Why Apple isn’t responding to vague claims of iPhone 5 order cuts

By , Jan 14, 2013

iPhone-5-Apple-Store-window-UTC-la-jolla

So Apple in a heartbeat dispatches its marketing honcho Phil Schiller to talk to a Chinese newspaper and kill the cheap iPhone chatter for fear the rumor might affect sales and yet the company remains completely mum on The Wall Street Journal article claiming iPhone 5 orders were cut in half amid what the author interpreted as a ‘weaker than expected’ demand.

It just doesn’t make sense, no? I mean, the first rumor hasn’t even had a chance to materially impact Apple’s business while the other sent shares below $500 in pre-market trading this morning. What’s going on here? Well, even if it wanted to, Apple couldn’t officially respond to the rumor. Blame it on the United States government and its rules of the game…

The well-connected blogger Jim Dalrymple explains:

I’ve been asked a lot today why Apple hasn’t responded to the Wall Street Journal article saying that there have been massive cuts to iPhone 5 orders. The simple fact is, they can’t.

SEC rules prohibit Apple from talking publicly about the company. This is known as a quiet period and all publicly traded companies must adhere to these rules.

As a result, The Wall Street Journal can blabber as much as it wants about iPhone 5 order cuts and quote the obligatory “people familiar with the matter” and there isn’t a lot Apple can do about it.

But what’s the ‘quiet period’?

According to SEC:

The federal securities laws do not define the term “quiet period,” which is also referred to as the “waiting period.” However, a quiet period extends from the time a company files a registration statement with the SEC until SEC staff declare the registration statement “effective.”

During that period, the federal securities laws limit what information a company and related parties can release to the public. The failure to comply with these restrictions generally is referred to as “gun-jumping.”

With the impending earnings call, Apple is now in its ‘quiet period’.

These rules obviously exist to prevent stock manipulation ahead of quarterly earnings.

Not everyone agrees.

MacRumors writer Eric Slivka opines on Twitter that “SEC rules have to do with companies seeking registration”.

 

Apple is set to deliver its fiscal 2013 first-quarter earnings next Wednesday, January 23.

iPhone 5 AnyStyle gold (BGR 001)
An iPhone 5 pimped with golden AnoStyle finish.

Be that as it may, multiple explanations have been given for the WSJ article, which appears to corroborat the vague, anonymously-sourced Nikkei newswire report. Nikkei was first with the claim that Apple halved first quarter orders for screens and other components for the iPhone 5.

Originally, Apple apparently was shooting for 65 million iPhones in the March quarter, but that impossibly high figure has been tossed around by a few overzealous analysts.

Mark Moskowitz of J.P. Morgan (via AppleInsider) dismissed the report as “not news”, characterizing it as “more noise” that will fuel an investor overreaction. And that’s precisely what institutional investors want, to buy AAPL dirt cheap.

Feel free to draw your own conclusions (hint: stock manipulation).

For conspiracy theorists out there: the Journal has updated its article to remove the 65 million units number, as noted by BGR:

Perhaps the weirdness of the math is why the current version of the WSJ article no longer cites the 65 million unit figure. Sometime between Sunday at 8:00 p.m. EST and Monday at 7:00 a.m., the Journal decided to drop the number from its article. But if the 65 million number is not right, is the estimate for halving March orders correct, either?

Another Apple pundit, John Gruber, makes a good point:

Apple’s stock took a beating today on these reports. If you don’t smell stock manipulation here, I have a bridge to sell you.

Question of the day: shouldn’t we also have rules in place preventing such blatant stock manipulation based on false and vaguely sourced newspaper articles?

iPhone 5 (black, front, EarPods, thumbnail)

Cody opined that the upcoming iPhone 5S revision, said to debut in late Q1 or early Q2 with new touch-on-display technology, could explain why Apple is reducing orders for the current-generation iPhone 5 screens.

Apple no longer needs iPhone 5 screens because the update model is entering production.

That’s a plausible explanation for sure.

And if the iPhone 5S entered trial production in December 2012, than Apple should be now winding down production of the current-gen iPhone as it starts ramping up the next-gen model.

There, Apple doomsayers, happy now?

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  • http://www.facebook.com/joe.jonsen Joe Jonsen

    my iphone 5 is an ipod touch for now

    • http://www.facebook.com/ledzeppelin96 Stanley Traub

      your iphone 5 is shit.. and always will be :P

      • charlie

        yeah need ti change to green robot

      • http://www.facebook.com/joe.jonsen Joe Jonsen

        you must ave smoked you lame android phone..lol

      • Kurt

        true dat…what phone do you have? i think you said you switched to galaxy sIII?

      • http://www.facebook.com/ledzeppelin96 Stanley Traub

        Yea im rocking gs3 and love it.

  • http://twitter.com/sivkai Siv

    Maybe Apple’s not responding because their sales actually are declining, and there’s nothing (positive) to say about it?

    • Obsidian71

      That would be easy to prove and the earnings call on the 23rd would speak more effectively to that. Apple just launched in China and sold 2 million iPhones over the launch weekend so it’s doubtful sales on a worldwide level are declining. This feels more like Wall St manipulation with perfect timing (Quiet period) in a couple of weeks things will be back to normal but those well connected will have profited heavily from the “pumping”

    • http://twitter.com/El_Barto_01 El Barto

      Apple stock is the most manipulated stock on the planet…so much money to be made, but don’t take my word for it just look at how it goes up and down and who benefits….too bad the government doesn’t do anything cause it is affecting the small investors…as far as iPhone sales, just gotta wait and see.

    • charlie

      you are right, bored with the old UI necer changed since 2007, look the android is super duper UI…How come wifi turn off mus be from setting??

  • jilex

    well, what we have is that anyone can say what they want, let’s see the number that apple presents (coming soon here on iDB) and then just accept it… because it’s apple… (sarcasm mode off)

  • LAGISSUEZ

    Because they are thinking of something clever to say.

    • charlie

      clever what ???ios is good os but, still needed computer for sync, look the android OS, all in one and did not need a computer for sync

  • http://twitter.com/El_Barto_01 El Barto

    I smell iPhone 5S in march…releases once a year hurt the sales, now every 6 months will get them more sales…specially to compete with the android phones that appear every hour in different configurations…but never trust “trusted” sources cause especulation is hat is making some billions what we all see and fight between who is right or wrong.

  • Winski

    It was BLATANT STOCK MANIPULATION by the WSJ and the Murdoch Klan that are working their best magic to control every market…

    • Kurt

      liberals control every market. they use, tv news, newspapers, universities, and hollywood. thats why apple went up to the prices they did. demo-crats are just pure evil scum

  • charlie

    android time