Mac Planet: In the offing

Opinion

It always interests me when a few tenuous rumours about Apple lead to wild speculation, often is ignited by two conflicting viewpoints: those who desperately wish for any signs of Apple failing; and Apple fans who perceive, from the vaguest of sketch of tea leaves, that something else they really want from Apple might be in the offing.

Earlier this week there were reports that Apple was cutting back on the number of iPhone 5 parts ordered. As usual, with any news like this, some people immediately decided Apple's sky was falling in: the iPhone 5 isn't popular anymore, and Samsung (along with other competitors) was about to exact revenge.

Samsung, having been through several stoushes against Apple, is doing pretty well: "Consumer buying intent for Samsung smartphones has been extraordinary to start the year. Considering the Galaxy S III has been out for several months we'd normally expect a slowdown by now - but it's still red-hot," said Paul Carton of 451 Research's ChangeWave service.

Perhaps you can't say the same about iPhone: after a couple of days, a report claimed Apple was simply adjusting the iPhone 5 supply chain because it was initially "too popular for Apple to sustain". In other words, it's no longer that popular. ChangeWave, however, claims one in two North American respondents who are planning to buy a smart phone in the next 90 days want iPhones. Significantly, the percentage planning to buy a Samsung smart phone in the next 90 days has soared from 13 per cent to 21 per cent. Good, but still not 50 per cent.

I personally don't hold any grudge against Samsung, by the way. I don't condone theft of patents and technology (and I'm not saying Samsung is guilty of either - let the courts decide), but any entity that can give Apple a run for its money has to be good for the market, and consumers, in general, as it means their products will have to come close to Apple's standards, and if they're cheaper, perhaps Apple will drop some of its complacency around how it operates.

Paul Semenza, senior vice president at market research firm DisplaySearch, told CNET "We started hearing indications of cutbacks before the new year. It was a very quick ramp up. The Q4 (estimate) was originally about 61 million displays (for the iPhone 5) ... that may be dialled back, but anything near that number is still huge. That would support the theory that the ramp was too much to sustain."

Shipments of the iPhone 5 in the first quarter of sales were far above initial sales of the iPhone 4S. Sales are now slowing, but they are still estimated to be in the range of 33 to 42 million. Not too bad, if you ask me. Besides, and much more sensibly, why would Apple ever expect to order components for 65 million iPhone 5s in the March quarter? It's always a 'soft' season.

Other speculation hinges around a 'new' iPhone already in the pipeline.

Obfuscating the issue was another rumour claiming Apple would release a 'cheap' iPhone. One has to assume this would mean 'cheap by comparison to other Apple products' rather than cheap in itself. This would also be Apple responding to the market, a charge levelled at the iPad mini. Apple rarely deigns to do this, at least in any obvious way, so to me this rumour belongs in the camp of 'what people want Apple to do' rather than something Apple might actually do. For me, the mythical (I'm not saying impossible) Apple Television also falls into this category, too. One has to admit that most 'smart' televisions available are pretty clunky, if not stupid. Apple could certainly do a better job. But I remain very sceptical.

Peter Misek, an analyst with Jefferies, reckons preliminary builds for the iPhone 5S will start in March for a launch in June/July. Misek also suggests Apple has constructed at least two prototypes for testing, and that one of them could be the less expensive iPhone which has been the subject of other recent (and also hopeful) rumours.

Misek believes this would be a "concentrated low-cost iPhone rather than a 'cheap' one." He even thinks he has the likely specs: polycarbonite case with 4-inch non-Retina display, no LTE.

My jury is out. Last year, Misek suggested that construction of an Apple television would begin in May/June 2012, and that five million units would hit the market in late 2012. That, obviously, didn't happen, but he was right with predictions for the iPhone 4S prior to its launch.

Another analyst, who I must admit I have little time for, is Gene Munster of Piper Jaffray. Munster has annually made predictions of massive Apple profits, then gets upset when they don't meet his expectations. Apple's profits are always pretty damn good, for the record. It just makes me suspect Munster has Apple shares. Anyway, Munster reckons a cheap iPhone would sell like crazy. I think he's crazy, and again sounds like someone making wishes for what he wants while, perhaps, trying to influence the market.

By now, most people know how Apple rolls. Apple doesn't care much about market share. It professes to care about making the best products that people will enjoy using, and for people like me, is eminently successful at it. Apple certainly also cares about making money from those products. It's pretty simple, really.

Daring Fireball's John Gruber (who will be in Wellington again for Webstock this year) makes the same point: Apple won't make a cheap piece of tech just to sell ten terrible products when it could sell three great ones instead.

For a high percentage of profit, I would add.

If Apple did make a 'cheap' version, it would signal a fundamental change at the top of Apple, against the firm's entire and longstanding ethos.

Anyway, all this speculation about Apple and what it might do with iPhone might also be impacting on iPhone 5 sales - it's hard to say. There's a roundup of all these rumours, by the way, on TUAW.

Then something appeared that made me guffaw. Yes, guffaw! Former Apple CEO John Sculley, who pretty much ran Apple into the ground in the 1990s meaning Steve Jobs had to be brought back to rescue it, says Apple must make a cheap iPhone to tackle emerging markets. His comments were made on a Bloomberg Television interview from Singapore.

He also said Apple's current CEO is "exactly the right leader" for Apple at this time thanks to his "supply chain expertise".

OK, now I am worried.