Supply Chain Indicators Point to Poor February for Apple

Citigroup's recent claim that Apple would miss its own Q1/Q2 revenue forecasts has been lent weight by Topeka Capital's Apple Monitor reporting that key Apple suppliers had a "terrible" February (via Business Insider).

The monitor, which tracks the results of Apple's key suppliers, is compiled by Topeka Capital's Brian White, an analyst normally bullish on Apple.
When [supplier] results are good, it usually means good things for Apple. When the results are bad, watch out.

White says the February results for his Apple Monitor were down 31 percent sequentially, which compares to the typical 8 percent decline. Even if you factor in the Chinese New Year, he still says it's bad.
The Chinese New Year tends to result in significantly reduced production, but White calculates that factoring that in still results on a fall in production of 15%, amounting to "the worst February we have on record." White goes on to observe that most of the preliminary Taiwan monitors show weak results, suggesting that the slowdown is affecting the whole industry, though Apple's supply chain figures appear worse than most.

Last month, research firm NPD revealed surprisingly strong Mac and iPod sales in the U.S. for the month of January, but with those product families accounting for smaller and smaller proportions of Apple's revenue, iPhone and iPad sales have become the primary drivers of Apple's performance.

Apple CEO Tim Cook has cautioned against reading too much into supply chain reports, noting that the company has multiple sources for many components and that yield rates may vary over time, but Topeka's Apple Monitor attempts to take some of those fluctuations into account by taking a broader view spanning a number of companies within Apple's supply chain.

Top Rated Comments

(View all)

88 months ago

Define "recent years" please.

"years" that happened "recently"
Rating: 31 Votes
88 months ago
goodbye apple, hello samsung. this is what happens when you sit on your ass and let competitors catch up to you.
Rating: 27 Votes
88 months ago
Wall Street has decided they're done with Apple and are now doing whatever they can to tear it all the way down to the ground. Good reason to just stop listening to them unless you own the stock, which I don't.
Rating: 23 Votes
88 months ago

The Guardian newspaper (UK) had a great article this weekend explaining why Apple are in decline. There stock is down 40% in 6 months and they are not doing anything new or innovative that has the wow factor in recent years. They are not disappearing anytime soon but they are losing brand loyalty as people do want quality but also something new. If you have stock I would be tempted to ditch it! Buy it again when its at its lowest as im sure Apple will bounce back in years to come.

What is all this new and innovative stuff others are doing? And it hasn't been even 2 years since Steve died. What exactly do these people think Apple should have done the last 1.5 years? I suppose they could have released a 5" phone to wow the tech press and Wall Street but not sure what exactly is innovative about a larger screen. One could argue Microsoft was "innovative" with Windows 8 but the customer response seems to be quite muted. So why would Apple add touch screen to the macs when it's not taking off in the PC market? Again, I'd love to know exactly what innovation the Guardian thinks Apple should be doing that its not right now. Or are they just parroting the broader theme in the media echo chamber these days.
Rating: 22 Votes
88 months ago
I still don't understand why anyone, outside of a shareholder, should care about this.

Does your iPhone, iPad, or Mac work well for you? Yes? Then carry on about your day.
Rating: 19 Votes
88 months ago

goodbye apple, hello samsung. this is what happens when you sit on your ass and let competitors catch up to you.

I know, right? Apple should get it together, I hear that the GSIII was "designed for humans" which is much more innovative than the previous version which was apparently designed for cats.

Rating: 18 Votes
88 months ago
For the past two or three years, Android has been moving rapidly and iOS has been standing still.

iOS had been sheltered by two things:
1 - They started way ahead of Android.
2 - Android devices tend to be updated more slowly (IE, Android devices tend to be running years old OS versions whereas iOS devices tend to be running OS versions within a few days of release.)

It was inevitable though, Android has blown right past iOS. Apple has the ability to move forward very quickly - if iOS 7 blows away Android 4, then Apple will be in the lead for awhile because all iOS devices will jump to iOS 7 instantly whereas even if Android 5 is much better, most devices wouldn't be running it for months, so iOS 7 need only beat Android 4 - if iOS 7 blows away Android 4, Apple can handily retake the lead and their stock will reverse course.

Doesn't Apple normally demonstrate the next OS X or iOS version to developers in Spring? We're half way through March and I still haven't seen any invitation...
Rating: 17 Votes
88 months ago
Forecasts are a joke. Keep calm and carry on.

Waiting for my black retina air with no bezel!
Rating: 17 Votes
88 months ago

If you have stock I would be tempted to ditch it! Buy it again when its at its lowest

wow, mind if i write this down?
Rating: 15 Votes
88 months ago
I'll do my part

If and when Apple offers-up a respectable, contemporary version of the Mac PRO, I'll make my contributions to their bottom line.
Rating: 15 Votes

[ Read All Comments ]