Apple Cuts New iPhone Production by 30 Percent

Posted on November 19, 2018 by Paul Thurrott in Apple, iOS with 75 Comments

An explosive new report in the Wall Street Journal says that Apple has cut production of all three new iPhones by 30 percent. This news piles on previous reports which had suggested the cuts applied only to the iPhone XR.

Citing multiple sources, the publication says that Apple has cut orders for “all three of the iPhone models that it unveiled in September”—meaning the iPhone XS, iPhone XS Max, and the iPhone XR. As result, the firm has asked component suppliers to reduce production by up to 30 percent.

Apple had originally expected to sell about 70 million iPhones between September and February. So this production reduction suggests that the firm will now sell only about 50 million of the handsets.

The news comes in the wake of multiple reports about specific iPhone suppliers seeing Apple reduce its orders in recent weeks. In the first week of November, Nikkei reported that demand for the iPhone XR was “disappointing,” causing Apple to halt plans to ramp up extra production of the handset. Then, a week later, Lumentum, which supplies FaceID components for the iPhone XS, XS Max, and XR, lowered its profit and revenue forecasts thanks to reduced orders from Apple.

Apple’s market value has plunged this month thanks to these reports: Its market cap is $918 billion at the time of this writing, far below the $1 trillion it had hit in August. But it’s now clear that the consumer electronics giant saw this plunge coming: When it announced its latest quarter earnings statement in October, Apple said that it would no longer report unit sales figures for iPhone, iPad, and the Mac, a key metric for determining how well these products are faring in the market.

As bad, Apple has suffered from a serious decline in product quality over the past few years. And its inability to deliver the products that its customers want—at prices they can afford—is perhaps finally started to have its impact as well.

Given all this, Apple’s decision to raise prices across the board by 20 percent—which I call Apple Jacked—might have come at exactly the wrong time.

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Comments (75)

75 responses to “Apple Cuts New iPhone Production by 30 Percent”

  1. Avatar

    dcdevito

    Looks like trouble in paradise

  2. Avatar

    PeterC

    Hmmm, come on Paul. All smartphone sales are declining. Chinese market declining too. Apple, Samsung, LG etc all declining. Google doesn’t even feature on the lists!


    The only brands growing are Huawei (+41% YOY) and Xiaomi (+43% YOY) mainly through taking Chinese market share from others. LG are toppling in my opinion (-24% YOY) and Samsung are being very very squeezed (-11% YOY). Apple (+1% YOY).


    The age of mobile choice is disappearing fast. We will have Less handsets, higher prices, more expensive services and longer carrier term contracts...... sound familiar? just look at the content streaming market. Everyone’s building their walled garden to ride out the upcoming financial troubles. Buckle up.


    ***edited with some year on year growth figures.


    • Avatar

      maethorechannen

      In reply to PeterC:

      The only brands growing are Huawei (+41% YOY) and Xiaomi (+43% YOY) mainly through taking Chinese market share from others.


      The two brands providing the best value are doing the best. What a shocker.


      It's not just China though. Here in the UK, Huawei have been on aggressive marketing push (with very Samsung-ish ads) and Xiaomi have opened their first store in London.

    • Avatar

      Shane

      In reply to PeterC:

      So this isn't news. Interesting.

      Perhaps you are an Apple fan boy.


      But whatever. This is major news. And im sure news that Apple sad sites will not report.

      • Avatar

        Gregory Steeno

        In reply to Shane:


        It isn't reliable news. Their supply chain is so vast and complex, take this info with a grain of salt.


        Plus, Apple did give guidance north of $90B (!) for the upcoming quarter. We'll see if they adjust it mid-stream, but I don't recall them doing that ever.

      • Avatar

        lvthunder

        In reply to Shane:

        It's news, but I wouldn't call it major news.

      • Avatar

        PeterC

        In reply to Shane:

        No, I just watch business data. A lot.

        the interesting thing to consider is who benefits from such a market cycle, whilst always keeping an eye on market share price manipulations too.

        The 3 main brands all make their own handset chips, and each is very busy differentiating their offering through their silicon designs. This is the area to watch.

  3. Avatar

    Angusmatheson

    This happens every time apple comes out with an iPhone that is really new. The 6 plus increased sales and everyone thought that the increased sales would continue, but it didn’t. Things went back to normal. It looks like the X did the same thing, got people excited. Then back to normal. It is going to take something special - a great car, AR glasses. Can Apple do it? Who knows. But they will keep selling a lot of phones and make lots of profit on those.

  4. Avatar

    gvan

    The Touch ID based phones are selling just fine. Maybe, a lot of people don’t like Face ID and are waiting for new Touch ID models or buying iPhone 8’s (like everyone I know).


    • Avatar

      UbelhorJ

      In reply to gvan:

      I've heard plenty of non-tech people dismiss the newer iPhone due to a lack of home button.


      They don't actually care about bezels or notches. They don't want fancy or interesting. They just want simplicity and Facebook.


      The older iPhones are cheaper and familiar.

  5. Avatar

    markbyrn

    As CNBC reported last week, "Apple analysts have a long history of misreading weak iPhone demand based on supplier rumors."


    However as you pointed out, Apple announced that it would no longer report unit sales figures for iPhone, iPad, and the Mac. That will only lead to an exponential increase in analyst speculation with nothing coming from Apple to dispel any speculation, true or false.


    Unfortunately Tim Cook has fallen asleep at the wheel and is more concerned about promoting his personal social & political issues vice innovation and quality.


    • Avatar

      lvthunder

      In reply to markbyrn:

      I disagree. There really isn't much innovation left in phones. There comes a point when all the major innovation has been done. Apple's chips are better than the other ARM chips. The next big innovation needs to be in battery technology, but I don't think Apple and most other phone manufacturers has the experience to pull that off.

  6. Avatar

    Pierre Masse

    Now if they want growth, will they squeeze the lemon harder or will they let more people enter their ecosystem? If they choose the latter, will they add a new class of cheaper products or simply lower their prices? Frankly, I don't think they can lower the specs of their products, especially in the Mac line.

  7. Avatar

    skane2600

    I'm just glad we never jumped on the iPhone bandwagon in the first place. We didn't buy the kids smartphones until they were teenagers and then only cheap ones.

  8. Avatar

    BMcDonald

    "at prices they can afford"


    This rule wins every time. Once people stop showing up at the counter - it's over.


    B

  9. Avatar

    Jeffsters

    Been saying it for 15 years! Apple is doomed!

  10. Avatar

    bastecklein

    I just don't think that the market for $1,000+ phones is very big. Apple needs to keep low cost offerings, and $700 - $800 is not really low cost either.


    Looking at Apple's pricing across the board over the last few years, it is becoming clear that the accountants have taken control of the company, and the customer has been pushed aside in favor of Wall Street. They are sacrificing their image and their long-term prospects for short-term profit gains.

  11. Avatar

    MutualCore

    The iOS moat is too strong. Apple can guarantee 150-170 million iPhones sales per year unless something revolutionary comes along to take 50% of their user base away. Chances of that happening - 5% in the next 5 years. 10% in 10 years.

  12. Avatar

    NT6.1

    The beginning of the end for Apple. They'll be the next Nokia.

  13. Avatar

    the_real_entheos

    As the last line of the article mentions subtly, They should just bite the bullet and lower their prices across the board on all of their products. They have been the top profit margin per phone by far, why seek to make it even better, when at the cost of volume quickly leads to the road of niche products and contracts the potential markets for the app store / apple music / tv? Extremely short-sighted "Wall Street think" is damaging the future of Apple.

  14. Avatar

    Jorge Garcia

    The drop is probably real and logical...but iMessage alone will keep Apple from falling off any real steep cliffs for a good 7-10 years in my opinion. For now, I'd expect a leveling off at some sustainable point...then an eventual cliff dive in 7-10 years once the stigma of being a green bubble has worked its way through the current generations of kids. Now, as for AAPL stock, that might be a different story, I do see a lot of cliff diving there as we enter the great recession phase II.

  15. Avatar

    Daekar

    More and more people I know are buying used phones. In fact, one of my inspectors Skyped me today to ask where I suggest she get a used phone to replace the one her daughter had just broken. For the second time.


    We haven't bought new phones for the last two generations, and will replace our current phones from the used market too, and save half the expense.


    Has anybody else seen this pattern?

    • Avatar

      jecouch66

      In reply to Daekar:

      Yes. My best friend buys her family's iPhones and loads this way.

    • Avatar

      PeterC

      In reply to Daekar:

      I think it depends on local region, but broadly yes I do see it. The “after-market enthusiast” business will likely boom even more in the upcoming years. It’s like cyanogen threw in the towel too soon, someone’s going to deliver a healthy business in after market ROMs one day, that actually makes money. I keep telling my son... learn how to make a custom rom and do this ...... he doesn’t listen, but hey who does!!! ?



      • Avatar

        maethorechannen

        In reply to PeterC:


        I think there's a difference between Android and iPhone - with Android, you can get a new phone with the specs of 2 - 3 year old flagship fairly cheaply. That's not the same for the iPhone, so I'm not surprised people are looking into the used market.

  16. Avatar

    Xatom

    This is very predictable. Pricing rose too fast with very little incremental value being delivered. Apple has done a great job of convincing the market that it is highly innovated when in reality it is very conservative and disciplined and never delivers too much value with any upgrade. This has simply caught up with them in this cycle but they are a great company and will address this in a cycle or two.


    Is it really much of surprise that most Americans cant afford a 1,000 phone. The apologists say but i hardly feel it when it's $x per month. Of course those are the same people who don't have to worry about food and rent.

  17. Avatar

    innitrichie

    I don't think it's a coincidence this is the first year in a long time that they released an iOS update that made older devices faster and more usable, as some form of apology for the throttling fiasco. I am sure this will have made a considerable number of people think they don't really need to buy a new $1,000 phone this year. Next year Apple will fix this problem.

    • Avatar

      MutualCore

      In reply to innitrichie:

      My iPhone 6S is at least not any slower running iOS 12, but the battery life is horrific. I even had the battery swapped over a year ago due to some issue they had with certain batches of iPhones from 2015. Yet the battery life remains terrible. I can get down to 50% within 1 hour depending on usage. That's how things are on Android!

  18. Avatar

    Tony Barrett

    Are we really, possibly just starting to see the Apple bubble starting to stretch? Could it be possible? The signs are there - average selling price increasing massively, stopping the announcement of number of phones sold, flat sales, financial markets showing signs of worry. Normally, you could put a drop in iPhone sales down to seasonal adjustments or people waiting for a new model, but that doesn't seem to be happening now. Apple are stretching their customers to breaking point with higher handset costs, expensive support and worryingly, a drop in quality and a lack of 'must have' new features.

    Because they're no longer listing sales numbers, it's all down to the bottom line, so if Apple can massage that with more expensive iDevices, signing users up for more services and increasing their monthly user subscription fees, maybe that can cover it, but for how long? A vast percentage of Apple's business model is built around the iPhone - maybe customers are finally starting to push back?

  19. Avatar

    BeckoningEagle

    I think that as ecosystems try to be more open, Apple will make the same mistake it did with the MAC. I have found it easy to move to Android whereas a few years ago I couldn't. Things like Movies Anywhere have made the ecosystem change easier.

    If what has happened to me, where I kind of went into a digital fed-up state where I stopped using Facebook, Twitter and concentrate on getting my news from the 3 or 4 trustworthy sites where I've always gotten my news, happens to a lot more people (I am guessing it is), then apple is in trouble.


    Phones that are too expensive but do what a $300.00 phone can do make these 300.00 phones not only attractive, but disposable. Meaning that I do not invest in 40.00 screen protectors or 100.00 cases on top of the other phone, because if I break it, I can always get a new one.


    The fact that in Android I can replace my messaging app, my email app, my browser, and if I get creative I can even replace the play store is what has made me choose Android. It is a bit more cumbersome, of course, but with time it has become easier. First time I used Android switched back to iPhone. This happened twice, as I had the experience that I was locked down, but it always worked.


    Now it is a different story, as software quality has also gone down at Apple, I find that the "it just works" is no longer true. I was also able to get rid of my Apple TVs and just use the XBox.


    I am just happier without apple in my life. I just hope my kids and wife see the light at some point.

    • Avatar

      jimchamplin

      In reply to BeckoningEagle:

      I could never consider a $300 item disposable. In fact, my family and friends know that if I ever do, they’re to have me committed immediately.

      • Avatar

        red.radar

        In reply to jimchamplin:

        The problem with your analysis is android phones are cheaper but are they really a better value?


        when you factor in that Apple supports a phone for 5 years you can amortize the cost out over longer period.


        Also the security situation of android is improving but still a concern.


        No doubt this will cause a correction of course for Apple, but I don’t think I they are doomed.


        I used android for many years and switched to iOS because I got tired of lack of support and Became prejudice towards google products.

      • Avatar

        BeckoningEagle

        In reply to jimchamplin:

        When you take into account the amount of money spent protecting the device with insurance and everything you end up paying more for these "protections" than for the device itself, which was my point. Maybe it was a poor choice of words and should be "easier to replace".

  20. Avatar

    Yaggs

    I think we are finally hitting a point where the new devices coming out every 8 months don't provide the value that they used to. I don't think there numbers are down because people are moving to Android... I think people are just deciding that the year old phone they have is still good enough to suit their needs. The "cool factor" of the Apple stuff is wearing off a little too. I don't think it carries the same perceived status that it used to... every one isn't trying to convince themselves they need to have the latest greatest ever few months.

  21. Avatar

    wolters

    I wanted to give a real world update when it comes to the iPhone...


    I'm IT DIRECTOR (and SOLO IT person) for a manufacturing company. We deploy iPhones and two models of Android Phones: Pixel's and Moto G's. I can honestly say I have more issues with iPhones than any other phone. Most get caught in boot loops or never leave the Apple Screen...some have bad speaker issues...some have touch issues...I have a drawer full of iPhones ready for our next recycling run. Despite the news reports of Pixel issues, I've never had to replace one, and that goes back to the original Pixel.


    The last 3 iPhones I've purchased have been the Xr's due to the cost savings. We still get 1 or 2 year contract prices on our corporate account and we can get a 256gb Xr for $449 and that's a no-brainer for our iPhone users. None of our users are power users or always want latest and greatest. They simply want iOS. And when their phone breaks, they just want to continue using iPhones.

  22. Avatar

    obarthelemy

    It's not just iPhones, all flagships are overservng like crazy. Plus iPhones have lost the distinction of being the only cute, reliable, easy to use devices because the competition has leveled up its game, boith Android in general for ease of use and OEMs for cuteness. And Apple has lost its game: no more audio jack, no more buttons... that's hassles for regular Joes and Janes. And Apple services are so expensive, they're an argument for disposable devices.


    I've switched about 10 iUsers or flasghippers to the $150 Xiaomi Redmi Note 5. Everyone's happy (I did pick them carefully ^^). That thing is a cute iPhone 6 / Galaxy S7 equivalent, at a third to half of the current price, and with distinct advantages (SD, IR, FM, jack, better pics and battery though lower performance...)

  23. Avatar

    John Craig

    I've never been an iPhone user, but my wife and 2 daughters have been on them for years.


    This year, they physically cannot afford to upgrade.


    My wife has an iPhone 7. Her contract expires in December. She went onto Vodafone's website over the weekend. We're looking at anything from £100-200 upfront, and £70-80 a month on a two year contract.


    £2000 for a phone. Nope, nope, nope.


    My wife doesn't follow technology news at all. I've been telling her for months now that 2018 is the year Apple finally crossed the line between "dayum, that's expensive!" to "Holy sweet Jesus, you want how much for it?"


    The look on her face when she was on the Vodafone website. Priceless :P


    My kids are holding onto thier 6s and 6s plus devices. We've told them that if they want to upgrade, we'll look into buying them the iPhone 8, which Apple still sells directly on thier website, but as it's £700 for the cheapest option, they'll have to pony up £400 each in saved pocket money.


    That shut the conversation down pretty quickly.


    It's hard to believe that Apple's response to market saturation is to hike prices. What did they think would happen? Even isheep have thier limits.


    So, this is how it's ended: wife has told Vodafone to get stuffed and is holding onto her 7 for another two years on sim only, and my kids have decided they'd rather stick with what they have and spend the money hitting Selfridges and Carnaby Street in December.


    And Apple have just lost 3 sales that would have happened by default a couple of years ago.


    I would imagine a very high number of people around the world are making similar decisions about upgrading.

    • Avatar

      lvthunder

      In reply to John_Craig:

      That's a good thing. We don't need to be switching phones every year. From the original iPhone I've always bought every third iPhone.

    • Avatar

      Mike Widrick

      In reply to John_Craig:

      What you're missing is exactly what Apple hinted at in their quarterly results: as long as your wife keeps her old iphone and you subscribe to Apple music or icloud, they'll come out ahead. It's more profitable than building quality devices, even ones that go for kilopounds.

    • Avatar

      wp7mango

      In reply to John_Craig:


      Because of their large cash reserves, Apple is able to test the price hike in a saturated market. Put simply, they can afford to make this mistake because 50 million phone sold is still a lot of phones, and because they have enough of a cash buffer to make any price adjustments.


      What Apple can't fix easily is a large long-term swing in mindshare away from the Apple brand. Once enough people start to think Apple is not so cool, or that it really is trying to fleece them, then the damage becomes harder to fix.


      Another factor, possibly overlooked, is Huawei. Imagine if it became available in the USA...

      • Avatar

        Angusmatheson

        In reply to WP7Mango:

        there is a couple of ways to think about this. 1) Apple is a luxury brand. I have never thought the Apple was a luxury brand. But thought of that way, lowering prices is the worst thing they can do. It stops being special, and loses its cache. 2) Apple has millions of locked in users. Those users have a hard time changing. Getting the most out of those users by paying more for upgrades and getting more out of services. 3) I really think apple makes what they think is the best product, then adds a couple hundred dollars to the cost and sell it. I admit their decisions about the best product - trash can Mac, MacBook Pro keyboard - have been far from perfect. I think apple is happy to sell less expensive things, but does feel that have to push to make things better. And retina screens in the new MacBook Air are expensive - PC ultrabooks are similar priced. In this version lowering prices would also be wrong because the price is cost plus profit and apple is refusing to cut profit to increase sales.

      • Avatar

        robincapper

        In reply to WP7Mango:

        Re Huawei, here in NZ seeing new ancient iPhones (SE, 6/6S), on sale next to their more capable models but still at 2x to 3x Huawei price shows the power of the A

      • Avatar

        John Craig

        In reply to WP7Mango:
        You're absolutely right. It's the PR damage that'll be thier undoing. My wife and 18 year old had an anti-apple epiphany over the weekend. A one-to-one meeting with Phil Schiller himself wouldn't convince them to buy Apple right now.
        The 13 year old still thinks the only device worth being seen with is an iPhone, but I suspect that's going to change soon.
        These price's are going to force parents to buy cheaper Android devices for thier kids. And if kids start touting £200 Androids as cool devices, it'll be a domino effect.
        The iPhone can stop being the cool device just as quickly as it became the only phone to be seen with.
        If teenagers stop carrying them, then Apple has a big problem.


  24. Avatar

    dsharp75

    Maybe people will finally understand that brand doesn't always equate to quality and that old saying about getting what you pay for (which I think is nonsense) may make people (finally) step back from the "Apple is the best" cliff and realize that overpaying does not mean you're getting "the best".

    The best is what works best for you, not what a self congratulatory firm keeps telling you.

  25. Avatar

    Bats

    The reason for this is crystal clear. It's price. Not quality, but price. Not just that, but they're hasnt been much reason for anyone to upgrade their phones. Hopefully this leads to Apple cutting the price of the iPhones, because surely the Android leaders Samsung and Google will follow suit, as well as the others.

  26. Avatar

    beckerrt

    The iPhone lineup, and the phones themselves, are just way too complicated. I still struggle to figure out why the home button and Touch ID were axed. Seriously, what was the point? I kinda miss the days when Apple only had one flagship it announced each year. Keep it simple.

  27. Avatar

    captobie

    I have a feeling phones are getting to the same place PC's and tablets are. Phone's have gotten good enough that there's no longer a compelling reason to upgrade every one or two years.

    • Avatar

      iantrem

      In reply to captobie:

      There are plenty of people that get a phone as part of a two-year plan the price of which will include the cost of the phone spread over the 24 months. If phone companies start dropping that "add on" from the monthly cost once the phone is paid for, I think you'll be right.


      However, the premium phone market (Apple, Samsung, Pixel) seem to be more after the "unlocked" crowd who get plans without phones attached and are more likely to get a phone each year, so these are more likely to lose sales now the wow factor has gone out of new handsets.

  28. Avatar

    mjtomlin

    It’s funny when things just get regurgitated back and forth over the internet and no one decides to actually do some kind of “reality” check.


    First... Anyone with half a brain can do enough research and see that this HAPPENS EVERY YEAR and it does not foretell Apple’s doom. Apple builds up production to ungodly levels when they release new products and then level the production down to a point where they believe supply can keep pace with demand (Foxconn has been known to hire and then layoff hundreds of thousands of assembly workers during this period.). Some years it takes a little longer to achieve that when you’re using brand new components that might be difficult to mass produce. Last year, it was the OLED display and some of the TrueDepth camera components. This year, both LG and Samsung are making OLED screens, and Apple invested 390 million to another company to build a new factory to produce certain TrueDepth components.


    Second... Again a little research will show that basing Apple’s performance off supplier performance is completely misguided unless you take into account all the suppliers that supply Apple with that component. If you look at all the above suppliers who are hurting, they have competitors to which Apple has taken their business.


    When the anti-Apple drum starts beating, it seems most people fall deaf to common sense.



    Also wanted to add...


    Apple’s list of supplier’s tops 200, some of which make a majority of their revenue from Apple’s business. If there really was a dire issue with demand for Apple’s products, there would be many, many more suppliers than what was listed above... some of which might very well go completely under.

    • Avatar

      Jeffery Commaroto

      In reply to mjtomlin:

      I am with you. I don't doubt the explosive growth we've seen in the past is coming to an end for the entire industry. Everyone is watching the ship fall back to Earth and Apple rightly gave guidance in line with that reality.


      With that said, how many times is this same story going to get written before we become skeptical and take a wait and see attitude? Every darn year we go through this.

    • Avatar

      Chris Payne

      In reply to mjtomlin:

      ^^^^ this!!! So much this!! I can’t believe we have to do this every frickin year.

    • Avatar

      red.radar

      In reply to mjtomlin:

      I agree with your premise and In the past it was absolutely true. However Apple has decided to stop giving guidance on its hardware breakout. This has to lead you to believe that the tide is changing. It is unfortunate because it fuels the haters/fanboys to crow from the top of headlines I told you do. I still don’t believe the analysis is 100% accurate and think there is some nuance.


      probably a good time to take some profits on Apple stock and wait for them to bottom out as they refocus on the next transition.


      we Need Apple because the alternative is a google dominated world and we know how they bend the boundaries of ethics

      • Avatar

        PeterC

        In reply to red.radar:

        apple are some $74 billion invested into a $100 billion share buyback in the last year and "supplier slowdown announcements" always affect share price, funny that.


        If apple are truly tanking, and they might be, we will see in Q1 revenue. Its their Q1 trading that always been their annual highpoint.


        Ok no handset numbers will make life difficult for simple arithmetic, but there's always a way to benchmark. And... you know i'd watch wiley Tim Cook, everyone is stating that apple not giving handset sales numbers is because of possible handset declines etc. The thing is, it ALSO hides component use/demand.


        The fact they're going to give intel the boot from their modem chip supply (they've already booted Qualcomm) tells you they intend to maintain and increase margin there. We know theyre heavily invested in their own screen tech manufacture too, A series chips already etc etc.


        A company whose going to transition to its own component design/supply in many key areas isn't going to "announce its" demand publicly. They want to make double bubble wherever they can, higher margin, and they aint going to tell their competition how, what why or where they do it.... why would you, I wouldn't.


        The 3 big players make a lot of their own components/chips/screens - its where this is won or lost.

  29. Avatar

    jimchamplin

    We’ll see how accurate this is later. Anyone remember last year when Nikkei et al were trotting these same bold claims out... and it turned out not to be true? It’s all part of the pitiful financial news cycle which actually exists not to get information to people but to allow pundits to affect stock prices so they may line their own pockets.

  30. Avatar

    rmlounsbury

    I have a feeling that people are't so excited to drop big dollars on a mobile phone anymore. Especially now that most iPhone's get a pretty long run with support and OS upgrades and Apple made a point in their last iPhone event that they are working hard to keep hold handsets running longer.


    A combination of market saturation and Apple keeping legacy iPhones relevant for longer periods of time was bound to each into the bottom line. I can't imagine most people are willing to drop $749 on an XR much less $999 for the entry XS when the iPhone 7 can still be had brand new for $449/$569 entry (regular/plus). To that end the 6 is still supported by iOS 12 which is 4 years old and while probably running slow these days still functions.


    Techno-geeks like many of us here that are likely more willing to spend to have the latest and greatest are probably rare creatures in the market. Heck, I still see Galaxy S5 and S6 devices in the market here and there and even the odd iPhone 5S or SE. I think this has less to do with Apple's cool-factor or reality distorition field and more with newer phones simply do not innovate enough especially not enough to justify the costs associated with the current crop of iPhones. It probably doesn't help that subsidies are gone which perpetuated the 2-year upgrade cycle. With people seeing that monthly payment instead of a onetime $200 up-front fee to upgrade your device every two years the cost probably stings a little more.

  31. Avatar

    will

    I guess the truth will show up, sort of, in the next earnings report. When it comes to news on Apple I tend to take a small wait and see approach as the news has often times been wrong. Example was all of the doom and gloom that the iPhone X was tanking but when the earnings report showed it was the number one selling iPhone.

    Now I am not saying there is nothing here, just that when it comes to this type of news it has been wrong before. We will sort of know more in a few months...just not exact number of units sold ;)

  32. Avatar

    provision l-3

    So we go through this every year right? I mean these reports come out like clockwork and Paul reports on them with such exuberance and then they just turn out to be bunk and then Paul has to print a retraction ..... oh wait, that last part doesn't happen.


    Anyway, I guess that this time it could be true that iPhone sales are tanking. That is certainly within the realm of probability.


    I do find it odd that in face of that of such a massive short fall Apple has not warned that they will miss their finical guidance for the current quarter. Something the SEC requires them to do. It's also odd that only had handful of Apple's 200+ suppliers have reported any impact from such a massive short. Even more odd, Lumentum doesn't even show up as a supplier on Apple 2018 supplier list which make up 98% of Apple's procurement expenditures.


    images. apple .com/supplier-responsibility/pdf/Apple-Supplier-List.pdf


    But again, the reports could be true this time even if somewhat questionable.



    • Avatar

      MikeGalos

      In reply to provision l-3:

      By Apple's own numbers

      iPhone sales are flat

      iPad sales are down

      Macintosh sales are down

      Services are up


      That's not Paul. That's not "we go through this every year" - well, it kind of is for iPad sales.


      Apple didn't announce they're dropping device breakdowns from their quarterlies because they want to hide GOOD news.

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        provision l-3

        In reply to MikeGalos:

        Just to be clear, you are picking a single quarter for your data points and drawing broader conclusions which seems like a dubious way to do things but your cherry picking of data is really irrelevant to my point.


        What we go though every year (for at least the last 4-5) is a new iPhone comes out and Nikkei publishes a report that said iPhone isn't doing well as expected due to reports from a supplier or two. Said report gets repeated here and elsewhere without the simplest of analysis done to see if it makes sense. You know, like seeing if the supplier mentioned is even an Apple supplier.


        Then Apple manages to meet its quarterly guidance and it turns out all the reports were bunk.


        I don't think the it is a stretch to say that if Apple had to cut orders by 30% then that would have a finical impact on Apple. How could it not? The entire narrative is that Apple had to raise prices to meet its financials. So, Apple is heavily depended on iPhones for revenue, had to raise prices to meet finical growth, is now coming up 30% on sales but has not had to issue a warning that they will not meet their financial guidance for the quarter as required by the SEC.


        The possible explanations at this point are: Apple has opted to violate SEC rules, Some other product has miraculously taken off and no one has noticed or someone has drawn incorrect conclusions from a small number of supply chain data points.


        As I said before (twice), it could be happening. Apple's iPhone sales may have dropped by 30% but I don't think a reasonable assessment points to that.



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