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.
- Via CNET