

Apple cuts orders for iPhone 5 parts on weak demand - dataminer
http://www.nbcnews.com/technology/technolog/apple-cuts-orders-iphone-5-parts-weak-demand-report-1B7956611

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cubicle67
There's a comment by matrix07 on AppleInsider I think may be worth a read:

 _Look at the number here[http://www.reuters.com/article/2013/01/14/us-apple-
iphone-de...](http://www.reuters.com/article/2013/01/14/us-apple-iphone-
demand-idUSBRE90D04B20130114)

Apple was expected to order 65 million screens?

Considering the best iPhone quarter is only 37 mil., and that's Christmas
quarter. WTH Apple to order this much in a quarter AFTER Christmas?_

 _Makes no sense._

[Edit: link to comment [http://forums.appleinsider.com/t/155446/wsj-apple-
cuts-iphon...](http://forums.appleinsider.com/t/155446/wsj-apple-cuts-
iphone-5-component-orders-in-half-due-to-weak-demand#post_2258338)]

~~~
defective
BGR also notes that the same screen is used for both the iPhone 5 and the iPod
Touch. It can't simply be assumed that the iPhone demand has lessened because
Apple orders less of one component used in multiple lines of products.

[http://bgr.com/2013/01/14/iphone-5-analysis-component-
cuts-2...](http://bgr.com/2013/01/14/iphone-5-analysis-component-cuts-291307/)

~~~
mikecane
Now that's interesting. Did iPad Mini kill iPod Touch sales? $299 and $399 vs
$329 iPad Mini. Hm.

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aneth4
I suspect this type of information is pushed to manipulate the market and
provide flip opportunities for hedge funds. Apple is down 5%. Imagine if you
knew on Friday this story was going to be published.

Given Apple's forward looking cash position, the stock is extremely
underpriced, even if sales were to decline significantly.

~~~
rednukleus
> Given Apple's forward looking cash position, the stock is extremely
> underpriced.

The market seems to believe that the level of sales and/or profits per sale
are unsustainable in the medium term.

Stocks the size of Apple are never "extremely" under/over priced.

~~~
aneth4
> Stocks the size of Apple are never "extremely" under/over priced.

Size has nothing to do with whether a stock is over or underpriced. Apple
could rather conservatively be valued at $600 or even $700 per share. I'd say
that's an extreme underpricing, particularly given the difference in market
cap that would make.

> The market seems to believe that the level of sales and/or profits per sale
> are unsustainable in the medium term.

There are other reasons for a stock to be depressed that may in fact have to
do with the size of Apple. For sure they are in a fickle market and there is
risk.

~~~
rednukleus
> Size has nothing to do with whether a stock is over or underpriced.

The reason why size does matter is that there are thousands of analysts
constantly monitoring the stock, and companies are constantly trading based on
their informed opinion of the value of the stock.

A small, relatively infrequently traded, stock is far more likely to get out
of line with fundamentals.

~~~
aneth4
You could also make an argument that a large stock like Apple gets out of line
with fundamentals because it represents such a large portion of pretty much
every institutional portfolio that could own the stock, so movements are often
due to portfolio rebalancing than fundamentals. This seems likely to be the
case with Apple right now.

~~~
rednukleus
Then you would be making an argument that flies in the face of every
investment textbook Ive ever read.

~~~
aneth4
Significant demand in a large cap stock mostly comes from large institutional
investors. Large institutional investors are finite, and those investors must
limit how much any stock represents in their portfolio. Regardless of what
your textbooks say, it is true situation.

~~~
rednukleus
It only takes a few hedge funds and a couple of Goldman Sachs to balance out
any of those effects. I'm sorry, but you clearly have no idea what you are
talking about.

~~~
aneth4
Because hedge funds will bid up a stock that no one else is allowed to buy? I
thought they like to make money.

Markets are often undervalued due to restrictions on buyers. The bull case for
the stock is that AAPL will make itself the buyer of last resort, as I expect
them to do this earnings announcement. Knowing that the stock is undervalued
and that any price increase due to their purchases will be maintained by the
market, they can confidently buy the stock back.

Dividends can have a similar effect to a buyback, and also expose the stock to
dividend focused funds.

Large cap companies often must resort to these tactics to increase the number
of available buyers when their stock is widely owned.

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ajays
Aside: I, for one, am extremely disappointed in the iPhone5. Its WiFi sucks
ass, to put it delicately. I just got back from traveling abroad, and when I'm
there, I rely heavily on WiFi. My 3GS had no issues; it use to work like a
champ. But the iPhone5? Lord! It couldn't hold the signal; it wouldn't log in
to the (WPA2) network even though it would see it; etc. etc.

Apple's response so far? Try disable WPA2 and remove all authentication.
Really?!?!

And the problem got worse after iOS 6.0.2

After seeing my issues, several friends of mine have decided to hold off
upgrading till they're sure the issues are worked out (in iOS 6.1.0?). At
least 1 person I know picked the Samsung instead.

Sorry to threadjack.

~~~
bertomartin
That's the first time I'm hearing anyone complain about wifi issues. Everyone
I know that have an iPhone5 have had no such complaints.

~~~
ajays
checkout this thread on the Apple discussion forums:
<https://discussions.apple.com/thread/4322714> (it's already at 219 pages and
counting).

There are many such threads in that forum.

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simonh
These reports based on reduced orders to suppliers are pretty routine, either
in the post-holiday period or a few months before the roll-out of a new model.
Without actual info on sales numbers, it's just hearsay.

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jxdxbx
Typical "analyst" bullshit.

Even if the story were true, alternate explanations seem more likely. E.g.
Apple is moving to a 6-month tempo for updates, which would affect component
ordering about now. Or, it could just be that Apple is moving more of its
component orders from one manufacturer to another--many iPhone components are
multiply-sourced.

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huxley
When there is no news, they make up some news, see a similar story from 2011:

[http://news.cnet.com/8301-13506_3-57321362-17/slower-
iphone-...](http://news.cnet.com/8301-13506_3-57321362-17/slower-
iphone-4s-demand-making-apple-rethink-supply-orders/)

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bertomartin
Long or Short, would you put your money on your prognostications?

