What's the take-away from Apple slashing iPhone production?
Summary: According to Friedman Billings Ramsey analyst Craig Berger, Apple has made deep cuts Q4 iPhone production plans by "as much as 40%", far more than originally estimated.
According to Friedman Billings Ramsey analyst Craig Berger, Apple has made deep cuts Q4 iPhone production plans by "as much as 40%", far more than originally estimated.
Berger believes that this is a sign of "global macroecomomic weakness:"
That the firm's iPhone production plans are being revised lower suggests that the global macroecomomic weakness is impacting even high-end consumers, those that are more likely to buy Apple's expensive gadgets, and that no market segment will be spared in this global downturn. This is a negative signal for global demand, in our view.
Hmmm ... I'm reluctant to make the call that the iPhone is in trouble? Why? Because there could be other factors at play here. For example:
- Last quarter, Apple had 2 million iPhones in channel inventory - that's a lot of handsets.
- Apple could be cutting inventory in the hope of picking up components cheaper after the Holiday quarter.
- Past talk of iPod production cuts have always turned out either to be bogus, or not to have any overall correlation to quarterly sales.
- This could all be down to Apple curring orders for a particular part, and rather than indicating a cut in production, it could mean that Apple is swapping suppliers.
... or this could be a sign that Apple isn't immune to the negative effects of the choppy financial seas companies are having to sail and is battening down the hatches to weather a coming storm.
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Talkback
Approaching End Of Cycle?
Otherwise I would guess it's all of the above.
re: Cut in iPhone Production
Possibly...
More likely it's just hit the same wall all popular smartphones have - an initial rush followed by a drop off in demand as newer models come out or are announced. The pace of the mobile phone industry is unbelievably brutal.
RE: What's the take-away from Apple slashing iPhone production?
It's not just Apple. It's everything. Sorry to say.
Get out and vote America. Time for 'Change'.
As if ....
Yeah, intelligence is "bad"
RE: What's the take-away from Apple slashing iPhone production?
Since you obviously have some aspirations to being regarded
as a professional on-line journalist, why not start with the
obvious question, "does Friedman Billings Ramsey analyst
Craig Berger in fact know anything about Apple's Q4 iPhone
production plans?"
Probably not...
What would be better is to see how that IMEI tracker the guys at Bullish Cross were working on is going as that should give a good indication of burn rate.
Would you care to explain this?
comment you are responding to.
Well...
Now, bear in mind that these are manufacturing codes and we know that 7 million were sold to end September, not 9 million, if we remove the outliers we have:
End Week 27: 1,037,400
End Week 31: 3,334,650 (2,297,250)
End Week 36: 7,269,150 (3,394,500)
End Week 40: 9,190,680 (1,921,530)
Which suggests a sharp ramp up, peak and then decrease in manufacturing to end September. If we have data for October we can then determine if demand is waning or not.
Pretty simple, no?
Pretty simple, yes... but inconclusive
production after the initial inventory surge of a new
product. After all, Apple had to create the base
inventory to market the new product and supposedly
would calculate how many are needed to maintain
reasonable inventory while not over-producing which
would create warehousing costs.
The idea that they are considering maintaining a near-
2 million-unit-per-month production level pretty
much implies that demand hasn't dropped. That also
seems to imply that they could, should the demand be
there, sell as many as 20 million iPhones in the next
year using the numbers you provide. I think we can
both agree that such a number is currently unlikely,
but not impossible.
Oh, and based on your own referenced numbers, that's
pretty much implying 7 million G3 iPhones when the 10
million in '08 mark includes all versions. This, then,
implies that the real numbers might be significantly
higher when you do count the 1st-gen version.
Well...
However, it's worth pointing out that the first generation iPhone had a similar demand curve.
... had a similar demand curve.
Sure...
It's not like that slowed down...
for that and that was a mere 7 months after the 1st-gen
iPhone. I almost expect to hear news of a new model or
upgrade during MacWorldSF in Jan.
I have to agree...
no sources for his claims. Essentially, it seemed he was
"crying wolf" much like the teenager a few weeks ago
with the false 'heart attack' report. This time, however,
it's a person cognizant of the stock market and how it
would react to such a report. Proof of this reaction is
evident by the sudden slide yesterday after this report
was announced.
RE: What's the take-away from Apple slashing iPhone production?
Wrong
knows is 98% of Americans.
Those making over $250,000 a year will have to buy 115% of
all existing iPhones so that they can then keep 2%, and give
113% to the government where bureaucrats will promptly lose
25% to waste and corruption and give you the remaining 98%
(except for aunt Zytuni, who doesn't need one in the slum),
and everyone will then be happily middle class.
P.S. DON'T question the numbers, Obama knows what he's
doing; you don't, you selfish capitalist.
LOL <nt>
oh hooded one...