Apple Reportedly Orders 70-80 Million Large Screen iPhones for Q4

| Analysis

$AAPLApple has ordered between 70 and 80 million next-generation iPhones for delivery by December 30th, according to unnamed sources cited by The Wall Street Journal. The orders are for a mix of 4.7-inch and 5.5-inch iPhones, which has been dubbed iPhone 6 in the media. If true, it would be a record number of iPhone units for any quarter, well above the 51 million iPhone record holiday quarter in 2013.

Apple CEO Tim Cook has often cautioned outside observers from reaching conclusions based on leaks from his company's supply chain. In Apple's January 2013 earnings call with analysts (for Apple's first fiscal quarter), Mr. Cook said:

The supply chain is very complex. And we obviously have multiple sources for things, yields might vary, supplier performance may vary, inventory conditions can vary. I mean, there's just an inordinately long list that would make any single data point not a great proxy for what's going on."

The Wall Street Journal itself noted this cautionary tale, but the newspaper was also quite specific in its report. Apple wants between 70 and 80 million devices; both Foxconn and Pegatron will be producing 4.7-inch iPhone units starting in August; and, Foxconn will exclusively produce 5.5-inch devices starting in September.

The mix of devices was not specified, and Apple has shifted production goals mid-course to meet demand with other product launches. For last year's launch of the iPhone 5c and iPhone 5s, Apple bumped up production of the 5s when that device proved to be more popular than the company had forecasted.

The backdrop for this optimism in Cupertino is Samsung's recent 2nd quarter earnings report. The Korean electronics giant reported missed smartphone unit sales and earnings, and many have attributed it to rumors that the iPhone 6 would have a larger screen.

Apple's confidence seems to be in inverse proportion to Samsung's results.

The Journal's piece came out after the closing bell, so the markets have not had a chance to react to this report. Shares of $AAPL ended the day lower at US$93.939, down $0.491 (-0.52 percent) on moderate volume of 39 million shares trading hands.

Apple reports earnings for the June quarter on Tuesday, after the closing bell. The Mac Observer will have full coverage and analysis of Apple's announcements.

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