What's wrong with Apple?
In recent days, the consumer electronics giant has been staggered on several fronts:
- Citigroup cut its outlook for Apple stock (Nasdaq: AAPL), citing reduced sales for the iPad and iPhone models, chatter its analysts heard from the supply chain.
- Digitimes, which sometimes shoots first and asks questions later, reports that “Apple is currently adjusting shipment estimates for its iPad and iPad mini products in 2013 to 33 million and 55 million, respectively, according to industry sources.”
- Topeka Capital analyst Brian White, who closely tracks Apple, said his February “Apple Monitor” cratered.
- Digitimes (again) reports that Apple's touchscreen sensor supplier, Nissha, can’t keep up with expected demand.
There has been a lot of hand-wringing over these reports, which would be less vigorous if the company's stock hadn't tanked in recent months.
But let's remember this: Apple's has always had supply chain issues. Think back to rollouts of the Macintosh and iMacs. You could set your watch to the inevitable stories that the products would be on back order because the supply chain couldn't keep up with demand. If anything, there's an interesting story emerging in the wake of Samsung’s small investment in panel maker Sharp, which supplies both companies.
Apple is no supply-chain slouch, as evidenced by this interesting anecdote on laser machines it needed a few years ago. Each year, the company is ranked among the top 5 supply chain management companies in the world.
But consider this story from another perspective: It probably has little to do with the overall health of electronics demand for consumer devices. Samsung and other Android device providers are chugging away.
The bottom line simply could be upgrade fatigue, as Douglas Alexander pointed out last week in Apple iPad: iThink iWon’t Upgrade. In other words, today's devices are victims of their own innovation success, as well as the rise of cloud services.
And as for rumors, Apple CEO Tim Cook said it best in an analyst call:
I'd stress that even if a particular data point were to be factual, it would be impossible to interpret the effect on our business. Our supply chain is very complex… there's a long list of things that would make any single data point not a great proxy for what's going on.