Forum > Manufacturer Discussion > Apple > IPhone Suppliers Decline on Report Orders Cut by 50%

On 2013-01-15 14:37:06, etaab wrote:
The scuffing is a real issue. I saw a work colleague's 5 yesterday and it was battered. It looked like a two year old phone. Mind you I think he keeps it in his pocket with his keys so what can you expect.

On 2013-01-15 08:37:56, tohapply wrote:
I CANNOT believe this is true. Sad

Earlier this week, The Wall Street Journal reported that Apple has cut its iPhone 5 component orders by as much as half following “weaker-than-expected” demand for device. The news sent Apple’s stock price plummeting, but according to some analysts, there’s nothing to worry about. iPhone 5 demand is doing just fine, according to Sterne Agee’s Shaw Wu, and the component cuts are in no way related to poor demand.
Rather than a result of weak demand, Wu insists Apple’s component cuts are simply due to ”much improved yields meaning lower component builds and supplier shifts.”
“As far as we can tell, iPhone 5 demand remains robust,” Wu added.
Baird analyst William Power said much the same thing in a note to investors today, CNET reports. In fact, Power announced he was ”actually raising our calendar fourth quarter iPhone forecast slightly,” adding that “most demand indicators remain favorable.”
So why has there been so much panic about this supposed weak iPhone 5 demand? Well, according to sources for WSJ, Apple has cut its iPhone 5 display orders by as much as half. Other component orders have been reduced as well. Many felt this was a sign that iPhone 5 demand had dropped following its impressive start, and that Apple wasn’t selling as many units as it had initially anticipated.
The report was damaging to Apple’s stock price, sending it sliding from down 3.6% to $501.75. At one point on Monday, it briefly fell below $500 for the first time since last February.
Now analysts are quickly trying to clear up the confusion and dismiss these reports as false. WSJ’s report had suggested that the component cuts could have been related to better yield rates, and it appears that’s more likely to be the case. Whether or not Apple’s share price will rise again following this news remains to be seen.

Smartphones are predicted to account for half of all handset shipments in 2014 and are estimated to increase to 69% over the next five years. Despite the expanding market, however, Apple (AAPL), like many others, will apparently be unable to keep pace with Samsung (005930). According to a report from ABI Research, Apple’s smartphone market share is expected to peak at 22% this year and remain flat through 2018.

“Barring an unlikely collapse in Samsung’s business, even Apple will be chasing Samsung’s technology, software, and device leadership in 2013 through the foreseeable future,” said senior analyst Michael Morgan.

On the back of Android, Samsung’s market share has increased from 8% in 2010 to 30% in 2012. The firm notes that Samsung is so massive that the future of the mobile OS landscape will be heavily influenced by the products it releases.

ABI Research expects growth in the industry to be driven by “the rapidly growing low-cost smartphone segment.” The firm estimates that by 2018, smartphones that are offered for less than $250 will account for 62% of all smartphone shipments.

Apple is rumored to be planning a cheaper iPhone that could help the company further compete with Samsung and capitalize on the low-end market. Until such a device is announced, however, Apple’s market share is expected to suffer.