More on iPhone 5 Sales ⇥ nytimes.com

Sunday night, a rumour popped up from the Wall Street Journal that Apple was halving their iPhone 5 display orders for the January through March quarter owing to “weak demand”. This has caused something of a massive sell of their shares despite this whole thing smelling wrong:

  1. This news is about a month old.
  2. The iPhone 5 and fifth-generation iPod Touch use the same display, which means it could just as easily be lower-than-expected iPod sales.
  3. The initial report cited a 65 million display order for Q2 2013 — the quarter in question. Apple’s most successful quarter for iPhone + iPod sales was Q1 2012 (October through December, 2011), where they racked up 37 million iPhone sales, and 15 million iPods. Apple doesn’t break down individual iPod model sales, but an educated guess places iPod Touch sales as roughly half of all iPod sales, or 7.5 million, for a total of 42-odd million sales of both products in their most successful holiday quarter. Can they really expect to sell a combined total of 65 million of the products in a non-holiday quarter?
  4. The number was later rescinded from the report. If there’s no number, can this report be trusted?
  5. The timing of this is suspicious, given Apple’s earnings call next week.
  6. The anonymous source is suspect, given the above information.

Before the number was removed, I wrote that “32.5 million displays for their January through March quarter is nothing to sneeze at.” Given the suspect original number, I was wrong — this situation doesn’t seem entirely likely for that quarter. This sentiment was echoed by Tero Kuittinen at BGR:

Perhaps the weirdness of the math is why the current version of the WSJ article no longer cites the 65 million unit figure. Sometime between Sunday at 8:00 p.m. EST and Monday at 7:00 a.m., the Journal decided to drop the number from its article. But if the 65 million number is not right, is the estimate for halving March orders correct?

No, probably not.

So what’s the deal here? Brian X. Chen of the New York Times managed to address the above issues with a named source:

Paul Semenza, an analyst at NPD DisplaySearch, a research firm that follows the display market, said that for January, Apple had expected to order 19 million displays for the iPhone 5 but cut the order to 11 million to 14 million. Mr. Semenza said these numbers came from sources in the supply chain, the companies that make components for Apple products.

A name! Citations! Numbers! Realistic numbers! Not 50%! Amazing!

Looks like there’s a massive windfall in for investors come January 24, the day after Apple’s earnings release. I doubt this will be anything but a record-breaking quarter. In fact, while I don’t think it’ll have the same holy shit factor of Q1 2012, I think it’ll be of a similar kind of reaction.