It may be wrong to believe the rumors that Apple has lowered down the iPhone 5 orders because of slumping demand of the device. Shaw Wu, the Sterne Agee analyst has recently declared in a research that Apple’s cuts to the component orders of the iPhone 5 have nothing to do with the weak demands. Rather, he said that while the orders are low, they are because of improved yields thereby meaning lower component builds as well as supplier shifts.
What analysts have to say?
Also, William Power, the Baird analyst offered similar research saying that they were raising the calendar 4th quarter iPhone forecast a bit, adding that most of the demand indicators actually remain favorable.
Wu also added that iPhone 5 demands remain robust, as far as they can predict. This debate over the orders of iPhone 5 actually came into limelight when The Wall Street Journal reported that the company has cut the iPhone 5 screen order by almost half the number. The sources said that this cut was mainly because of weaker than predicted demand.
Now as the analysts are making it clear that the demand for iPhone 5 is doing fine, an analyst at the JP Morgan, Mark Moskowitz said that the demand rumors are just noise. He went further to report that order cuts are the direct result of the manufacturing yields enhancing following fast and furious product roll out of iPhone 5 and new Macs and iPads.
So, basically why was there so much of panic about the rumored weak demand of the iPhone 5? In fact, as per the sources for The Wall Street Journal, Apple has actually cut the iPhone 5 display orders to half. The other component orders have also been reduced. Many also feel that this is a sign that the demand for the device has reduced following its amazing start and that the company was not selling as much amount of units as it has basically anticipated.
Rumor or truth?
Now the analysts are trying hard to clear up the rumors and dismiss the reports as untrue. The report of the Wall Street Journal has highlighted that component cuts may have been linked with better yielding rates and it seems that it is more likely to be true. Whether Apple’s share rate will increase again or not following the news remains to be watched out now.
Despite recent issues, Wu expects the company to post better earnings for December quarter by sales of around 47.5 million handsets with gross margin of approximately 38.7 percent. Both the estimates are indeed above the expectations of Wall Street.
So, let’s wait and see if the demand and cuts rumors actually turn out to be true or not. Till that time, stay connected to have more of iPhone related stuff.