Apple Chip Suppliers Report Slowing Orders for Q2 2016

[MacRumors]

Chip orders from Apple for the second quarter of 2016 have been notably slow, according to unnamed sources in the integrated circuit supply chain (via DigiTimes).

Overall, chip orders placed by Apple for Q2 are expected to be only slightly higher than those for Q1, despite the launch of the company's 4-inch iPhone SE and 9.7-inch iPad Pro earlier this month.

First-week sales of Apple's new devices have been disappointing, according to the sources, while chip shipments for the iPhone 6s and 6s Plus for the second quarter of 2016 are likely to be halved from those shipped in the first quarter. According to DigiTimes:

Shipments for the new iPhone SE will be unable to offset the fall in shipments for the iPhone 6s and 6s Plus devices in the second quarter, the sources continued. The shipment target for the SE in the second quarter is four to five million units.

The same sources claim chip orders from Apple are unlikely to return to the previous high levels until after the third quarter of 2016, when its next-generation iPhone, iPad, MacBook and iMac products become available.

Taiwan-based website DigiTimes has a mixed track record at reporting on Apple's upcoming product plans, but its sources within the upstream supply chain have proven reliable in the past.

Back in February, the site claimed Apple would ship 9.8 million iPads in the first quarter of 2016, potentially its lowest quarterly tablet sales since the iPad 2 in mid 2011.

In January, Apple CEO Tim Cook confirmed during the company's financial earnings conference call that iPhone sales would likely decline in the March quarter, marking the first year-over-year decline since the smartphone was released in June 2007.

Apple forecast that its total revenue in Q2 2016 would be between $50 and $53 billion, compared to $58 billion in the year-ago quarter, signaling the company's first year-over-year drop in revenue in thirteen years.

Article Link: Apple Chip Suppliers Report Slowing Orders for Q2 2016

 

[DrJohnnyN]

The new newly announced products are weak.

 

[Oblivious.Robot]

Well, I personally do hope that they bring in their A-Game with the iPhone 7 or else the decline is imminent.
I mean c'mon, it's only matter of time until people feel being ripped off by 16GB/HDD/100$Pro/iHump over internal battery/Bigger/Smaller/ etc.

-
But of course this is just a personal opinion, and not meant to offend anyone who loves the company dearly.
Edit - I was cautious and even did say "decline" and not **** "doomed". -.-

 

[haydn!]

Why are people shocked? Apple pretty much said this was going to happen. iPhone sales will still be higher than 2014, but lower than 2015 because 2015 was a blockbuster year triggered by huge amounts of interest in a larger screen.

Also, new products weak? They're not even included in Q2 reporting (Jan to March) so we don't know anything about those yet.

 

[thasan]

Expected. Will get worse as the new products do not have the "wow" factor. Apple reducing the cost of phones (SE) show that they are repositioning themselves as the high end market saturates. I am a bit baffled with the 2GB ram for the small ipad pro though. If they have 4 GB ram, they would have got a huge boost in sales (I still bought one).

 

[Ries]

Why are people shocked? Apple pretty much said this was going to happen. iPhone sales will still be higher than 2014, but lower than 2015 because 2015 was a blockbuster year triggered by huge amounts of interest in a larger screen.

Also, new products weak? They're not even included in Q2 reporting (Jan to March) so we don't know anything about those yet.

Ipad Pro launched last year.

 

[haydn!]

Ipad Pro launched last year.

True. But it was clearly a niche product that was never going to be the answer to iPads flagging sales.

I don't think any new release will fix that, it's a waiting game currently to see how the upgrade cycle levels out for people - it seems people are happily keeping tablets as long as they're keeping notebooks (4-5 years) so I wouldn't expect stabilisation in this segment for another 18-24 months.

 

[mejsric]

Why are people shocked? Apple pretty much said this was going to happen. iPhone sales will still be higher than 2014, but lower than 2015 because 2015 was a blockbuster year triggered by huge amounts of interest in a larger screen.

Also, new products weak? They're not even included in Q2 reporting (Jan to March) so we don't know anything about those yet.

you are member since 2008, and you shouldn't be shock also that apple is doomed.

 

[haydn!]

you are member since 2008, and you shouldn't be shock also that apple is doomed.

Wow, it's really been that long. Explains a lot.

 

[Floatingworks]

There seems to be some discrepancies in this report:

1. Didn't the quarter end on the 26th or 27th? The first SE devices will arrive on the 30th or the 31st. Most shipping is 2-3 day or next day. How can any significant amount of SE sales be recorded in the March quarter?

2. The 3 largest Chinese online retailers had 3.4 million orders by the end of the first weekend of preorders. Additionally, the number of views on the Chinese Apple website increased as much as it did when the 6s was released. So, obviously there is decent demand in China. I think the total estimated sales of 4-5 million units in the June quarter is way off the mark.

 

[OllyW]

Didn't the quarter end on the 26th or 27th? The first SE devices will arrive on the 30th or the 31st. Most shipping is 2-3 day or next day. How can any significant amount of SE sales be recorded in the March quarter?

It's discussing the chip orders that were placed in Q2. The first batch of SE devices would have been manufactured before the end of the quarter.

 

[MacFather]

Deleted.

 

[Floatingworks]

It's discussing the chip orders that were placed in Q2. The first batch of SE devices would have been manufactured before the end of the quarter.

"Shipments for the new iPhone SE will be unable to offset the fall in shipments for the iPhone 6s and 6s Plus devices in the second quarter, the sources continued. The shipment target for the SE in the second quarter is four to five million units, the sources said." - if this is not a quote from this report then my apologies.

 

[OllyW]

"Shipments for the new iPhone SE will be unable to offset the fall in shipments for the iPhone 6s and 6s Plus devices in the second quarter, the sources continued. The shipment target for the SE in the second quarter is four to five million units, the sources said." - if this is not a quote from this report then my apologies.

Yes it is from the report but it's stating that the extra shipments of the chips to make the new SE will not be enough to compensate for the fall in shipments of the chips used to make the 6S and 6S Plus during that quarter.

 

[Floatingworks]

Yes it is from the report but it's stating that the extra shipments of the chips to make the new SE will not be enough to compensate for the fall in shipments of the chips used to make the 6S and 6S Plus during that quarter.

I guess it can be interpreted that way, which isn't as dire because it appears some of those chips included in the SE were made months ago.

 

[NT1440]

derp derp, orders slow before a full version release (iPhone 7) just like they always have, analysts rush to make clickbait articles while others go to manipulate stock fluctuations.

How many times are we going to play this stupid game?

 

[Floatingworks]

derp derp, orders slow before a full version release (iPhone 7) just like they always have, analysts rush to make clickbait articles while others go to manipulate stock fluctuations.

How many times are we going to play this stupid game?

No doubt. I also think some net shorts got caught on the wrong side of the trade. Some analysts were thinking that 10-15 million SE sales were possible by the end of the year, but that 3.4 million Chinese reseller number probably caught some by surprise.

 

[Chupa Chupa]

I imagine overpricing already pricey iPads might keep pinching sales vs stabilizing them.
[doublepost=1459429713][/doublepost]

derp derp, orders slow before a full version release (iPhone 7) just like they always have, analysts rush to make clickbait articles while others go to manipulate stock fluctuations.

How many times are we going to play this stupid game?

Maybe not a stupid game anymore. iPhone sales were down Xmas quarter as analysts predicted based chip orders - not a usual time for iPhone sales to dip.

 

[Shirasaki]

I believe this is the time Apple should pay for what they deserve.

Tim Cook got what he deserved. 16GB base storage 7 years in a row speaks for itself.

And it looks like Apple is attempting to clear stock A9 chip in order to make room for their A10 chip. But since A10 is not a performance boost, hmm, it is hard to say if iPhone 7 sale would decline after then.
But, Apple would not reduce the price of their flagship product. This is for sure.

 

[NT1440]

Maybe not a stupid game anymore. iPhone sales were down Xmas quarter as analysts predicted based chip orders - not a usual time for iPhone sales to dip.

If I remember correctly, sales growth was down. That is an important distinction. That said, I certainly could be remembering wrong.

 

[69Mustang]

I guess it can be interpreted that way, which isn't as dire because it appears some of those chips included in the SE were made months ago.

You seem to be conflating chip shipments in Q2 with orders for the SE and coming up with an unified theory. This story has nothing to do with SE sales per se. Also, the slow orders for chips may not be an indication of demand at all. An earlier breakdown of the SE showed it used some chips that were sitting in inventory from last year. That would have affected Apple's Q2 orders. How much? Depends on how much excess inventory Apple had sitting.

Tim Cook famously says don't try to gauge sales success by examining the supply chain and that's what you're trying to do. There is no direct correlation.

 

[vsx-ax3]

Well, I personally do hope that they bring in their A-Game with the iPhone 7 or else the decline is imminent.
I mean c'mon, it's only matter of time until people feel being ripped off by 16GB/HDD/100$Pro/iHump over internal battery/Bigger/Smaller/ etc.

-
But of course this is just a personal opinion, and not meant to offend anyone who loves the company dearly.

Unfortunately you are right in this matter. Apple not really leads the way in innovation and design anymore - you forgot the camera-wart.

By the way, I do love Apple, that's the sadness in this.

 

[blackcrayon]

Well, I personally do hope that they bring in their A-Game with the iPhone 7 or else the decline is imminent.
I mean c'mon, it's only matter of time until people feel being ripped off by 16GB/HDD/100$Pro/iHump over internal battery/Bigger/Smaller/ etc.
-
But of course this is just a personal opinion, and not meant to offend anyone who loves the company dearly.

It's only been "a matter of time" before the iPhone/whatever else fails since 2007. I'm sure they were going to bring their "C" game for the iPhone 7, but now that the 6s has miserably failed and about to put them out of business, Tim Cook is calling for "B+" now.

 

[Oblivious.Robot]

Unfortunately you are right in this matter. Apple not really leads the way in innovation and design anymore - you forgot the camera-wart.

By the way, I do love Apple, that's the sadness in this.

I concur, that's why I really wish they'd stop on the stingy-behaviour and very well surprise us in September with the iPhone 7 and on, as personally I would hate to leave Apple, but if this goes on then I may have to look elsewhere after my current products wear out.
[doublepost=1459433475][/doublepost]

It's only been "a matter of time" before the iPhone/whatever else fails since 2007. I'm sure they were going to bring their "C" game for the iPhone 7, but now that the 6s has miserably failed and about to put them out of business, Tim Cook is calling for "B+" now.

I legit chuckled.
10/10 on attempt.

 

[vsx-ax3]

I concur, that's why I really wish they'd stop on the stingy-behaviour and very well surprise us in September with the iPhone 7 and on, as personally I would hate to leave Apple, but if this goes on then I may have to look elsewhere after my current products wear out.

I (will) stay in the Apple-family, but I replace my "good old" Apple-stuff only if necessary. A few years ago I couldn't wait to change my gear... Take my money, take it!!! These times are over...