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Investors Panic Over Petering iPhone Popularity

By Enid Burns MacNewsWorld ECT News Network
Jan 15, 2013 2:23 PM PT

Apple stock has fallen below the US$500 mark on news that it reduced orders of iPhone 5 screens, and possibly screens for other devices.

Investors Panic Over Petering iPhone Popularity

Many see the revised orders as cause for alarm, and investors have driven the stock to a closing price of $485.92, the first time it's been priced below $500 since Feb. 16 of last year.

The issue was first reported on Sunday in The Wall Street Journal, which quoted an unnamed source who said Apple had reduced its screen orders at one factory.

"The market reacted to one piece of news coming from a source that Apple cut about half the orders for screens. It's really important to put the data point into context, it's one data point from one source about a particular supplier," IHS iSuppli Senior Analyst Wayne Lam told MacNewsWorld.

Apple did not respond to our request to comment for this story.

Component Balance

It is likely that Apple is "getting into line so displays are in sync with other components being ordered," Vinita Jakhanwal, director of mobile and emerging displays and technology at IHS iSuppli, told MacNewsWorld.

Apple may need to adjust its order following the Q4 launch of the iPhone 5.

"There have been reported cases that Apple over-ordered prior to launch," said Lam.

All eyes are on the iPhone 5, the phone was just launched in Q4 of 2012, but it is not known whether the reduced order is for iPhone 5 screens only, or if it also includes other models and devices.

"I think we are looking at the entire screen orders for all phones, not necessarily the iPhone 5," said Jakhanwal.

Demand Drop?

While investors are selling their stock, thinking demand is low for the iPhone 5, that may not be the case. Lam said that the iPhone is still on track. "We believe that there is momentum behind it."

It will be a few weeks before the 2012 fourth-quarter results are released, and any current reduction in orders will affect shipments in Q1 and Q2 of 2013.

"In the universe of explanations, there are many, many answers to why orders were cut. The likely scenario is Apple optimizing their supply chain," said Lam. "We don't see so far relaxed demand. Right now, there's just too many possibilities that can answer why they cut the display orders to jump to that conclusion."

The reaction may be a bit overblown.

"The technology industry is rife with rumors, especially when it comes to companies like Apple," Scott Steinberg, strategic innovation consultant at, told MacNewsWorld. You have intelligence groups hoping to gain an edge from trend spotting."

While there is some likelihood that Apple did, reduce its orders on certain components, it may be wise to put things in perspective.

"Apple has been outperforming the market by considerable measures of magnitude," said Steinberg. "Apple's been going gangbusters. It's a question of how high the roller coaster can climb before coming down."

Is "too much screen time" really a problem?
Yes -- smartphone addiction is ruining relationships.
Yes -- but primarily due to parents' failure to regulate kids' use.
Possibly -- long-term effects on health are not yet known.
Not really -- lack of self-discipline and good judgement are the problems.
No -- angst over "screen time" is just the latest overreaction to technology.
No -- what matters is the quality of content, not the time spent viewing it.
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