Astonishing distortion?
If you follow Apple, the majority of analyst pronouncements and stories cobbled therefrom have the appearance of stock manipulation. Anyone with a brain who pays attention can see absurdities in this story hinted at by the "cutback" headline against an increased sales forecasts. Method: <Fabricate positive old speculation; fabricate negative new speculation; conflate and infer negative trend>
Sleepy Consulting's report: "Multiple channel checks suggest 8.2-9.4M iPhone 3G's sold in CY2008Q3 (we'll know in 2 weeks), and probable running of production at full capacity for the remainder of the year. With this Apple has comfortably overtaken RIM's 6.1M Blackberries in its just ended quarter, placing Apple in second place in worldwide smartphone handset unit sales behind Nokia. We expect Apple to sell 20-25Million iPhones in CY2008, including original iPhones."
Let's see which is closer in January: 13M (PCS) or 22M (Sleepy).
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1. Who mentioned any evidence from Apple of 18M planned production before now? Answer: no-one, but initial 3G production appeared to be 600K/week. Running that flat out suggests 15M in 2008. This has been expressed as 15-18M, revised for this story to 18M, with no evidence. To get to 18M, reverse out the one month production start delay (caused by Infineon?) and treat the temporary ramp-up in production to meet initial demand as being a planned increase in total production, despite the absence of new component orders from Apple.
2. PCS apparently says Apple will sell 11M 3G's in 2008. Sales include 3rd party channel inventory, so Apple is planning 2-3 months channel inventory unsold at year end. Apple has never, since beige box disaster days, planned to hold more than 3-4 weeks channel inventory at any time, and regularly executes "instant" worldwide product transitions with near zero channel inventory at changeover. Apple channel inventory management is the best in the world.
3. Most analysts including PCS say 4-6M sold in the just-ended quarter. Apparently PCS thinks Apple will now build 3 times as many phones as they need in 2008Q4. 15-18M would exactly match the run rate and 8-9M 2008Q3 sales. So why do analysts say 4.5-6 million? -to create up and down stories to release as required. Expect iPhone sales upgrades "on new data" the day before quarterly earnings, so clients who've just bought AAPL on the false dip can safely sell on a false bump before earnings. (sorry, cynicism got the better of me there - how could that be true).
4. The unspoken story is gross margins. Nokia may sell 3 times as many units, but their total smart phone gross margin is probably about the same Apple's (i.e. Apple makes 3 times as much on each phone). Add in Apple's music and application gross margins from iPhone users, and Apple's probably overtaken Nokia where it counts in a single quarter of selling iPhone 3G. That's a single handset, with plenty of "important features" missing. And iPhone isn't even selling yet in Nokia's biggest market (China).
What happens if/when Apple settled for Nokia's gross margins and is in China?
Biting the hand that feeds IT
