Think about this for a moment. iPhone sales could be dragging down iPhone X sales. Ludicrous, right? In essence, that’s an argument being made to 1) gin up a controversy on a slow news day, or, 2) create a controversy where none exists, or, 3) refer back to #1.
Somehow someone pulled that argument out of a Digitimes report on the iPhone supply chain because, as Apple always does this time of year, orders have been trimmed. OK, what’s really going on?
What better job can a market analyst have than checking component suppliers (as if they will divulge the truth, and nothing but the truth, totally disguised as facts). That’s a gig to have because anyone checking the suppliers knows they make up numbers so you can make them up, too.
Cage Chao and Steve Shen came up with this iPhone supply chain gem:
Component orders for iPhone devices will come 15-30% less than expected for the first quarter due mostly to seasonal factors, but some sources argued that the slower-than-expected sales of iPhone 8 and iPhone 8 Plus have dragged down the momentum for the iPhone X.
Uh, OK. “Sources argued.” Uh huh. So the aforementioned seasonal adjustments in supply component orders is in effect, as it always is, but those slower-than-expected iPhone 8 sales will drag down iPhone X’s momentum?
There is no way possible for anyone to know that, including Apple.
Some suppliers reportedly plan to temporarily halt their production in February as the low order visibility from Apple and the week-long Lunar New Year holidays will drastically bring down their capacity utilization rates
Said the sources. Uh huh. Sure they did.
Maybe we should look at this argument a different way. First, only Apple knows which suppliers it uses and how many components it orders. Second, only Apple knows how many iPhones are sold in which models. Apple may sell 250-million iPhones in 12 months, but only Apple knows how many of those will be iPhone SE, iPhone 6s and 6s Plus, iPhone 7s and 7s Plus, iPhone 8 and 8 Plus, and, the much advertised iPhone X.
Luke Dormehl picked up on the argument and after wandering through the roadside brush for a day, and came up with this conclusion.
Apple managed to get iPhone X supply to match up with demand much sooner than most were expecting — although there has been disagreement over whether this is a case of Apple’s operations wizardry or of weaker-than-expected demand.
Advertising and lower prices often spur demand, and since Apple has not reduced the iPhone X’s retail price, but has been running far more iPhone X television commercials than in previous years (yes, I counted), something is up, but it has little to do with supply line checks, component suppliers, or Apple’s broadened iPhone line.
Ultimately, we’ll find out for sure on February 1, when Apple hosts a conference call to discuss this very quarter.
There you go. As a publicly traded company Apple, as do some competitors and similar technology companies, predicts financial performance about a quarter in advance. Such companies also must divulge ahead of announcing financial results any issues or situations which would negatively impact those expected results.
What has Apple said so far?
Crickets. And the company predicted the best financial quarter in history and those beans might take awhile to count.