iPhone 4S Orders Down, Major Retailers Putting It On Sale – Is This The iPhone 5′s Fault?
Posted by Michael Nace on Tuesday May 15, 2012 Under Apple News, iPhone 4S News, iPhone 5 OpinionIt’s hard to keep your finger of the pulse of everything that’s transpiring in the Apple universe, so leave it to the iPhone 5 News Blog readers and commenters to keep me in line. Commenter Michael D. dropped us a line last night and had this to say:
Based upon Apple’s previous methodology, the only time they have allowed retailers to discount their products have been just before release of the next iteration. I saw that one of your posters had mentioned that Target and another store had discounted the 4S and I just noticed on bestbuy.com that there is a $50 savings on the iPhone 4. Coincidence? I hope not.
Michael D.’s missive is well-timed: there are numerous reports today that connect nicely with the rise of iPhone 4S discounts in the U.S. retail sphere: Apple Insider, for example, is reporting that: “Analyst Shaw Wu with Sterne Agee said in a note to investors on Tuesday that he has found in his checks with suppliers that Apple has reduced iPhone orders by between 20 and 25 percent from the 35.1 million units the company shipped in the March quarter.”
Similarly, PC Advisor had this to say about the downslope of 4S orders on Wall Street: “Some Wall Street analysts are ‘starting to panic’ over Apple’s revenues for the quarter, claims Jay Yarrow, in a story at BusinessInsider. ‘Analysts think Apple is due for a big come down,’ Yarrow insists. But it’s hard to see evidence of panic.”
So, here’s the situation: production orders for the 4S are way down, retailers are dropping the prices, and the iPhone 5 — whether because it is actually coming soon or is simply perceived to be coming soon — is directly impacting the sales and order figures for this quarter.
The big question is: do these developments point to the iPhone 5 actually coming soon, or are they only a result of the rumor mill?
One way to parse this out is to look back at last year’s news regarding iPhone 4 sales leading up to the eventual release of the iPhone 4S. On May 11th, 2011 — a month before the 2011 WWDC — the Blog was reporting on still-brisk sales for the iPhone 4. There were some signs of slumping sales this time last year, but you’ll recall that Apple had some special “sub-releases” of the iPhone 4 that extended it’s sales cycle: namely, the Verizon release, the white iPhone 4, and the unlocked iPhone 4. This year, the 4S hasn’t enjoyed any of those types of sales boosts.
It’s also worth noting that we began to see similar reports of retailers dropping prices and Apple cutting production orders in August of last year — not May: BestBuy began offering the iPhone 3GS for free on August 22nd, 2011, and this report from August 29th indicated that Apple was dropping prices and boosting display orders ahead of what we thought would be a Q4 iPhone 5 launch, which of course turned out to be the 4S.
However, in spite of these moves in lat August of last year, Charles Moore reported at the time that the delay was having little negative effect On global sales of the iPhone 4, and Wall Street was not nearly as “panicked” as they are this time around. Perhaps the reason for the May panic is that Wall Street believes that the iPhone 5 is not coming until fall, and a slump in 4S sales now means a lean summer, which could hurt Apple’s stock value.
It remains to be seen if the drop in the 4S’s price and Apple’s slashing of orders is indicative of a June iPhone 5 or not. Sure, we saw these things happening in August of last year — but the iPhone 4S didn’t come for quite a while longer into the fall. Similar reports are surfacing now, but the 2012 WWDC — which ostensibly would be Apple’s perfect launch event for a June announcement — is less than a month away.
Whether the iPhone 5 is slated for June or not, my feeling is that the slashing of prices and orders is reactive, not proactive. If retailers aren’t moving the 4S, they will do what they can to get people buying it again. And if retailers aren’t ordering as much iPhone 4S product from Apple, Apple will obviously cut production so that they don’t end up with sprawling warehouses filled with 4S units collecting dust.
But one thing is for sure: it is the iPhone 5′s fault. Regardless of what the sober tech media might say, users are holding out hope for the WWDC to reveal a “one more thing” moment. Whether it turns out to be the iPhone 5 or just some new Ivy Bridge-equipped Macs, I would imagine that 4S sales will be particularly flat for next four weeks or so.
Thanks to Michael D for the article suggestion!
By Michael Nace
Michael Nace is the Publisher of the iPhone 5 News Blog and iPhone 6 News Blog. He has published articles about the iPhone since 2010.
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May 15th, 2012 at 11:38 am
Or, maybe the new Galaxy phone is actually putting a dent in the armor that is Apple? Is Apple actually trying to compete and not just rest on their fame and fortune for sales?
A hot comment -- What do you think?
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May 15th, 2012 at 12:05 pm
Here in the UK the TV advertising for the IP4s seems to have ramped up over the last week and that only happened last year with the IP4 just before the IP4s emerged in October.
I am currently leaning towards a June announcement of the new iPhone along with new Macs as I think Apple will release the iTV and Mini iPad (assuming these are real products) later in the year to gain the best market time.
That leaves (you’ll love this @SpasticPat) the thing we’ve all been waiting for to be the iPhone!
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May 15th, 2012 at 1:34 pm
There are to many signs for iOS 6 at the WWDC like this http://9to5mac.com/2012/05/15/developers-begin-seeing-ios-6-hits-in-app-store-application-usage-logs/ or this: http://iphone5newsblog.com/2012/05/12/ios-6-beta-is-coming-to-wwdc-2012-can-the-iphone-5-launch-with-ios-5-1/
BUT ! There are three possibly things which can afford a release before October.
1. Apple will announce the new iPhone at the WWDC with iOS 5.1 or 5.2 and iOS 6 comes later. (It’s the most unrealistic possibility)
2. Apple will announce the new iPhone and iOS 6 Golden Master or full version at the WWDC and launch it in June/July. This perhaps happen, if Apple only introduce a new and own Map App, improve Siri and they redesign the lock screen (i don’t like it). Therefore they don’t need any beta phase. (It’s possibly but i think this won’t happen)
3. They introduce only iOS 6 at the WWDC. I think the iOS 5 beta was very long. The beta of iOS 4 and the betas before weren’t 4 monts large.The average was i think 2-3 months. And so they can launch the new iPhone in late August or may in September.
(This is the most likely possibility i think)
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May 15th, 2012 at 3:01 pm
i for one believe a company can operate outside of the guidelines it previously set. They can release the phone with 5.1 or 5.2 and then put iOS 6 out as a update(it wouldnt be that far fetched). they can also choose to debut the new macs at WWDC as well. im not going to limit a company by what they did in the past for the simple fact they can always set a new trend whenever they decide to whether we apple fans like it or not. It’s all in the name of being innovative and unpredictable IMO.
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May 15th, 2012 at 3:51 pm
We are still dreaming for the launch of iPhone 5, and the dreams will do come real, we will do dreams for the Apple products to modify its priority.
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May 15th, 2012 at 4:13 pm
This is exactly what in line with what I was saying about a week ago on this blog. If sales start to slump, it would send a message to Apple that people aren’t going to just keep buying the same product that has essentially been out for two years now. Consumers want something different. If people keep buying it then Apple will take its sweet time, if they stop then Apple will be forced to release it sooner than later.
If the i5 doesn’t have some major upgrades and amazing new features, they are going to start losing some major market share to competitors.
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May 15th, 2012 at 4:36 pm
Another great write-up Michael. Personally, my prediction is that Apple will release the iPhone 5 in the fall around the same time frame as the 4S and rely on Macbook sales to prop up the summer. Besides, with the speculative mini iPad, iPod and the iTV’s possible releases, Apple doesn’t stand to lose any investors; despite how ‘panicked’ they may seem now (and for the record, isn’t it their job to panick over every slight possibility?). That’s of course not what i’d like to see happen but we should all know by now that Apple rarely, if ever, tailors their products and/or timelines to meet customer demands and wishlists. I’ve said it before and i’ll say it again, Apple’s strong-suit as a company is that they are forward-thinking; unlike Android who gives the people what they say they want right now (or what they want in an iPhone right now-hehe); instead they innovate and show the people what their future selves will want/use. So i’m calling it now: iOS-6 & Macbook line at WWDC, iPhone 5 in the fall, iTV and iPod (potentially) during the holiday season and a mini iPad in the Spring. IMO
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May 15th, 2012 at 5:16 pm
Iphone 5 is coming out next month! I got information of armored guards escorting truck load after truck load for the past 2 months from So Cal harbors to Cupertino. They are guarding the trucks so no one pulls a “fast in the furious” move on them. Trucks are inspected upon leaving for any tampering. Also, lots of Iphone 5 testing going on by “windtalkers” and even testing of the Iphone 6 prototype. The Iphone 5 is here to destroy the SG3!
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May 15th, 2012 at 5:59 pm
@DUFF
That seems hard to believe. Why would this be the first ANYBODY has reported something like this? And why would the iphone 6 already be in prototype right now? Are you saying that when they release it in a year from now that it will be running one year old technology? I find that very hard to believe. If they already have a I6 prototype, why wouldn’t they finish testing it and put it in mass production? I think this is a rumor being started just to get another wild rumor out there.
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May 15th, 2012 at 7:26 pm
There is little doubt that the iPhone 5 is going to be released next month.
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May 15th, 2012 at 8:00 pm
Nice article, Michael, I have to say, given the timetable comparison, it seems more plausible to me now that the new iPhone could actually be unveiled in June, and released in July.. I doubted it highly before, but now, who knows?
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May 15th, 2012 at 8:45 pm
The thing is I’ve been waiting long for the iPhone and I’ve come to settle iPhone June or HTC One X June. It all comes down to Apple’s WWDC.
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May 15th, 2012 at 9:21 pm
Anticipation is part of the whole thing.Keep up the good work MR.NACE..
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May 15th, 2012 at 9:28 pm
Nicely written Michael!! However, I think that Apple has a fairly substantial track record for the pricing of their products and the reduction of their retail prices. Going back several iterations of the iPhone, Apple allowed retailers to reduce the price of the current model prior to release of a new model only twice before, 2010 and 2011. You pointed out the details of the 2011 chain of events and in 2010 Apple allowed retailers to reduce the price of the iPhone 3GS on May 25th (source Christian Science Monitor and mashable.com) announcing the iPhone 4 on June 7th with a June 24th release date. Prior to this ‘trend’ they had not reduced the price of the iPhone until the new product was released. However, they had established this pattern with other product lines such as the iPod and Mac (they have yet to do it with the iPad). When they have reduced the price it has typically been inside 8 weeks of a new product release. As @Vernicularis pointed out iPhone ads have increased this month. The increase in ads (especially featuring actors like Zooey Deschanel and Samuel L. Jackson, which has never been done by Apple before) coupled with a 25% decrease in inventory (noted in the Apple Insider story) would typically be designed to clear inventory. While I very well could be wrong and this all may be coincidental, I will reiterate my previous sentiments…I hope not.
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May 15th, 2012 at 10:50 pm
Kinda just spent my iPhone 5 money today
. Bought a go pro hd hero 2 with the money. Hope I can recuperate some money before the announcement! Michael, How many comments am I up to now, I know spastic is at like a kabillion since recently.
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May 16th, 2012 at 12:28 am
I’m really hoping for the iPhone 5 June release, but there just hasn’t been a lot of rumors going around. Yeah, some “parts” have been leaked in, and 4S prices are being reduced, but where is all the tens of thousands of sources claiming that the iPhone 5 is being announced for sure, in June? So many sources were saying a March release for the new iPad, and the same is happening to the new Macbook Pros Apple is no doubt going to show. So where are all the rumors about the iPhone 5? Too many different speculations about the iPhone 5, and if I were Apple, I would look at it through a business standpoint and release it in the fall, perfect for the holiday season and for all those hundreds of thousands of iP4 owners to finally get their upgrade. But hey, don’t get me wrong, I’m praying for a June release, but so far, things aren’t looking like that could happen.
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May 16th, 2012 at 12:56 am
The iPhone 4S is a great phone, but it doesn’t stand the test of time. The battery life is low (even though it has no 4G), the screen is small, the design is very fragile, it has no 4G and the screen is quite small.
Apple cannot compete with the Galaxy S3, new LG and the next Razer with the current iPhone 4S.
When the original iPhone came out, there was nothing else like it. Apple needs to do this with the iPhone 5. The iPhone 5 needs to have a new design and new hardware and software features that make the iPhone 5 more of a need and less of a want.
Also, there is many, many significant things about the number 5. One of the most important facts about the number 5 is that every human has (or should have) 5 fingers and 5 toes. If we had 4 fingers and toes (or even 6), life would be much harder. A simple thing like picking up your iPhone or a pencil would take much more effort if we didn’t have 5 fingers. Walking and balancing would be much harder without 5 toes.
The number 5 is a great number and it’s very unique in many ways (look up the number 5 on wikipedia). Therefore, in my opinion, the iPhone 5 should reflect the number 5 by being unique and making our lives easier.
Sorry for the long comment.
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May 16th, 2012 at 1:03 am
As I stated in a previous post, I think the one thing we ALL are waiting for, techies, nontechies, fanboys and girls and all are waiting for the new iPhone. Unlike almost all other Apple products, everyone and their brother knows what an iPhone is. While the Mac line is most likely going to be upgraded for sure, again, it’s not something that non-tech people are really paying attention to or are aware of rumors of. Same with the iTV/macTV, most people aren’t aware of the rumors of this unless you’re going out reading blog after blog. The one thing people know is coming is the iPhone. Since noting the discounts at Walmart and Target articles in recent comments, as I’ve been shopping at the local Walmarts (there’s like 3 w/in a 20 mile radius I drive near regularly) and the one target and a radio shack, I’ve noticed price decreases as the articles stated.
@Undefeatble, you’re comment # is 214, this is 242 for me
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May 16th, 2012 at 4:27 am
Unfortunately I still don’t see a June release for the iPhone5.
4S sales decreasing had to happen, it’s nearly a year old and there are newer shiny-er things out there now. Alos, it could never sustain the huge sales it generated when it was launched indefinitely. Decreasing sales sounds bad until you see that it is decreasing from stupidly big to just ridiculously huge.
Apple will have their release path nailed on by now and any short-term fluctuations are not going to make Cupertino panic and rush out the iPhone5, the logistics are just to complex to change at the last minute without great expense.
I still fully expect iOS6 at the WWDC in June though.
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May 16th, 2012 at 5:33 am
Apple won’t replace the 4s with the 5 but keep them both as different options, both should sell well.
Remember, the IP5 could possibly have been ready to go last October but may have been pulled at the last minute due to some glitch. If this is true then they will need to get this handset out as soon as possible so they can start working on the next one.
I think it will be called the ‘New iPhone’ so they can release it with iOS 5.? and we can all upgrade to iOS6 later in the year.
@Michael
Does your case maker contact still say June, he was right last October but not heard you comment on this for a while?
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May 16th, 2012 at 8:35 am
This is exactly what Apple love which is the whole mystery around their products. Will they wont they. I think its clear they have a number of new products and releases waiting in the wings to launch which combined with the mountain of money Apple are sitting i don’t think they are worried panic or not.
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May 17th, 2012 at 3:37 am
It’s hard to see a company with the cash pile, market capitalisation they are valued at and the cult following Apple have panicing over anything.
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May 17th, 2012 at 3:48 pm
@Michael
Your case maker inside info for the record, they did originally say June?
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May 17th, 2012 at 3:54 pm
@Vernicularis — Yup, he originally said June back in November.
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May 19th, 2012 at 11:16 am
Cool!
Does he still say June?
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