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Apple Cutting Fourth Quarter iPhone Component Orders?


Digitimes shares a report from Taiwan's Commercial Times claiming that Apple has cut orders for iPhone components during the fourth quarter by 10-15%. The report claims that sales of the device have slowed significantly since the pre-order and launch phase and that shortages of a few components have also been impacting overall production. iPad production may also be seeing some cutbacks.
According to a Chinese-language Commercial Times report, Apple is likely to adjust downward its shipments of iPhones and iPads from related suppliers by 10-15% in the fourth quarter.

Related iPhone 4S suppliers including cases and camera lens makers as well as ODM assemblers have received notice from Apple to reduce their shipments for the fourth quarter, but none of them has confirmed the report, the paper said.

Some international IC players have also indicated that their revenues are likely to slide by 10-15% in the fourth quarter due to the shipment adjustments for iPhone 4S.
Sales of the iPhone 4S hit four million units on its opening weekend last month, significantly higher than the iPhone 4's debut of 1.7 million units last year.

Apple has moved quickly to expand iPhone 4S availability internationally, and the company has continued to experience tight supplies of the device at its own retail stores. But if the reports out of Taiwan are to be believed, at least a portion of that crunch may be due to lighter-than-anticipated production in the face of component shortages and a targeted cutback by Apple.

Update: RBC Capital Markets analyst Mike Abramsky notes in a new research report that the suggestion of weaker-than-expected sales does not mesh with evidence of sell-through from carriers and other points-of-sale. He suggests that Apple may simply be pulling back slightly from an initial over-ordering of components, something the company has reportedly engaged in at times in order to gain the most favorable pricing possible.

Related roundup: iPhone 6

Top Rated Comments

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40 months ago
Every time I see a report that starts with "Digitimes" I know it means nothing!
These people have consistently gotten things way wrong and have no credability! It's like they almost start bad rumors on PURPOSE!
FUHGEDDABOUIT!
Rating: 7 Votes
40 months ago
This is a ludicrous claim considering people are still experiencing difficulty in obtaining a phone and many regions still haven't had their launch yet.
Rating: 3 Votes
40 months ago

I knew that once the hype of the 4S release was over sales would slowly drop.. People want the iphone 5 and are willing to wait two or three quarters for it; ) I for myself have no interest in the 4/4S, too thick and bulky.



i'm waiting for the iphone 7 myself
Rating: 3 Votes
40 months ago
http://www.macobserver.com/tmo/article/analyst_iphone_order_cutback_Reports_are_wrong/

UBS: Rumors of iPhone order cutback are wrong

“Reports out of China claim Apple is cutting back on iPhone 4S parts orders because consumer demand is dropping off,” Jeff Gamet reports for The Mac Observer.

“‘Those reports are wrong, according to UBS analyst Maynard Um, and his checks show iPhone 4S demand is still going strong,’” Gamet reports. “We believe the Commercial Times report is without merit and believe iPhone 4S demand is not an issue,’ Mr. Um said. ‘Our recent checks indicate that iPhone 4S is still selling out and experiencing 1-2 week waits for online orders with demand also driven by accelerated carrier/country launches.’”

Gamet reports, “He added that parts suppliers ‘have very recently indicated strength into [the calendar fourth quarter], which would be counter to weakening demand.’”
Rating: 2 Votes
40 months ago

Is it at all possible to flesh out article research before you write something unsubstantiated and then right on cue we get a ``Update:'' as if this is breaking news?

It's so predictable.


These two articles do not contradict each other. Digitimes always gets their data from Taiwan suppliers. Their data gives you more accurate picture than the anecdotal "sell through" stats. It gives you "absolute" volume data whereas "sell through" only indicates supply/demand ratio. If the phones sell through it only means that Apple is managing inventory very carefully.
Rating: 1 Votes
40 months ago
People tend to focus too much on upgrades from existing iPhone users, but this is misguided. Yes, current owners comprise a large and loyal market segment, but real growth in the iPhone platform will have to come from converting users from the Blackberry and Android platforms. Also, with the rapid adoption of smartphones it's critical that a significant portion chose iPhone for their first "smart" device for the base to continue to grow.
Rating: 1 Votes
40 months ago

I knew that once the hype of the 4S release was over sales would slowly drop.. People want the iphone 5 and are willing to wait two or three quarters for it; ) I for myself have no interest in the 4/4S, too thick and bulky.


What part of they sold almost 3 times as many 4Ss than the release of the 4 are people missing?

That does not signify people are waiting for the iphone 5.
Rating: 1 Votes
40 months ago

http://www.macobserver.com/tmo/article/analyst_iphone_order_cutback_Reports_are_wrong/

UBS: Rumors of iPhone order cutback are wrong

“Reports out of China claim Apple is cutting back on iPhone 4S parts orders because consumer demand is dropping off,” Jeff Gamet reports for The Mac Observer.

“‘Those reports are wrong, according to UBS analyst Maynard Um, and his checks show iPhone 4S demand is still going strong,’” Gamet reports. “We believe the Commercial Times report is without merit and believe iPhone 4S demand is not an issue,’ Mr. Um said. ‘Our recent checks indicate that iPhone 4S is still selling out and experiencing 1-2 week waits for online orders with demand also driven by accelerated carrier/country launches.’”

Gamet reports, “He added that parts suppliers ‘have very recently indicated strength into [the calendar fourth quarter], which would be counter to weakening demand.’”


And here is a the latest news article from Digitimes:

Amazon increases Kindle Fire orders

Yenting Chen and Rebecca Kuo, Taipei; Joseph Tsai, DIGITIMES [Thursday 10 November 2011]

Amazon has recently increased its Kindle Fire orders to more than five million units before the end of 2011 as pre-orders for the machine remain strong, according to sources from upstream component suppliers.

Amazon already raised its order volume once in the middle of the third quarter, up from 3.5 million units originally to four million units.

Since the company estimates that demand for Kindle Fire will become even stronger at the end of 2011, Amazon has further increased its orders. Amazon's upstream partners including Wintek, Chunghwa Picture Tubes (CPT), LG Display, Ilitek, Quanta Computer, Aces Connectors and Wah Hong Industrial will all benefit from the short-term orders.
Rating: 1 Votes
40 months ago
I find a thread like this the most entertaining of all. Every Apple apologist, fanboy, and excuse maker weighs in with the best responses of all. :) :) :)



I really enjoy my Apple products, but this one is just a phone :)
Rating: 1 Votes
40 months ago

One thing I've wondered about with regard to the 4s sales numbers is the fact that all of the people who bought their iPhone 4 units within the first few weeks of launch are still not eligible for a subsidized upgrade to the 4s. That's probably 3-8 million AT&T subscribers we're talking about.

I got my iPhone 4 on launch day and I'm not eligible for a subsidized upgrade to the 4s until November 25th. I'm wondering how many of my fellow first day/week purchase of the iPhone 4 are in the same boat and will be mobbing retail channels when we're finally able to upgrade.



Not true, if buy at AT&T. It will bump eligibility 30 days if you ask.

----------

I knew that once the hype of the 4S release was over sales would slowly drop.. People want the iphone 5 and are willing to wait two or three quarters for it; ) I for myself have no interest in the 4/4S, too thick and bulky.



Just another iPhone competitor employee on a soda break. Nice try. Here's your first post here:

"InYou101
macrumors newbie
*
Join Date: Oct 2011
Sooo Disappointed!!!
Seriously... an iphone 4s!? All this wait for the same for the same stuff with a better chip and camera!? The fake iphone from China looks way better then this. Sad to say apple is no longer about innovation and pushing the envelope with technology and DESIGN. They could have atleast made it thinner or something... I might just keep my 3GS till something better comes along."
Rating: 1 Votes

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