By Jim Karpen on Tue, 01/15/2013
Apple's stock is down again today, falling below 500, and it's dragging the whole stock market down with it. Much of the decline can be attributed to the Wall Street Journal's report citing unnamed sources that demand for the iPhone 5 is weak. Yet analysts are saying, after checking with their sources in the supply chain, that demand continues to be robust. We'll likely find out the real truth next week when Apple reports their December quarter results and tells what they expect for the March quarter. In the meantime, it doesn't help sales that bloggers like me keep passing along rumors of the Next iPhone. According to AppleInsider, Apple is currently testing two prototypes of future iPhones and will begin preliminary builds of the iPhone 5S in March, suggesting that it will come to market in a June/July time frame. No doubt some people thinking of upgrading to the iPhone 5 will now, on the basis of these rumors, consider waiting until the Next Model.
In addition, the market analyst who's the source for AppleInsider's information is also predicting that the iPhone 6 will have a 4.8-inch screen.
Meanwhile, rumors of a low-cost, entry-level iPhone continue. DigiTimes, which gets its info from sources in Apple's supply chain, and has a spotty record for accuracy, is saying that a low-cost iPhone is in the works and that it may have a plastic chassis. The site also notes there are rumors of a chassis that's both plastic and metal — and that it would even have a see-through design that would reveal the internal metal parts (which AppleInsider says is unlikely). The site says that the device could show up in the second half of this year.
I have to admit that it was so unusual that Apple responded to last week's rumors of a low-cost iPhone, since Apple has always ignored rumors in the past, that you wonder if maybe there's something to it.
All the while Apple's stock inexplicably goes down. The Wall Street Journal based its assertion regarding weak demand on a statement by the maker of displays for the iPhone 5, who reported that Apple had halved the number they originally ordered for the March quarter. But many have pointed out that there could be other reasons for this. One would be that now that the manufacturer has gotten better at making these technically difficult displays, there are fewer defective units, meaning that yield rates have improved. This would naturally lead Apple to reduce their order. Another reason would be that Apple is adding another supplier of the displays and is, therefore, reducing its order with the original supplier. Apple is increasingly diversifying production in this manner, in part to not be so reliant on individual companies.
Another reason would be that a new model will be appearing earlier than expected — which would be the May-July period that some sources are suggesting. Naturally Apple would have to gradually begin to reduce production of the current model. You can read more on Seeking Alpha.
And finally, BGR says the math of the Wall Street Journal report just doesn't add up.
I predict that the WSJ got it wrong, that Apple will report a spectular quarter, and that their guidance for the March quarter will also be encouraging to investors.