iPhone 5 Orders: Yesterday, we published a story – Has Apple Inc. Cut iPhone Component Orders – discussing the possibility that Apple Inc. (NASDAQ:AAPL)’s smartphone is dealing with weaker than expected demand.
While it is safe to say that the news surrounding component orders is confusing, not everybody is ready to hit the panic button. In fact, Sterne Agee analyst Shaw Wu does not see any reasons to get excited. He believes that consumer demand for the iPhone 5 remains strong.
In a note to investors as reported by AppleInsider, Wu remains confident that demand for the smartphone phone “remains robust.”
The article goes on to say:
“Wu joins a growing chorus of market watchers who believe any order cuts for iPhone 5 components are not representative of consumer interest. Mark Moskowitz of J.P. Morgan said the reports are just “more noise” that will prompt investors to overreact, while Maynard Um of Wells Fargo said any cuts are actually “not news.”
So what does Wu think about all this? Although he may believe that demand for the iPhone 5 remains strong, it is hard to hide from the fact that component orders have been cut.
Here is a breakdown from the same AppleInsider piece:
“For his part, Wu believes that reduced orders for iPhone 5 components are a result of improved yields, which has required Apple to place fewer orders for components. In addition, he said supplier shift changes made by Apple have contributed to the cuts.”
In other words, he doesn’t believe for a minute that reduced orders for components is related to weaker than expected demand.
AppleInsider also takes a closer look at what Wu thinks about Apple Inc. (NASDA:AAPL) in the near future:
“With so much attention on Apple’s future, Wu believes Apple’s guidance for its March quarter will be the “trickiest” that he can remember.”
“He expects Apple will give “vintage conservative” guidance, as it has traditionally done. But while in the past investors would brush aside Apple’s soft guidance, this time some may view the guidance as a sign of weak demand.”
“As for Apple’s recently concluded December quarter, Wu expects iPhone sales and gross margins will likely surprise investors to the upside. His forecast calls for sales of 47.5 million iPhones, above market consensus of 46 million to 47 million, with gross margin of 38.7 percent, versus expectations of 38.3 percent.”
Do you agree with Wu that that all is well in the world of the iPhone 5? Or are you still leaning towards an issue with demand?
Check back here for more updates on iPhone 5 Orders.
DISCLOSURE: I have no positions in any stock mentioned.
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