Nikkei’s iPhone X supply chain cuts: Here we go again

Nikkei Asian Review covers Apple’s supply chain like Fox News covers Robert Mueller.

From Nikkei Asian Review, Jan. 30, 2018:

Apple to halve iPhone X output on weak holiday sales

Note: The iPhone X was the world’s best-selling smartphone that quarter, despite Nikkei’s 50% output cut.

From Nikkei Asian Review, June 8, 2018:

Apple warns suppliers of 20% drop in new iPhone parts orders

My take: Permit me to quote Daniel Eran Dilger:

Everyone in the industry should know that “channel checks” of Apple suppliers offer largely worthless data. But every January, Japan’s Nikkei newspaper unloads a report suggesting that Apple is scrambling to slash production of its newest iPhone because of disappointing sales. Every year that report has been false, and every year the tech media falls for it.

Among the outlets that took Nikkei’s bait Friday:  CNBCReuters, CNN Money, The Street and SA News. Apple fell 2% in overnight trading. Mission accomplished.

See also: Who ya gonna believe, Nikkei Asian Review or your lying eyes?

13 Comments

  1. Ken Cheng said:

    In some weird way, you have to love these rumors pretending to be news, because all those sources from analysts and so-called journalists and pundits and message board experts, predisposed to badmouthing Apple, will come out of the woodwork and expose themselves for what they are. And when the actual facts come out, you can put all those naysayers on your unreliable rumormonger list.

    3
    June 8, 2018
  2. Kathy Corby said:

    You know, as an AAPL long, I hedge earnings and stagnant periods with sold OTM calls. (Those of you who don’t enhance your returns with options, you may tune out now.) I have to be grateful for the occasional Asian supply chain pullback to allow me to close these at a profit and wait for the next leg up. I suspect I share Wall Street traders’ motivation in this. Thank you Nikkei, and now that you have accomplished your mission, you can go back to your hole.

    6
    June 8, 2018
  3. Fred Stein said:

    Uh, Didn’t Buffett and Dimon tells us to think long term?

    2
    June 8, 2018
  4. Gregg Thurman said:

    “Among the outlets that took Nikkei’s bait Friday: CNBC, Reuters, CNN Money and SA News. Apple fell 2% in overnight trading. Mission accomplished.”

    Actually, there were 16 (as of this response) reprints of Nikkei’s report (4 from Reuters alone).

    A very smart man once told me that if you can’t measure something, you can’t manage it.

    I’ve been tracking many aspects of Apple’s business since 2005. One of the elements I track is unit sales by quarter and that quarter’s sales in relation to the year. Each quarter’s results are pretty consistent as to relationship to full-year results.

    Since iPhone 6 launch December quarter generates ~34.48% of full-year unit sales.
    March quarter generates ~24.72% of full-year unit sales
    June quarter generates ~19.54% of full-year unit sales and,
    September quarter generates ~21.25% of full-year unit sales.

    These averages fall within 1.5% of actual results and have done so since FY2015 when iPhone unit sales peaked and flattened.

    Further, I have averaged and charted AAPL’s daily trading activity since FY2011. The result is an illustration of a seasonal trading trend by AAPL. During the June quarter AAPL peaks during the third week after May expiry, then goes into a four-week decline averaging 4.1% from the period’s intraday high.

    Earlier this week, in anticipation of that decline I bought 215 April 29 $190/$187.50 Put Spreads at an average of 78¢. I do not attribute today’s trading action (which make me very happy) to the Nikkei report (as stupid as it is), but to AAPL’s historic trading trend.

    5
    June 8, 2018
  5. Gregg Thurman said:

    I should point out that the historic trend I referred to above shows AAPL rising from its June swoon 4.3% by July expiry. I will take a similar position with Calls vs Puts for that eventuality potentially tripling my money with each investment.

    4.3% doesn’t sound like much, but when you’re trading at near $200 that percentage amounts to ~$9 in a short period of time. I only want AAPL to move about $5 to maximize my investment. This cycle I underestimated AAPL’s strength and bought too early. Had I waited another day or two I could have bought $192.50/$190 Put Spreads or reduced my cost basis about $2,000.

    1
    June 8, 2018
  6. Gregg Thurman said:

    “So the “selloff” was promulgated during the premarket,”

    Actually, the “selloff” began on Wednesday when AAPL’s intraday low dipped. This was followed by AAPL’s Closing decline yesterday.

    In my opinion, the timing of the Nikkei report is just coincidental and a non-issue for traders.

    0
    June 8, 2018

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