A report from Taiwan’s Commercial Times on Wednesday says Apple (s aapl) is reducing shipments of the iPhone 4S by 10 to 15 percent, and telling its suppliers to scale back and delay delivering components until early next year. But the conclusion doesn’t line up with accounts from Apple and other third parties that show the iPhone 4S has sold well since launch and is continuing to do so.
Analysts like Maynard Um of UBS are jumping in Wednesday to call the report “without merit” and say that “iPhone 4S demand is not an issue. Our recent checks indicate that iPhone 4S is still selling out and experiencing 1-2 week waits for online orders with demand also driven by accelerated carrier/country launches.”
Others analysts that follow Apple and inform their investors about the company’s status agree it does not match up. RBC Capital Markets’ Mike Abramsky wrote Wednesday that a possible explanation could be Apple strategically adjusting its supply chain for better pricing by “pulling back its typical over-ordering of components.”
Even just relying on logic, the Commercial Times report doesn’t really add up. Apple sold 4 million iPhone 4S devices in the first weekend it was available in October in the U.S., U.K., Canada, Japan, Germany and a few other countries. Each U.S. carrier reported selling out of the devices in stock during its first run. And since then, U.S. stores have had trouble keeping them on the shelves. Then last week, when pre-orders for the iPhone 4S in Hong Kong were opened, they sold out of the pre-order supply in 10 minutes.
With continued strong demand in the U.S., with more countries still set to have their first chance at buying it, and with the holidays coming, it would defy logic that Apple would be scaling down its production rather than making even more iPhone 4S devices.
And, let’s not forget, Apple has already gone on record with huge expectations for the coming months. The usually circumspect and conservative executive team that regularly sandbags its quarterly estimates, said point-blank that this coming quarter will be Apple’s biggest for iPhone sales yet.