Reports out of China claim Apple is cutting back on iPhone 4S parts orders because consumer demand is dropping off. Those reports are wrong, according to UBS analyst Maynard Um, and his checks show iPhone 4S demand is still going strong.
The report Mr. Um referenced was from the Commercial Times out of China. According to the article, unnamed sources said Apple told iPhone parts suppliers to delay their shipments from the fourth quarter of 2011 to the first quarter of 2012 because of weakening sales.
Customers line up for the iPhone 4S in San Francisco
“We believe the Commercial Times report is without merit and believe iPhone 4S demand is not an issue,” Mr. Um said. “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.”
He added that parts suppliers “have very recently indicated strength into [the calendar fourth quarter], which would be counter to weakening demand.”
Apple began selling the iPhone 4S in the U.S. and a handful of other countries on October 14, and managed to sell over 4 million units during the first weekend of availability. The company expanded sales into 22 more countries on October, and already has 15 more countries lined up for November.
iPhone 4S pre-orders sold out in Hong Kong in about 10 minutes, adding to the notion that demand for Apple’s newest combination iPod and smartphone isn’t waning.
Mr. Um is maintaining his “Buy” rating and US$510 target price for Apple’s stock. Apple is currently trading at $397.57, down 8.66 (-2.13%).