Market Overview

Apple Product Might be Declining in Popularity

Apple (NASDAQ: AAPL) has reportedly stopped ordering some components for its 13-inch MacBook Pro.

According to DigiTimes, Apple stopped placing new orders because the vendor has already obtained high inventory levels for the unspecified components. The suppliers in question (which were not specified either) do not know when Apple might request additional orders.

DigiTimes also noted that its sources say MacBook Pro component shipments are 20 percent short of Apple's original estimates. But since these same suppliers provide components to the 15-inch MacBook Pro as well, this should not have a huge impact on their businesses.

Even so, this is an unusual development for Apple. While it could be assumed that the company simply had a surplus of components, it might point to a larger problem at the Cupertino, California-based tech giant.

It is no secret that PC sales are on the decline this year. Most of the blame has been placed on a lack of exciting new products and the late arrival of Windows 8 (NASDAQ: MSFT), which was not released until October 26. But Windows partners like Dell (NASDAQ: DELL) and Hewlett-Packard (NYSE: HPQ) were not the only companies experiencing declines. Sales of new Apple notebooks declined by as much as seven percent in the third quarter.

When Apple updated the MacBook Air last summer, the company knocked $100 off the price of the 13-inch model, bringing the price down to $1,199. This was still somewhat more expensive than the cheaper Intel (NASDAQ: INTC) Ultrabooks, but it was a significant discount for an Apple product.

If sales had been consistently high, there is no way Apple would have lowered the price. Thus, the company must have experienced a decline or anticipated one -- or feared the potential of Windows 8, which was still forthcoming at the time of the price cut.

Apple reportedly surpassed its own internal expectations for sales of the 15-inch MacBook Pro with Retina Display. The device quickly sold out of Apple retail outlets when it was initially released and created a brief shortage on Apple.com.

It is possible that MacBook Air and the next-gen MacBook Pro have stolen the thunder of the 13-inch Pro model, which was once the company's most popular computer. Without any concrete data from Apple, it is hard to pinpoint the source of the decline.

Technically Apple may not be experiencing a "decline" in demand for the smaller MacBook Pro. Rather, the company may have simply expected the demand to rise once the upgraded models were released. This would explain why the company stopped ordering new components. Apple may have initially ordered more, assuming that the market would continue to grow. When that assumption did not pan out, the company was forced to stop ordering certain components.

Whatever the case, this report is not likely to have a major impact on Apple's share price. The company's value has been fluctuating on new product rumors and releases, most of which center on the prospects of a new television and the next line of iDevices.

Apple, which has declined more than 13 percent over the last three months, traded down nearly one percent Tuesday morning.

Follow me @LouisBedigianBZ

Posted-In: Apple Digitimes MacBook ProNews Rumors Retail Sales Tech Best of Benzinga

 

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