Apple Significantly Reduces iPhone Orders Ahead of Next Generation Device

Apple has significantly reduced its orders for the current iPhone ahead of its anticipated sixth generation device, reports Sterne Agee analyst Shaw Wu.

AppleInsider notes that Wu found in his checks with suppliers that Apple has reduced iPhone orders by between 20 and 25 percent from the 35.1 million units the company shipped in the March quarter. If those numbers hold for the current June quarter, that would result in shipments of between 26 million and 28 million iPhones. That result would be below Wall Street consensus of between 30 million and 31 million.

"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 timeframe," Wu wrote. "It appears 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."


Wu reminds investors that there are about 8.6 million iPhones in channel inventory, with 2.6 million added in the most recent quarter. That should let Apple reach a supply-demand balance of between 4-6 weeks.

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