Analyst: iPhone Component Order Cuts Due to Much Improved Yield

Shaw Wu at Sterne Agee believes that demand is still robust for the iPhone and that component order cuts are due to improved yields.

"As far as we can tell, iPhone 5 demand remains robust," said Wu.

The analyst believes order cuts can be explained by: "(1) much improved yields meaning lower component builds and (2) supplier shifts."


In other words, Apple likely put in a large order for components based on poor initial yields. Over time as yields improved it was able to cut back on those orders. Also, if the company is switching between suppliers one supplier may have had its order cut in favor of the new supplier.

Apple stock has tanked since the report, following below $500 to a current price of $488. The company reports earnings on January 23rd.

[via BusinessInsider]