In the run up to Apple’s earnings, the stock was hammered on reports of iPhone supply chain gyrations.The reports slowly built from early December in DigiTimes to analyst reports in mid-December to finally hitting the Wall Street Journal in January.
The WSJ’s report was the most damaging because it gave the previous reports more authority. And, worse, the Journal said the cuts were because of weak iPhone demand. The WSJ also claimed Apple halved its iPhone screen orders.
The report sent Apple’s stock into a tailspin.
Apple didn’t comment on the record about the Journal’s report. It’s unclear if Apple even had a chance, since the Journal’s story says, “Apple representatives weren’t immediately available for comment.”
Presumably, Apple did have a chance to comment at some point on the story and declined to comment on the record. It may have spoken off the record, trying to convince the Journal it was wrong, but that doesn’t do much.
Apple should have gone on the record and made a comment because it actually had a very convincing explanation for why you shouldn’t trust what the Journal was reporting.
On last night’s earnings report, Tim Cook addresses the supply chain cuts by saying:
“I would suggest it’s good to question the accuracy of any kind of rumour about build plans, and also stress that even if a particular data point were factual, it would be impossible to accurately interpret the data point as to what it meant for our overall business, because the supply chain is very complex and we obviously have multiple sources for things, yields might vary, supplier performance can vary, the beginning inventory positions can vary, I mean, there’s just an ordinate long list of things that would make any single data point not a great proxy for what’s going on.”
This is a perfectly reasonable explanation for what happened. Perhaps Apple pulled orders from certain suppliers because it was unhappy with their performance and increased orders with other suppliers.
If Cook, or one of his PR people had explained this to the Journal on the record, then Apple could have avoided some negativity last week. (And for people wondering, yes, Apple can make comments in the period before earnings.)
This is one of the great deficiencies of Cook versus Steve Jobs. Jobs was a master of influencing media. He would call up reporters and convince them why they were wrong. It’s unclear if Cook is doing the same, or could do the same even if he tried.
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