Reports: Apple slashes iPhone component orders
While some experts take the news with some salt, others explain the downturn by citing rocketing sales of Samsung's Galaxy S III
Computerworld - Apple has slashed orders for iPhone screens in the first quarter by half, according to Monday reports out of both Japan and the U.S.
Earlier today, Japan's Nikkei and the U.S.-based Wall Street Journal (subscription required), both citing unnamed sources, claimed that iPhone display orders had dropped to about half what Apple had previously planned for the quarter ending March 31.
Suppliers were notified of the cuts last month, according to the Wall Street Journal, and the scale-backs involved other components beside screens.
Investors interpreted the reports as bad news -- that Apple expects iPhone sales will dramatically slow -- and pushed the company's stock price down 3.4%, or nearly $18, to $502.50, by 1:30 p.m. ET.
Some analysts were skeptical of the reports, considering other evidence -- including an iPhone sales record by AT&T in the fourth quarter -- that pointed to the contrary.
"Anything is possible, but [the reports] are not consistent with other evidence coming in," said Ezra Gottheil, an analyst with Technology Business Research.
Even so, Gottheil offered explanations for the cutbacks, assuming they have occurred. "Other smartphone companies have caught up [to the iPhone] in performance and design in their new devices," Gottheil said. "Competing products are relatively stronger than they were two years ago."
Darren Hayes, an assistant professor at Pace University's Seidenberg School of Computer Science and Information Systems in New York, put more credence in the reports, and echoed Gottheil's rationale for the falling orders.
"Given the recent numbers of the Galaxy S III, Samsung is a serious competitor, so I'm not surprised that some of the initial hype over the iPhone 5 has dissipated," said Hayes in a Monday interview. "The Galaxy is a trendy phone for young people, and I see lots of students buying these."
Hayes also ticked off some of the familiar knocks against Apple's business model, ranging from its intransigence over high carrier subsidies and the Maps debacle to its habit of upgrading the iPhone annually, saying that those decisions have come home to roost.
- What to listen for during Apple's earnings call today
- Timeline: How Apple's iOS gained enterprise cred
- Apple and IBM: A winning combo for IT
- IBM and Apple ties go way back
- Apple quickly counters China claim of iPhone spying
- China calls the iPhone and iOS 7 threats to national security
- Apple's CarPlay to dominate infotainment systems, will be in 24M cars by 2019
- Dev interest in OS X Yosemite is 4X what it was for Mavericks in '13
- Apple yanks Google Maps from iCloud's 'Find My iPhone'
- Gartner scales back Windows forecast
- Tips for Driving User Adoption in New Technology Deployment Read this checklist on tips for driving user adoption to see where you stand.
- Software Asset Management: Ensuring Today's Assets Today's trends like BYOD and SaaS are new and exciting in terms of how they will help make our jobs more productive but...
- Trends Shaping Software Management: 2014 Most IT executives recognize the relationship between mobile computing and worker productivity, and have long issued notebook computers and other mobile devices to...
- Software Asset Management: Pay Attention or Pay Up There is a wide range of options for managing software assets, from in-house solutions to the cloud to managed services providers. Read this...
- IBM FlashSystem V840: Leveraging Software-Defined Flash to Drive Your Business With end-to-end, tightly integrated functionality and super-fast flash technology, products like IBM FlashSystem V840 Enterprise Performance Solution empower businesses to leverage the efficiency...
- Leveraging Flash Storage to Accelerate Oracle Real Application Clusters Join this webinar to understand the latest solid-state storage trends, the specific applications driving solid-state storage deployments and the benefits of deploying the... All Smartphones White Papers | Webcasts
Our new weekly Consumerization of IT newsletter covers a wide range of trends including BYOD, smartphones, tablets, MDM, cloud, social and what it all means for IT. Subscribe now and stay up to date!