14 DAY TRIAL // Analyst Shaw Wu with Sterne Agee told investors today that Apple has reduced current-generation iPhone orders by roughly 25 percent, after checking with the company’s suppliers.
Describing the downshift “significant”, Wu said “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.”
“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 added.
Comparing the situation with last year’s consensus, ahead of the October iPhone refresh, Wu noted that Wall Street’s estimates "grossly underestimated the impact of a pause and inventory drawdown ahead of the iPhone 4S." Wu thus advises investors to keep their expectations low until the September quarter.