A new report from Jefferies analyst Peter Misek claims that Apple Inc. (NASDAQ:AAPL) will cut down iPhone manufacturing orders for the rest of 2013.
Changed Plans for Apple
Misek claimed in a note to investors that th iPhone maker has altered its manufacturing plans. The company will cut down iPhone orders for the third quarter from 40 million-45 million to 25 million-30 million. For the fourth quarter, Apple Inc. (NASDAQ:AAPL) will cut the order to 50 million-55 million from 60 million-65 million.
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Reasons for the Cut
The parameters for the analysis undertaken by Misek are inventory checks and data collected from a few key Apple Inc. (NASDAQ:AAPL) vendors and suppliers. Misek did not mention inventory levels outside U.K., but he holds the view that this is a global problem for Apple Inc. (NASDAQ:AAPL).
Misek marked some reasons for the decline in production including iPhone inventory checks at the stores of the three vendors in the U.K.
“We had recently noted that smartphone inventory levels at retail and carriers were elevated but were unsure which OEMs (original equipment manufacturers) were most exposed,” said Misek. His conclusions came after a survey in the hundreds of stores belonging to vendors Orange, Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) and EE revealed that inventories for iPhones and the Samsung Galaxy 3 have been increased.
Misek said that various Apple Inc. (NASDAQ:AAPL) suppliers are witnessing declining sales orders. Jabil, a company that manufactures components for the Apple iPhone 5, announced that they are not getting very strong operations from Apple Inc. (NASDAQ:AAPL)’s side. The companies that manufacture and supply the memory modules are also searching for orders from other companies and drifting away from Apple Inc. (NASDAQ:AAPL).
“Our checks also indicate that Apple Inc. (NASDAQ:AAPL)’s wafer starts at Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930)’s Austin fab have likely been cut,” the analyst added.
Other Information Revealed
Misek drops down his earlier forecast for iPhone sales from 30 million to 27 million for the third quarter and from 50 million to 45 million for the fourth quarter.
According to Misek, the iPhone 5S and low cost iPhone will be launched in September. In the fourth quarter, Apple Inc. (NASDAQ:AAPL) will launch the Retina iPad Mini. Apple iPhone 6, which will have an approximately 5 inch display, might be launched next year.