Reports that Apple is in the midst of scaling back parts orders for the iPhone 4S are overblown, according to two separate analyst firms.
In notes sent out to investors this morning, Piper Jaffray and UBS raise serious questions about a report that demand for Apple's latest iPhone was thinning out. Among their reasons for doubt: iPhone shortages in Apple's retail stores and continuing wait time on new orders through Apple's online store.
"We believe the Commercial Times report is without merit and believe iPhone 4S demand is not an issue," wrote Maynard Um, a hardware analyst for UBS. "Our recent checks indicate that iPhone 4S is still selling out & experiencing 1-2 week waits for online orders with demand also driven by accelerated carrier/country launches."
Piper Jaffray's Gene Munster weighed in with results after checking stock at a number of Apple's retail stores in the U.S.
"We called 30 Apple retail stores in the U.S. on Monday (11/7) and found that 17 (57 percent) were completely sold out of iPhone 4S units. Of the 13 (43 percent) stores that had some stock, none had availability of all SKUs," Munster wrote. "Given the stock outages at U.S. Apple stores nearly one month after the launch, we believe it is unlikely that Apple would cut production, when it clearly cannot build iPhones fast enough to meet demand."
The original report from the Commercial Times, which was relayed by Digitimes earlier today, remains a bit tricky to decipher. It appears to say both that Apple was too aggressive in its initial supplier orders--implying that end-user sales of the 4S have been disappointing--and that the company had run short of key components due to supply problems.
Combined, these issues allegedly forced Apple to scale back orders for its new handset, resulting in a 10 to 15 percent drop in revenue at the company's suppliers for the quarter as a result, the report claimed.
The iPhone 4S came out of the gate as Apple's fastest selling product yet, with four million 4S units sold in its first weekend on sale. Since then, Apple has expanded sales to 22 additional countries, and the 4S will arrive in 15 more at the end of this week.