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The WSJ reports Apple has cut orders for all three newly launched iPhone models due to demand falling below expectations.

'Forecasts have been especially problematic in the case of the iPhone XR. Around late October, Apple slashed its production plan by up to a third of the approximately 70 million units it had asked some suppliers to produce between September and February, people familiar with the matter said.'

'And in the past week, Apple told several suppliers that it cut its production plan again for the iPhone XR'
https://www.wsj.com/articles/apple-suppliers-suffer-as-it-st...

Looks like they ducked the 'unit sales' questions just in time -- prescient, much?
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MP Home Fool
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The WSJ reports Apple has cut orders for all three newly launched iPhone models due to demand falling below expectations.

'Forecasts have been especially problematic in the case of the iPhone XR. Around late October, Apple slashed its production plan by up to a third of the approximately 70 million units it had asked some suppliers to produce between September and February, people familiar with the matter said.'



Was I really the only one expecting this? iPhone X was a HIT! Do you really think everyone that bought a new iPhone X outright wants to buy another already? Also, although Apple has it's "New iPhone Every Year" subscription model, it isn't that heavily in play yet. Add in that they released THREE new iPhones; iPhone Xr, iPhone Xs, iPhone Xs Max, and that is definitely going to cut into the number of unit sales.

Kathleen
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Was I really the only one expecting this?

Well, it seems that Apple did not expect this, given that they’re the ones said to slash orders. If their internal forecasts are suspect, the broader market may be justified in distrusting their own future guidance as well — despite what another poster here said in another thread.

-awlabrador
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The WSJ reports Apple has cut orders for all three newly launched iPhone models due to demand falling below expectations.

The WSJ reported the same sort of thing in previous years too. There was never any truth to it. Until Apple says it made less money because they didn't sell many phones, I'm going to reserve judgment. My guess is that just as in previous years, it's not true.

Of course all sorts of credulous fools are believing this, so the stock is tanking. It did this in previous years too. Truly remarkable that Charlie Brown investors continue to believe Lucy end up flat on their backs.

Meanwhile, AAPL is on sale in a truly excellent buying opportunity.

-IGU-
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At least for a dominantly profitable brand like Apple, it's a long road from cutting over optimistic orders to actually losing money. By which time, it's too late.

There's pricing power, and there's pricing hubris. Apple thinks it can't do anything wrong on pricing, having got away with it for so long, so it's pushing the envelope on the value/price equation for all it's worth.

It's called margin retreat - sacrificing volume share for profitability (as opposed to sustainable profits driven by a healthy mix of volume and margin)

Given that, growth in services will need to be up to the task to not just offset volume erosion (and consequent erosion of the user base for those services) but also amp up enough to justify its near 10 year high valuation

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MP Home Fool
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The WSJ reported the same sort of thing in previous years too. There was never any truth to it. Until Apple says it made less money because they didn't sell many phones, I'm going to reserve judgment. My guess is that just as in previous years, it's not true.

Of course all sorts of credulous fools are believing this, so the stock is tanking. It did this in previous years too. Truly remarkable that Charlie Brown investors continue to believe Lucy end up flat on their backs.

Meanwhile, AAPL is on sale in a truly excellent buying opportunity.



Couldn't agree more.

On the one hand, you have Apple's official guidance, which proves too conservative the overwhelming majority of quarters. On the other, you have a perpetual parade of doomsday narratives built around supply chain rumors, which almost never prove true.

Yet this is wonderful for those who truly understand Apple, and who can let their intellect overrule their emotions when this nonsense flies...for this allows one to get AAPL on great sales every few years. And now with Apple in perpetual heavy-buyback mode, these intermittent dips into super cheap prices will cause the buybacks to be that much more accretive to long-term value.
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Given that, growth in services will need to be up to the task to not just offset volume erosion (and consequent erosion of the user base for those services) but also amp up enough to justify its near 10 year high valuation


Right now it's trading at 13X consensus current-year earnings. With about 1/6 of that share price represented by net cash. Doesn't seem like Apple has a very high hurdle to clear to make that valuation seem low...just a quarter or two for everyone to realize all the doom-and-gloom was ridiculous...again.



There's pricing power, and there's pricing hubris. Apple thinks it can't do anything wrong on pricing


Well, seems to me what the data demonstrate is that Apple had untapped earning power: They raised the prices in a major way (for iPhone X), and units sold were essentially flat. And this model-year, so far, units appear to be basically flat...whereas they appear to be declining for the rest of the high-end market. So, no data to suggest they over-shot on pricing. And no data to suggest they would have sold more units if they had left pricing unchanged. Given what Apple has accomplished over the years, I think they deserve the benefit of the doubt; Mr. Market seems to think that all they deserve is doubt. Our wallets will all find out soon enough.
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