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Rumor: Apple cutting iPhone production by 20 percent

updated 06:07 am EDT, Tue July 9, 2013

High-end smartphone makers adjusting to tough market?

An analyst from Wedge Partners has claimed that channel checks show that Apple may have alerted suppliers to expect parts order cuts of 20 percent for June to December. If accurate, it appears to be indicative of tougher than expected market conditions for high-end smartphones. Just yesterday, both Samsung and HTC shares took a pummeling based on company profit estimates for the quarter that are lower than analyst expectations.

"So, when they make a dramatic change in their forecast, they need to let their suppliers know," analyst Brian Blair told CNBC. "And this is coming from some of our supply-chain work out of China and Taiwan that has let us know, not exactly, but that there's been roughly this kind of a change in their forecast for the period from June to December, about a 20 percent cut in what they've been telling their suppliers to be ready for," Blair added.

According to Blair, Apple had placed components orders based on its estimated demand of around 115 to 120 million iPhones. Instead, Apple now reportedly expects demand for its current parts orders to be around 90 to 100 million units. Blair also suggested that Apple may have been monitoring weakening demand for Samsung's flagship Galaxy S4 and has adjusted its parts orders accordingly. "So the bottom line is, there's lots of little signs that are pointing to slowing growth for high-end smartphones, and I think Apple's reacting to that," Blair said.

Apple's shares are currently trading at $415.05, down $2.37 from yesterday. [via Phone Arena]

Tough market for high-end smartphones?





By Electronista Staff
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Comments

  1. svencito

    Fresh-Faced Recruit

    Joined: 12-12-99

    Oh, great! Another 'analyst' has heard that Apple 'may have' informed one of their suppliers that is has/will cut down it's orders for iPhone parts. Wedge Partners belongs in the same trash as its predecessors who claimed to know how iPhone sales actually performed during the past quarter.

    I guess that just means for me that I'll be able to pick up AAPL stocks cheaper based on random trash talk. :-)

  1. machobbes

    Fresh-Faced Recruit

    Joined: 02-13-09

    "So, when they make a dramatic change in their forecast, they need to let their suppliers know,"

    Oh, of course, when they change their forecast, they are legally obliged to
    send an email to all and every supplier detailing them how they expect things to develop ...

    But apparently there are still enough people believing this made up b..s..t even after so
    many iterations – see the stock dip this morning.

  1. pairof9s

    Mac Enthusiast

    Joined: 01-03-08

    This does highlight a rather interesting point...for all the focus of Samsung's "attack" ads on the merits of a Galaxy over an iPhone, the real need appears to be in convincing many out there in getting a smartphone in the first place.

  1. iphonerulez

    Fresh-Faced Recruit

    Joined: 11-28-08

    That MF is a g-damn liar. Why is it that companies can't sue these people for spreading malicious misinformation about things they know nothing about. A person would probably have to work in the Apple accounting department to know if there was a 20% production cut. Heck, he's not giving actual numbers. Apple's iPhone production numbers could have been way higher than necessary. I don't see how this information is going to help investors if it's just a guess. I don't even know why there's a need to spread this sort of unproven information.

  1. jscotta

    Fresh-Faced Recruit

    Joined: 06-30-02

    One other little detail that many miss (in the case of analysts, it tends to be on purpose) – Apple reduces orders of materials for old product when they are ramping up for new product. They start clearing the channel. They are the masters of supply chain management. That is a title that used to go to Dell, but no longer.

    However, headlines and stories that Apple is managing inventory doesn't result in as many clicks as "Apple is Dying...more at 11".

  1. Spheric Harlot

    Clinically Insane

    Joined: 11-07-99

    Originally Posted by pairof9sView Post

    This does highlight a rather interesting point...for all the focus of Samsung's "attack" ads on the merits of a Galaxy over an iPhone, the real need appears to be in convincing many out there in getting a smartphone in the first place.



    In getting a HIGH-END smartphone. Very, very few people are purposely sticking with dumb phones.

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