2018
Uh, yeah, about those iPhone X ‘concerns’ from analysts: Never mind – May 1, 2018
Apple beats Street with best Q2 ever – May 1, 2018
Apple’s iPhone X isn’t selling well – or is it? – April 21, 2018
Apple’s iPhone X to be discontinued this year, analyst claims – April 20, 2018
Morgan Stanley: Apple stock may fall on ‘materially’ weaker iPhone sales – April 20, 2018
Apple’s iPhone X made 5 times the profit of 600 Android OEMs combined – April 18, 2018
Apple’s iPhone captured 86% of global handset profits in Q417; iPhone X alone took 35% of global handset profits – April 17, 2018
Bernstein: Ams AG is biggest winner in Apple’s TrueDepth Camera system – April 10, 2018
Apple’s iPhone X is the UK’s most popular smartphone – April 9, 2018
Apple’s iPhone X sales continue to disappoint, some analysts say – March 22, 2018
Ignore the iPhone X naysayers – March 10, 2018
Will the naysayers admit they were wrong about Apple’s iPhone X? – February 5, 2018
Do iPhone X sales spell trouble for Apple? – January 30, 2018
Apple supplier says report of iPhone X production cuts was overstated – January 30, 2018
Another January, another misleading iPhone supply cuts story from Nikkei – January 29, 2018
Apple stock drops after Nikkei report of iPhone X production cut – January 29, 2018
Reports of Apple cutting iPhone X orders make no sense – January 2, 2018
Apple stock tumbles on one poorly-sourced report of low iPhone X demand – December 26, 2017
Apple and suppliers shares drop on report of weak iPhone X demand – December 26, 2017
Nikkei: Apple to decrease iPhone production 10% in first quarter of 2017 – December 30, 2016
Nikkei proclaims ‘iPhone 7’ Dead On Arrival; bemoans Apple’s ‘lack of innovation’ – May 12, 2016
Japan’s Nikkei, The Wall Street Journal blow it, get iPhone demand story all wrong – January 16, 2013
Did Apple reduce 4-inch Retina display orders due to improving yields? – January 15, 2013
Analysts: iPhone 5 demand ‘robust;’ ignore the non-news noise – January 15, 2013
Apple iPhone suppliers decline on report orders cut by 50% – January 15, 2013
Apple swoon erases $17 billion from stock market – January 14, 2013
Apple iPhone 5 production cut signaling a new product release? – January 14, 2013
Apple drops to 11-month low on old reports of component cuts – January 14, 2013
The strange math of Apple’s alleged massive iPhone 5 component cuts – January 14, 2013
UBS analysts: Apple iPhone component order reduction ‘old news’ – January 14, 2013
Apple pulls down U.S. futures – January 14, 2013
Apple shares drop below $500 after reported cuts in iPhone 5 parts orders – January 14, 2013
The anchovy analyists are begging for SEC re-regulation.
Tripp Mickle has never been right about anything yet somehow has a job at the Wall Street Journal. Tripp Mickle should be required to accurately estimate the number of times he will be correct in what he writes in the coming 6 months, and his pay should be docked and he should be forced to pay back prior checks if he is wrong in his forecast. I guarantee he would not be accurate. Tripp Mickle is a 100% incompetent hack who should be indicted for incompetence and stock manipulation.
To be honest I’m surprised this hasn’t happened earlier. AAPL had a great run in the last few months. Profit taking after earnings release is very common for Apple. And then “the sky is falling” manipulation usually follows.
Seen this most years and my stock is up 15fold since 2007.
Disgraceful,,,
How do you look shareholders in the eye and be comfortable declining unit sales with Apples miserable market share with every product they produce,
Don’t tell me that Unit sales has peaked when market share is so low in every department, usually around 10 percent.
Start selling.
Just like Windows did, Android is on more than 80 percent of smartphones. More.
Open up markets, and sell.
Android CONVINCED every customer they have, that they were just as good or better, and a better value.
Apples “Better customer” attitude just cost it 100 billion dollars, and more.
As a shareholder, Sell or quit. Innovate or quit. I”m tired of waiting for great new PRO products that I can think of right now.
Honestly, what ecosphere? Where are the individual parts improving?
Itunes should have a YouTube-style component.. How does Apple who wants to be about content and services not have a place to watch music videos let alone any user created videos? Music and more? That you create ON A MAC? Or Iphone! or IPAD?
Isn’t it a concern that my kids, 8 thru 12 years old have NO reason to sign on to Itunes and would never, rather than go straight to YouTube?
If you have Siri which everyone knows sucks, why not improve it, and go into search, like Duck duck go at very least? Why cant we access SIRI via a website or in print? and more? Just copy Google, and see their stock price plummet. Get into paid ads, why not?
Be the trusted content site… the need seems to be all the rage in the news these days.
Why not just buy Adobe or some program companies that have state of the art apps.
Name an “killer app” that Apple has come up with in the last ten years that is a must-have..
Friggin sell or hit the bricks.
AAPL down again. 189.00 Great. When does Warren pull out? Guess he cant now.
Alternate reality much?
Buy! Buy! Buy!
“The suppliers’ ability to gauge demand will also be hurt by Apple’s recent decision to stop reporting unit sales”
That is utter hogwash. Suppliers have no need to gauge demand because Apple gauges demand themselves and orders components accordingly. Suppliers need to supply what Apple orders. If Apple orders ten million widgets, they expect that supplier to deliver ten million of them, it would make no sense to manufacture twenty million in the hope that Apple might be persuaded to buy more. Apple couldn’t use more of them unless every manufacturer of every part was also able to over-supply by a similar amount.
Only Apple has the data to meaningfully manage demand, everybody else is merely making guesses based on tiny fragments of information and even when more information was available, those guesses were wildly inaccurate. With significantly less data being released by Apple from now on, third party analysis will become even more unreliable.
Well with three US interest rate hikes in the last four months, personal debt and federal debt at record levels, it’s not surprising that Apple is adjusting its supply chain to cope with projected reduced spending on luxury items and phones in general.
But it’s the rest of industry who lack Apple’s vast coffers who are the ones that are in deep doodoo.
all of what you say is true – and mr.apple needs to heed the danger.
they have built their recent economic model on premium products at premium prices for premium customers. sounds nice but…
there is a reason so many people buy android/samsung phones and windows tablets or dell computers rather than apple products – which is because applee products are costly and getting costlier.
apple makes better stuff, no doubt, but fewer and fewer people can afford them, or at the very least have other competing expenses – like cars, mortgages, kids to feed, that preclude them from buying apple products.
compounding the fiscal demographics apple faces, they have already expressed their intent to go cash neutral – to do away with the fat cash cushion that steve jobs started for them.
when hard times hit – and they will – and you have no cash cushion, there will be trouble
There are more switcher from android to iOS then the opposite. Once your really bite the Apple, you rarely go back. Because going back is equal to a pletora of software and messy evening to import/classified/rearrange everything…
Apple knows that.
The digital life Apple offer is a solution no other provides…
If your are only a owner of an ipod… Then you are free, I guess
Now, the vaunted Wall Street Journal is a pure spewing sewer of lies that are paid for by hedge fund crooks to swindle those in the investment world who cling to the belief that the NYSE and NASDAQ and CME are honest markets. Ha! The Wall Street Journal is to journalism what Stormy Daniels is to the idea of female beauty and goodness.
Yup.. and not just wsj
And why is the good always brushed under the carpet.
There is a pattern here.
I see it as coordinated manipulation, and mass media and corrupt journalism is at the heart of it ( tentacles of the powerful )
Why be selective…
https://www.patentlyapple.com/patently-apple/2018/11/apples-iphone-xr-touch-module-suppliers-recorded-strong-sales-in-october-with-positive-projects-out-to-end-of-2018.html#more
Dialog Semi says not seeing hit to demand from Apple
And
apple knows that, all of us who use apple products know that and i suspect that a fair amount of people who own those other non apple products know that. or at least do now
but initial affordability counts a great deal for a great many people. those of us who buy and use apple products generally have more discretionary income to afford them – we represent the premium customers of mr. apples tri-partite formulation.
there are way more of those who can’t afford than those of us who can. and even i draw the line at a thousand dollar telephone.
it doesn’t matter to me who much more powerful a new iPhone is than the oft cited computer capability of what allowed appollo 11 to land on the moon.
a thousand dollar iPhone isn’t going to land in my pocket, so as you can see there is a limit to my premium customer status.
and if i am drawing a line for myself, how many others have had that line drawn for them by virtue of apples pricing strategies?
just saying it is short sighted to maximize shorter term profits over longer term growth of market opportunities. there are way, way, way less well to do folks than those who aren’t
Well Pipeline the consumer has spoken.
They said no to higher priced phones in your attempt to hide declining sales with higher revenues.
Now your reaping what you sowed with your one product strategy. People are not going to continually buy $1,000 + phones.
Apple lead another huge decline in the stock market. Congrats Apple.
Where are all those 1 trillion dollar company cheerleaders?
Apple was destined to fall with their strategy of raise prices to hide dropping sales.