Another strange report from Asia about weakness in Apple’s supply chain.Last month, JP Morgan startled everyone by reporting that Apple had cut Q4 orders for iPads by 25%, citing sources in Apple’s Asia supply chain.
This led to a violent battle among analysts over whether the report was accurate or meaningful and whether Apple investors should be concerned. JP Morgan’s own Apple analyst was among those who said to ignore the report because Apple was totally fine.
But now we get another report of weakness from Apple’s Asia suppliers, this time pertaining to the iPhone.
According to DigiTimes, PCB (printed circuit board) manufacturers have seen Q4 orders cut by 15%, with specific orders for smartphone parts also being cut. Apple was specifically mentioned, with sources saying that Apple cited weak US and Europe economies:
The order slump was anticipated also in part due to fewer-than-expected orders from Apple, the sources indicated. Suppliers to Apple were informed that orders for the fourth quarter have been revised downward because of the sluggish US and Europe economies, the sources revealed.
As with the prior iPad report, even if this information is accurate, it doesn’t mean Apple will post disappointing iPhone sales in Q4. Apple’s orders, based on its own internal expectations, may have been much higher than external analysts have been expecting. So it could cut these orders without disappointing anyone.
But still, it’s hard to view this as good news.
(On the positive news side, Apple announced good pre-orders for the iPhone 4S–1 million in 24 hours. This compares to 600,000 for the iPhone 4. This number does not seem spectacular–the installed base and carrier base is much larger than last time, but it certainly seems solid.)