Falling iPad Mini Demand Claims Show Why Watching Suppliers For Apple Success Misses The Point

Posted: May 11, 2013 in Gadgets, GT, Mobile, Technology

This week, Bloomberg sparked a number of headlines
with reports that iPad mini demand was failing based
on supplier Pegatron’s earnings numbers as revealed
at an investor conference. Those claims were later
refuted by Pegatron CEO Jason Cheng, who argued
that Bloomberg’s Tim Culpan had misquoted him to reach his conclusion about iPad mini numbers. The problem here is one that comes up repeatedly for
Apple watchers, namely that of trying to divine from
scattered sources what the future holds for the
iPhone maker. Reports of slowdowns, layoffs or weak
fiscal results from any number of supplier companies,
including Pegatron, Foxconn and Sharp have bloggers feverishly pounding keys, predicting dire straits for
Apple to come. The problem is, these have never
been a very strong indicator of what’s actually going
on with Cupertino and its products, and for good
reason. As Fortune’s Phillip Elmer-DeWitt learned from Cheng
via email, Pegatron has a wide customer base and
never breaks out how each of those are affecting its
bottom line or its quarterly financial outlook. Pegatron
has its fingers in all kinds of pies, including home
video game consoles and e-readers, both of which are currently suffering badly in terms of consumer sales. Here’s a look back at some equally dire reports from
recent memory that also turned out not to have any
relation whatsoever to anything Apple was doing,
performance-wise. Apple’s Q2 Earnings Foreshadowed by Weak
Foxconn Results – Disappointing results at Foxconn
for its most recent quarterly results were seen as a
bad sign for Apple’s progress, but it still filed
extremely impressive results, despite a rare year-
over-year earnings decline. Apple’s Suppliers Experienced A Very Weak February
– Supplier reports indicated that Apple was having
weak iPad sales, which obviously wasn’t correct as it
blew expectations away in terms of sales of its iOS
tablet devices. Apple iPhone 5 Sales Showing Weakness – Apple
was seen as dramatically underperforming relative to
Wall Street’s consensus estimates on iPhone sales
for Q1 2013, and in fact they exceeded consensus by
a fair number (selling 47.8 million iPhones). Exclusive: Japan’s Sharp cuts iPad screen output –
Sharp shipping woes on iPad panels were seen as an
indicator that Apple was having difficulty moving
iPads, prompting one analyst firm to predict that
Apple would ship only around 8 million iPads in Q1
2013, when in fact they shipped 22.9 million. In the best of cases, supply chain reports offers
some vague insight into the larger picture of Apple’s
inventory channels, but when looked to for solid
indicators of performance, they’re about
as dependable as using a magic 8 ball. The iPad
mini, by all reasonable accounts, looks to be a very strong performer for Apple, and it’s very likely we’ll
see that trend continue.

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