Linked by Thom Holwerda on Tue 15th Jan 2013 09:12 UTC
Apple The New York Times also chimes in on the reduced orders, and they have numbers which seem more realistic. "Apple does appear to be cutting back on orders for its latest iPhone from its manufacturing partners, as Nikkei of Japan and The Wall Street Journal reported earlier. Paul Semenza, an analyst at NPD DisplaySearch, a research firm that follows the display market, said that for January, Apple had expected to order 19 million displays for the iPhone 5 but cut the order to 11 million to 14 million. Mr. Semenza said these numbers came from sources in the supply chain, the companies that make components for Apple products." Some suggest this is stock manipulation, and while that is an exciting story to be sure, would respected and well-informed newspapers like The Wall Street Journal and The New York Times participate in something like that? Somehow, I highly doubt it. A far more logical explanation, as NYT details, is that the iPhone simply isn't doing overly well outside of the US.
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RE: Who knows
by Thom_Holwerda on Tue 15th Jan 2013 10:26 UTC in reply to "Who knows"
Thom_Holwerda
Member since:
2005-06-29

Well, are you American? That could certainly explain a few things. Apple continues to do very well in the US, so it makes sense stocks are low there. However, I just now checked the Apple website in The Netherlands, Germany, and France - and *all models are in stock*. Even in the UK, traditionally a strong iPhone market in Europe, *all models are in stock*.

You can check this for yourself at Apple.nl, Apple.de, Apple.fr, and Apple.co.uk.

This seems to support the idea that while the US is still iPhone crazy, Europe appears to be shifting its attention elsewhere. This is supported by marketshare figures in at least The Netherlands, where Apple hovers between 10-15%, and Android eats up 75% - even after the introduction of the iPhone 5. Faltering iPhone sales in Europe could easily account for a reduction in parts orders.

EDIT: they're in stock in the US too. Has a new iPhone ever been in stock the world over this soon after launch?

Edited 2013-01-15 10:30 UTC

Reply Parent Score: 2

RE[2]: Who knows
by shotsman on Tue 15th Jan 2013 11:04 in reply to "RE: Who knows"
shotsman Member since:
2005-07-22

you might be correct Thom but my take on this is that people are just being a tad more careful with their Dollars, Euros, Pounds etc these days.
Most people I know who have a smartphone aren't looking to replace their existing model anytime soon.
I had to get a new phone in December as upgrading my HTC Sensation to Cyanogenmod bricked it totally. I now have a non smart Nokia (symbian) that cost me less that £75.00. That will do me for the forseeable future.

If my company got its act together and gave me the iPhone it has been promising for the past 6 months I wouldn't say no but at the moment, I don't really need a smart phone but there again, I'm a technical luddite/grumpy old man so who am I to judge.

Reply Parent Score: 3

RE[3]: Who knows
by zima on Fri 18th Jan 2013 20:04 in reply to "RE[2]: Who knows"
zima Member since:
2005-07-06

a non smart Nokia (symbian)

What is that? Pretty much all Symbian handsets were described as smartphones...

Reply Parent Score: 2

RE[2]: Who knows
by delta0.delta0 on Tue 15th Jan 2013 11:28 in reply to "RE: Who knows"
delta0.delta0 Member since:
2010-06-01

I think I know why, the phone has been sold here in the UK at a premium where the S3 can be bought on a £25 a month contract with the phone free the iPhone 5 is on the most expensive contracts with a heavy up front fee as well, which on all calculations end up costing at least twice the actual price of the iPhone off contract. In fact a few of my friends have bought the iphone 5 off of contract and then signed up to giffgaff a mobile network here which charges 12.50 a month and provides unlimited data.

To put simply the Mobile Network Operators are to be blamed here, they have gotten incredibly greedy and expecting the iPhone 5 to just sell have massively overpriced it on really terrible contracts. This applies here in the UK, I know a lot of people have not upgraded because of this very reason and are still running their old iPhones some are looking to move to Android.

The other reason is quite simply that the iPhone 5 is very boring, its a bit bigger than the iPhone 4 but it looks very similar, so why bother upgrading thats the other reason. I am sure interface wise and hardware wise the next iteration of the iPhone will be very different at least I hope for Apples sake it will be.

Reply Parent Score: 2

RE[3]: Who knows
by novad on Tue 15th Jan 2013 11:34 in reply to "RE[2]: Who knows"
novad Member since:
2010-06-10

I would even add one more point.

iPhone 5 = new connector.

For all those already owning an iPhone4 that means they have to buy (again) a lot of stuff.

Why would they do that knowing the iPhone5 is just a big iPhone4??

Reply Parent Score: 2

RE[3]: Who knows
by JAlexoid on Tue 15th Jan 2013 12:26 in reply to "RE[2]: Who knows"
JAlexoid Member since:
2009-05-19

To put simply the Mobile Network Operators are to be blamed here, they have gotten incredibly greedy and expecting the iPhone 5 to just sell have massively overpriced it on really terrible contracts. This applies here in the UK, I know a lot of people have not upgraded because of this very reason and are still running their old iPhones some are looking to move to Android.


No. To put it simply - in US the operators are free to charge you stupid fees on your devices and then charge you your usual $100 per device. In EU that practice "does not fly", so the operators are done supporting Apple with their cash and are letting the customer pay the full actual price.* Why? Because when you buy an iPhone you are not likely to be proving additional revenues for the operator to cover for the subsidy(considering OTT, premium SMS messages and similar)

*- iPhone5 off contract is about €750 and it's subsidy constitutes €10-€15 in your monthly bill. That is a considerable hole between the price the operator pays to Apple and you pay back.(I suppose Apple only gets €500 when sold in bulk to operators)

Reply Parent Score: 5

RE[2]: Who knows
by d3vi1 on Tue 15th Jan 2013 13:25 in reply to "RE: Who knows"
d3vi1 Member since:
2006-01-28

Well, are you American? That could certainly explain a few things. Apple continues to do very well in the US, so it makes sense stocks are low there. However, I just now checked the Apple website in The Netherlands, Germany, and France - and *all models are in stock*. Even in the UK, traditionally a strong iPhone market in Europe, *all models are in stock*.


I can tell you first hand that except for the 16GB versions, the Romanian operators still are out of stock and have been like this since mid december. Milage varies from country to country. Yes, they made sure that the traditional launch countries have adequate stock, but the second batch of countries are still out of stock. I've checked with Vodafone, Orange and Cosmote (T-Mobile) as recently as today.
They expect the stocks to go to normal from from mid February.

Furthermore, 75% android doesn't mean much in reality. Do the math another way: Apple is a quarter, Nokia/Backberry are irrelevant and 75% represents everyone else. So in a battle of Apple vs. everyone else they aren't doing that bad. iPhone is in the premium segment where most droids don't actually compete (except for select terminals from Samsung). In the premium segment, Apple is clearly the market leader.

I don't think Apple is or should be going after the non-premium segments as it would kill their margins or make crappy products. There are already enough manufacturers that are more than competent in low-margin, high-volume, 6 month technical and OS support markets.

I've also observed that all my higher income friends (research, finance, etc.) in Germany, France, Romania, UK and the Netherlands use Macs and iPhones. I actually have only one friend doing his PhD right now that refuses to get an iPhone for philosophical reasons. Obviously, milage may vary, but this is my experience, neither good nor bad, just an experience.

Reply Parent Score: 3

RE[2]: Who knows
by Tony Swash on Tue 15th Jan 2013 15:36 in reply to "RE: Who knows"
Tony Swash Member since:
2009-08-22

Well, are you American? That could certainly explain a few things. Apple continues to do very well in the US, so it makes sense stocks are low there. However, I just now checked the Apple website in The Netherlands, Germany, and France - and *all models are in stock*. Even in the UK, traditionally a strong iPhone market in Europe, *all models are in stock*.

You can check this for yourself at Apple.nl, Apple.de, Apple.fr, and Apple.co.uk.

This seems to support the idea that while the US is still iPhone crazy, Europe appears to be shifting its attention elsewhere. This is supported by marketshare figures in at least The Netherlands, where Apple hovers between 10-15%, and Android eats up 75% - even after the introduction of the iPhone 5. Faltering iPhone sales in Europe could easily account for a reduction in parts orders.

EDIT: they're in stock in the US too. Has a new iPhone ever been in stock the world over this soon after launch?


All these rumours and all this speculation are fun (especially if you want to manipulate the stock price) but the consensus amongst serious analysts is for between 45 and 55 million iPhones sold in the holiday quarter which would be another big step up in sales for Apple. It looks like Apple will sell at least 250 million iOS devices in 2013 which will probably exceed Windows licenses sold in the same period. Shame Steve Jobs isn't alive to see that.

Here is some interesting data from Asymco on the ambitious scale of the iPhone 5 rollout.

http://www.asymco.com/2013/01/15/measuring-iphone-5-vs-iphone-4s-av...

Bottom line: The iPhone 5 was 30% more available than the iPhone 4S.

As far as the rumours about cancelled supply orders go here is what Asymco has to say:


First, note that the increase in availability (area between the orange and blue lines) occurred both early and late in the quarter. The early period was mostly due to early launch in the US and the later period was due to earlier launch into China. China buying patterns are different than those in the US due to differing festive seasons so the bulk of Chinese buying may not happen during the fourth quarter.

However, delivery of product to China started earlier and there was a burst of buying (two million units in three days.)

Production should follow the availability schedule so it would be sensible to reduce production once the pipeline is full. Note that supplier cuts rumors surfaced right around the increased availability date of mid-December. Last year the rumors surfaced in November.

Increased availability does not always lead to increased sales but the iPhone 5 was constrained for longer than the iPhone 4S so it’s possible that demand was therefore higher.

Increased distribution does not always mean increased production. However, Apple’s investment in production tooling doubled year/year so there is a possibility that production did increase.


Looking forward to the release of the actual data by Apple next week. I wish other companies such as Amazon, Samsung and Google were as open with the data about their mobile sales as Apple but I don't expect much to change on that front.

Reply Parent Score: 5

RE[3]: Who knows
by Thom_Holwerda on Tue 15th Jan 2013 16:30 in reply to "RE[2]: Who knows"
Thom_Holwerda Member since:
2005-06-29

Google releases detailed Android data regularly - much more so than Apple, in fact.

Reply Parent Score: 1

RE[2]: Who knows
by galvanash on Tue 15th Jan 2013 21:39 in reply to "RE: Who knows"
galvanash Member since:
2006-01-25

Purely anecdotal, but my wife had a 4S and upgraded to a 5...

Yeah, its faster, but it was already pretty fast. Yeah, the screen is taller, but she doesn't really care. Its thinner, but it was already pretty thin. She actually liked the old design better from a purely cosmetic point of view, and switching to lightning means all her accessories are now a pita.

All in all, she tells her friends not to bother. She is probably just above your average phone user - she doesn't give a shit about buzz or technology or having the latest gadget, but she does use the features of the phone heavily and has always appreciated the updates in past models.

I think that is probably the prevailing attitude toward the 5 once you get out of the technocrati circles. Its really the first iPhone model without a killer reason to upgrade. Its not that it is bad or anything, but it isn't "omg I have to have that" either.

In short I think word of mouth dampened the initial demand curve a bit.

ps. I forgot about LTE. In the US at least, if you are an AT&T customer it only matters if you actually have LTE in your area. The VAST majority of users don't, so it is of no value to them.

Edited 2013-01-15 21:45 UTC

Reply Parent Score: 4

RE[3]: Who knows
by zima on Tue 22nd Jan 2013 13:16 in reply to "RE[2]: Who knows"
zima Member since:
2005-07-06

It seems there usually are such "good enough" points with the progress of technology ...and what happened with Macs and PCs.

Reply Parent Score: 2

RE[2]: Who knows
by AdamC on Wed 16th Jan 2013 08:05 in reply to "RE: Who knows"
AdamC Member since:
2009-07-25

Wow you are very scientific with the research that the demand for the iPhone 5 is not there yet just by checking the Apple Stores in the net.

Have you consider going into the fortune telling business. It might suit you as better profession.

Just because you said so that NYT, WSJ are not into the manipulation business so they wouldn't and aren't. Remember one thing these people are also in the hits business of getting as much hits as they can and what better than the name of Apple to get the hits.

As per WSJ 63 million order can this be real for a weak 2nd quarter?

Go figure.

Reply Parent Score: 1

RE[3]: Who knows
by mkone on Wed 16th Jan 2013 21:14 in reply to "RE[2]: Who knows"
mkone Member since:
2006-03-14

Thank you. There is no way that Apple would even dream of selling 65m iPhone from January to March. Their best ever quarter, that includes a holiday season, saw them sell 37m phones. For them to best that, in an after holiday quarter and almost double it would be unheard of. And Apple are anything but stupid.

In fact, Apple gave guidance for Q1 2013 (their financial year, not the calendar year) and they estimated revenue at $52bn. 65m iPhones would represent a revenue of approximately $43bn. To put that in perspective, that would make the iPhone the largest company of earth.

If we were forecasting revenue of the iPad of about $10bn (same as Q1 2012), music $2bn, peripherals $1bn, iPod $2.0bn (a little less probably), desktops $2bn, portables $4.5bn.

So, adding all the numbers together, one would have to believe Apple believed they were on for record revenues on the order of $64.5bn+.

The 65m number is absolutely ridiculous. Heck, even Samsung isn't shipping that many smartphones in a quarter yet!

Reply Parent Score: 1