If the WSJ Is Wrong About 'Weak' iPhone 5 Demand, Will It Apologize to Apple?
Written by: Rocco Pendola
Tickers in this article: AAPL FB
NEW YORK (TheStreet) -- So, late Sunday night, as I was sipping a Saranac Big Moose Ale before bed, The Wall Street Journal broke what we, for better or worse, call news. Please, by all means, don't give TheStreet credit for the "scoop." In fact, speaking for myself, please allow me to distance myself from the WSJ report that Apple cut iPhone 5 component orders because of "weaker-than-expected" January-March quarter demand.
The first thing I did after seeing the news was get in touch with TheStreet's tech geek and Apple(AAPL) authority Chris Ciaccia, who is headed to the San Francisco Bay area for Tuesday's big Facebook (FB) announcement, for his reaction:
After re-reading The Wall Street Journal article on iPhone demand, Apple cutting parts orders is the likely course of action, as the source (perhaps a Japanese parts supplier) is talking about the January to March quarter. It's likely the parts supplier (whoever it is), is seeing cuts in the January to March quarter because Apple's biggest quarter is the holiday quarter, its fiscal first quarter.
The source indicates Apple notified suppliers last month of the cuts, but unless demand just slowed to a halt, this doesn't make sense. Apple reports fiscal first-quarter earnings on Jan. 23, and we'll find out how many iPhones were sold in the holiday quarter, but one would expect that given the robust demand for the phone after it was released, demand is likely to slow from the holiday quarter. This is expected, as Apple sells more iPhones during the holiday quarter than any other time; this is a normal course of business, and likely not a sign of customer weakness.
Unless the WSJ is talking to Apple directly (and that seems highly dubious given the author does not have a track record for it), this seems like pure speculation at best.