The New York Times also chimes in on the reduced orders, and they have numbers which seem more realistic. “Apple does appear to be cutting back on orders for its latest iPhone from its manufacturing partners, as Nikkei of Japan and The Wall Street Journal reported earlier. Paul Semenza, an analyst at NPD DisplaySearch, a research firm that follows the display market, said that for January, Apple had expected to order 19 million displays for the iPhone 5 but cut the order to 11 million to 14 million. Mr. Semenza said these numbers came from sources in the supply chain, the companies that make components for Apple products.” Some suggest this is stock manipulation, and while that is an exciting story to be sure, would respected and well-informed newspapers like The Wall Street Journal and The New York Times participate in something like that? Somehow, I highly doubt it. A far more logical explanation, as NYT details, is that the iPhone simply isn’t doing overly well outside of the US.
I’m sure the anti-Apple legions will be out with their “Apple is done” obituary posts, but really, this news is a bit odd. Just a couple weeks ago, Apple’s website showed a week delay in shipping for various models of the iPhone 5. Some carrier stores here are just now able to get enough in to satisfy the demand from customers who have not been able to buy one since they were launched and throughout the Christmas buying season.
I lean more towards the idea that Apple is moving to a quicker refresh cycle for some of their products, as evidenced by the iPad 4th-gen, plus the general downturn in consumer spending post-Christmas. Like all these other writers, bloggers, etc, I have absolutely nothing concrete to make this prediction on, but it certainly seems to make more sense than to say that demand has instantaneously vanished for the product in the 2 weeks after Christmas.
I am sure the Apple fanboys legion will be out with OSAlert ( and especially Thom) only publish Apple negative news
.
My take is that in entering the chinese market, Apple might have been forced to buy chinese part (my 2 cents).
Edited 2013-01-15 10:23 UTC
Don’t let the facts hit you on the way out.
http://www.osnews.com/topics/14
Well, are you American? That could certainly explain a few things. Apple continues to do very well in the US, so it makes sense stocks are low there. However, I just now checked the Apple website in The Netherlands, Germany, and France – and *all models are in stock*. Even in the UK, traditionally a strong iPhone market in Europe, *all models are in stock*.
You can check this for yourself at Apple.nl, Apple.de, Apple.fr, and Apple.co.uk.
This seems to support the idea that while the US is still iPhone crazy, Europe appears to be shifting its attention elsewhere. This is supported by marketshare figures in at least The Netherlands, where Apple hovers between 10-15%, and Android eats up 75% – even after the introduction of the iPhone 5. Faltering iPhone sales in Europe could easily account for a reduction in parts orders.
EDIT: they’re in stock in the US too. Has a new iPhone ever been in stock the world over this soon after launch?
Edited 2013-01-15 10:30 UTC
you might be correct Thom but my take on this is that people are just being a tad more careful with their Dollars, Euros, Pounds etc these days.
Most people I know who have a smartphone aren’t looking to replace their existing model anytime soon.
I had to get a new phone in December as upgrading my HTC Sensation to Cyanogenmod bricked it totally. I now have a non smart Nokia (symbian) that cost me less that ^Alb75.00. That will do me for the forseeable future.
If my company got its act together and gave me the iPhone it has been promising for the past 6 months I wouldn’t say no but at the moment, I don’t really need a smart phone but there again, I’m a technical luddite/grumpy old man so who am I to judge.
What is that? Pretty much all Symbian handsets were described as smartphones…
I think I know why, the phone has been sold here in the UK at a premium where the S3 can be bought on a ^Alb25 a month contract with the phone free the iPhone 5 is on the most expensive contracts with a heavy up front fee as well, which on all calculations end up costing at least twice the actual price of the iPhone off contract. In fact a few of my friends have bought the iphone 5 off of contract and then signed up to giffgaff a mobile network here which charges 12.50 a month and provides unlimited data.
To put simply the Mobile Network Operators are to be blamed here, they have gotten incredibly greedy and expecting the iPhone 5 to just sell have massively overpriced it on really terrible contracts. This applies here in the UK, I know a lot of people have not upgraded because of this very reason and are still running their old iPhones some are looking to move to Android.
The other reason is quite simply that the iPhone 5 is very boring, its a bit bigger than the iPhone 4 but it looks very similar, so why bother upgrading thats the other reason. I am sure interface wise and hardware wise the next iteration of the iPhone will be very different at least I hope for Apples sake it will be.
I would even add one more point.
iPhone 5 = new connector.
For all those already owning an iPhone4 that means they have to buy (again) a lot of stuff.
Why would they do that knowing the iPhone5 is just a big iPhone4??
Could be the iPhone 5 is not as good of a phone as the 4S it replaced. Wifi issues and 3G reception issues. Wifi supposedly fixed with the iPhone 5/iPad Mini only update, but my wife’s 5 consistently gets worse reception than my 4. I can text away and her phone says “no service” or is extremely slow. Supposedly the 3G issues are fixed in iOS 6.1 so we will see. But I’m taking a wait and see attitude on upgrading my line. I don’t really need to upgrade and poorer reception makes the “want” factor go away completely.
Get an adapter.
http://store.apple.com/us/product/MD823ZM/A/lightning-to-30-pin-ada…
Done.
>> Get an adapter.
Also working on docking stations where the phone must be plugged on???
Also for Hi-Fi with docking station?
Also for cars with docking station?
I understand that most “fans” of apple solutions will buy a new Hi-Fi to go with their phone… But you must be a hard core fanatic to buy a new car to fit to your phone
Edited 2013-01-16 07:43 UTC
No. To put it simply – in US the operators are free to charge you stupid fees on your devices and then charge you your usual $100 per device. In EU that practice “does not fly”, so the operators are done supporting Apple with their cash and are letting the customer pay the full actual price.* Why? Because when you buy an iPhone you are not likely to be proving additional revenues for the operator to cover for the subsidy(considering OTT, premium SMS messages and similar)
*- iPhone5 off contract is about ^a'not750 and it’s subsidy constitutes ^a'not10-^a'not15 in your monthly bill. That is a considerable hole between the price the operator pays to Apple and you pay back.(I suppose Apple only gets ^a'not500 when sold in bulk to operators)
apples sells unlocked no-subsidy iphone5’s direct to US consumers for a bit less than 500 euros (16GB) or 575 euros (32GB). carriers must get them for substantially less. but apple certainly is selling them for more than android or windows phones, and without subsidies price-conscious consumers will choose other options. even in the us, other brands are doing increasingly well.
When calculating European prices from US prices, always keep in mind to include sales tax, as that’s what people here are used to seeing. The 500/575 figures is thus quite misleading. Most countries here have around 20% sales tax, so that’ll be 600 and 690 Euros.
Those prices are still far too low. The 16GB is ^a'not670, the 32GB is ^a'not780.
Companies don’t pay VAT(sales tax).
They have to pay import duties for their devices, different fees for importing a cellular device and since they are have to have a minimal of 2 years warranty their price is substantially higher in bulk when sold in EU, compared to US.
I can tell you first hand that except for the 16GB versions, the Romanian operators still are out of stock and have been like this since mid december. Milage varies from country to country. Yes, they made sure that the traditional launch countries have adequate stock, but the second batch of countries are still out of stock. I’ve checked with Vodafone, Orange and Cosmote (T-Mobile) as recently as today.
They expect the stocks to go to normal from from mid February.
Furthermore, 75% android doesn’t mean much in reality. Do the math another way: Apple is a quarter, Nokia/Backberry are irrelevant and 75% represents everyone else. So in a battle of Apple vs. everyone else they aren’t doing that bad. iPhone is in the premium segment where most droids don’t actually compete (except for select terminals from Samsung). In the premium segment, Apple is clearly the market leader.
I don’t think Apple is or should be going after the non-premium segments as it would kill their margins or make crappy products. There are already enough manufacturers that are more than competent in low-margin, high-volume, 6 month technical and OS support markets.
I’ve also observed that all my higher income friends (research, finance, etc.) in Germany, France, Romania, UK and the Netherlands use Macs and iPhones. I actually have only one friend doing his PhD right now that refuses to get an iPhone for philosophical reasons. Obviously, milage may vary, but this is my experience, neither good nor bad, just an experience.
All these rumours and all this speculation are fun (especially if you want to manipulate the stock price) but the consensus amongst serious analysts is for between 45 and 55 million iPhones sold in the holiday quarter which would be another big step up in sales for Apple. It looks like Apple will sell at least 250 million iOS devices in 2013 which will probably exceed Windows licenses sold in the same period. Shame Steve Jobs isn’t alive to see that.
Here is some interesting data from Asymco on the ambitious scale of the iPhone 5 rollout.
http://www.asymco.com/2013/01/15/measuring-iphone-5-vs-iphone-4s-av…
Bottom line: The iPhone 5 was 30% more available than the iPhone 4S.
As far as the rumours about cancelled supply orders go here is what Asymco has to say:
Looking forward to the release of the actual data by Apple next week. I wish other companies such as Amazon, Samsung and Google were as open with the data about their mobile sales as Apple but I don’t expect much to change on that front.
Google releases detailed Android data regularly – much more so than Apple, in fact.
They don’t say how many Nexus devices have been sold, they don’t say how much Android is costing them, they don’t say say how much they are earning from Android, they don’t say say what the split of their mobile revenue is between iOS and Android.
Here is a technical but compelling analysis of the current market play that is in motion around Apple stock, a lot of money is at stake.
http://seekingalpha.com/article/1002601-buy-apple-on-january-18
And Apple don’t release the share of different iPhone’s in their total count of devices sold. And a lot of other data.
You are asking for data at a level of detail that neither your beloved company nor Google ever provide, for many valid reasons.
Here’s the short version – It’s not relevant.
Specially since you’re definitely not an investor of Google.
I didn’t say it was relevant I just said I would like to see Google release that data. I think that data is of much wider interest than merely those who invest in Google. It’s certainly of interest to those interested in how Google’s Android initiative is faring as a Google business strategy.
I remain of the opinion that Android is a failure for Google in terms of Google’s strategic business reasons for undertaking the project in the first place and that it remains a net cost centre rather than a profit centre for Google.
Again, that information is not relevant to anyone who has no financial stakes in Google. And would likely only hurt members of OHA.
Being a “cost centre” and “strategic business failure” are not synonyms and have little correlation between them.
Anyone who has done any amount of MBA will know what Android is for Google.
Purely anecdotal, but my wife had a 4S and upgraded to a 5…
Yeah, its faster, but it was already pretty fast. Yeah, the screen is taller, but she doesn’t really care. Its thinner, but it was already pretty thin. She actually liked the old design better from a purely cosmetic point of view, and switching to lightning means all her accessories are now a pita.
All in all, she tells her friends not to bother. She is probably just above your average phone user – she doesn’t give a shit about buzz or technology or having the latest gadget, but she does use the features of the phone heavily and has always appreciated the updates in past models.
I think that is probably the prevailing attitude toward the 5 once you get out of the technocrati circles. Its really the first iPhone model without a killer reason to upgrade. Its not that it is bad or anything, but it isn’t “omg I have to have that” either.
In short I think word of mouth dampened the initial demand curve a bit.
ps. I forgot about LTE. In the US at least, if you are an AT&T customer it only matters if you actually have LTE in your area. The VAST majority of users don’t, so it is of no value to them.
Edited 2013-01-15 21:45 UTC
It seems there usually are such “good enough” points with the progress of technology …and what happened with Macs and PCs.
Wow you are very scientific with the research that the demand for the iPhone 5 is not there yet just by checking the Apple Stores in the net.
Have you consider going into the fortune telling business. It might suit you as better profession.
Just because you said so that NYT, WSJ are not into the manipulation business so they wouldn’t and aren’t. Remember one thing these people are also in the hits business of getting as much hits as they can and what better than the name of Apple to get the hits.
As per WSJ 63 million order can this be real for a weak 2nd quarter?
Go figure.
Thank you. There is no way that Apple would even dream of selling 65m iPhone from January to March. Their best ever quarter, that includes a holiday season, saw them sell 37m phones. For them to best that, in an after holiday quarter and almost double it would be unheard of. And Apple are anything but stupid.
In fact, Apple gave guidance for Q1 2013 (their financial year, not the calendar year) and they estimated revenue at $52bn. 65m iPhones would represent a revenue of approximately $43bn. To put that in perspective, that would make the iPhone the largest company of earth.
If we were forecasting revenue of the iPad of about $10bn (same as Q1 2012), music $2bn, peripherals $1bn, iPod $2.0bn (a little less probably), desktops $2bn, portables $4.5bn.
So, adding all the numbers together, one would have to believe Apple believed they were on for record revenues on the order of $64.5bn+.
The 65m number is absolutely ridiculous. Heck, even Samsung isn’t shipping that many smartphones in a quarter yet!
They tend to beat their own guidances, BTW. But I wouldn’t be surprised of a 50mil iPhones sold.
You fanbois really don’t bother reading the whole thing, aren’t you?
(Emphasis mine)
I read the story and it seems to cite the proposed explanations to analysts often rather than explanations that the NYTs or Chen actually hold to, and it actually posits about 3 or 4 reasons with little certainty that one is correct or even likely or more so than any other.
I live in Spain, where people are smartphone crazy, and every day I have a 1h train ride to work (and then again back home). But I have not seen an iPhone 5 in the train yet. Ipads, iPhone 4x and 3, and iPods of all varieties, yes. I see Samsung Galaxies of all sorts, no-name Android phones of all varieties, and Kindles and Sonies and all sort of e-readers. There are tons of PSPs, NDSs and 3DS, and tablets of all prizes and sizes. Even Blackberries! And laptops, mainly to watch movies, but sometimes also for work.
But no iPhone 5 sightings just yet. It is VERY strange, even in our current bleak dimension of horror and dispair.
Edited 2013-01-15 14:03 UTC
I’ve observed, both in my immediate circle of friends as well as others where I live, that many people these days are quite happy to get an iPhone and pay much less for the 4S or even the 4. Not only is the 4S substantially cheaper than the 5 (at least with AT&T) but it’s quite capable of running everything the 5 does and retains the old dock connector. Another poster had this right: lots of people own dock accessories and are not willing to pay up front for not only an iPhone 5 but also for all their accessories, assuming they even can (many accessories simply are not available for the 5 yet). Add to this that the 4S came out one year before that, and many people upgraded then. The 5 simply offers no real benefits for those already using a 4S, many of whom wouldn’t be eligible for upgrades anyway without paying the full cost of the iPhone. I fall into this category myself, as I have a 4S and am perfectly happy with it. The 5 offers me no compelling reason to upgrade and indeed has a few factors going against it right now. The only thing the 5 would offer me that the 4S does not is connectivity to 5 ghz wi-fi networks and, while that’d be really nice for me at home, it’s not worth the upgrade cost for a device that serves mostly as my on-the-go assistant. iPhones for me have always lasted a long time, so they’ll probably not see an upgrade from me for another two years at least unless they come out with a radically different iteration of the device that I think would boost its usefulness or my on-the-go productivity. Add to this the fact that Apple generally supports older devices for a decent length of time, unlike some Android OEMs I could mention (ahem, Samsung? HTC?) and the lower demand for the 5 makes perfect sense to me. It’s not so good for Apple from a shareholder’s perspective, but it’s not at all surprising for anyone who follows the smartphone market.
Like others have mentioned, upgrading from an iPhone 4 or 4s to the iPhone 5 just doesn’t make much sense, especially in this tight economy. A new connector that will force you to re-purchase many accessories and that adapter, which you have to buy by the way, won’t allow for the phone to fit properly in all docks. The unilaterally-stretched screen brought app compatibility issues, while still left you with the same cramped keyboard when using the phone in portrait mode. So yes, even those with an iPhone 3Gs are still better off upgrading to an iPhone 4s than to an iPhone 5.
Users with higher end Android devices like the Galaxy S3 or the One X, don’t have much incentive to switch to an iPhone 5 either. And that’s not even discussing the build quality issues the iPhone 5 has had that leaves it following the original iPhone 4 and its antennagate vying for the title of worst built iPhone.
Unless you have to have LTE and you can actually get that in your country in iPhone-compatible bands, there’s little incentive to get an iPhone 5. Getting an iPhone 5 won’t even make Apple Maps less inaccurate than when used on an iPhone 4s.
Apple sold very well to businesses. It seems now Android is gaining acceptance in that area as well.
A buddy of mine 2 years ago was issued an ipad (and iphone) for his work. That was just how it was. Now they are given an option, Apple OR Samsung (android). I suspect that this is happening more than just at his workplace.
I just means more competition in general is all.
Other than that single anecdote do you any more objective or substantial data or evidence to support that claim?
Just interested.
It’s very hard to have statistics about this kind of thing.
You will certainly consider it as another anecdote… But statistics on our mail servers shows the same (All mail accounts added together; that makes a few thousands users).
Since 2 years Android gains dominance and that speeded up drastically the last 10 month.
As always, sorry for my english
Edit: I forgot to mention that all these accounts are corporate accounts
Edited 2013-01-15 21:08 UTC
Alternativel there is this
http://www.networkworld.com/news/2012/051012-android-ios-259183.htm…
Android was 47% at some point?!?!?! I’m sorry, that dataset is not representative of anything but how many times Zscaler clients’ users access files from a web server(“A transaction, as defined by Zscaler ThreatlabZ senior security researcher Mike Geide, occurs every time a file is accessed from a web server.”)
So – unique count? Nope.
I think the NYT did kind of a crappy job with the story. Its focusing on Apple’s ability to compete, but it doesn’t seem to have a good grasp on who apple would be competing with on the lower end.
Samsung isn’t not a competitor*, but there are many, many more. The Nexus 4, is a huge sea change of competition, or will be if they ever get them in quantity. There is absolutely zero reason to go with anything else, imho. Plus there are a gazillion KIRF Chinese phones, and Nokia Ashas out there as well.
* Double negative included intentionally to try to encourage its proper use in English. Triple Negative left for a future exercise.
You are self-contradictory with every clause you utter. This comment is worthless.
There’s no reason to get anything but a Nexus 4 — besides the fact that you can’t get it.
Even though the Nexus 4 is the only phone you need, there’s gazillion more phones of a completely different kind.
I should buy the cheapest crap Nokia makes because there’s gazillion of them, even though there’s actually fewer of them combined than a single model of Samsung or Apple phone.
I think you completely missed the first sentence of that paragraph. The topic sentence. All other sentences support that sentence to form and support a cohesive thesis.
Sometimes I do ramble on and half of my ideas make it to the post, but I think it makes sense as is. It is both contradictory, expressive and expansively compact. Surely,a brilliant post to behold. Yes boys and girls this post will live on, sure to be referenced in many a literary and scientific journal bringing peace to the everlasting war amongst scientists both social and anti-social. Or its just a hastily constructed post, only …time -will (shatner-esque pause here) tell (hushed silence descends upon all).
Living here in China I see the trends pretty early, one phrase I have heard often in regards to iPhone is ‘tubaozi’ which means out of style.