Photo: M. Woodruff/Business Insider
Wall Street’s estimates for iPhone shipments this quarter may be completely overblown.Apple has slashed the production of new iPhones by 20% to 25% from the 35.1 million units shipped last quarter, according to a note released Tuesday from Sterne Agee analyst Shaw Wu, based on supplier checks.
The drop in production isn’t due to a lack of demand, Wu says, but rather because Apple is preparing to launch the next iPhone model in the third quarter of this year.
“From our understanding, the reason for the reduction is not demand related but rather due to the upcoming 6th generation iPhone refresh likely in the September-October time frame” he said in the note. “It appears that AAPL is opting to be conservative with its suppliers to factor in a potential 2-quarter pause ahead of the refresh and also to manage inventory.”
As a result of this drop in production, Wu predicts that Apple will ship somewhere between 26 and 28 million iPhones this quarter, well below Wall Street’s consensus estimate of between 30 million and 31 million iPhones.