It's an interesting time for Apple investors. Even though the company's fiscal year in 2015 was its most profitable in history, shares of the company have remain compressed amid concerns that demand for the iPhone is weakening, slowly but surely.
Most recently, a report out of Japan surfaced indicating that Apple recently told its component suppliers to cut back on iPhone 6s production by about 30% for the January-March quarter. Though production is slated to pick back up shortly thereafter, the slightest hint of a dent in the iPhone's armor has a tendency to send investors and Wall Street into a panic.
Today, shares of Apple have been slumping quite heavily, with the stock now trading at near or at the $100 level. In fact, at one point today, shares of Apple fell below $100 for the first time since 2014.
Component suppliers that rode the iPhone’s boom are now bracing for lower sales. Apple has cut its order forecasts to iPhone suppliers in the past several months, according to three people familiar with the company’s supply chain.
Apple provides suppliers with projections on possible orders months in advance and makes adjustments over time, based on demand and inventory, according to suppliers.
So is this doom and gloom time for Apple? Well, we really have no way of knowing without first seeing how Apple's official iPhone sales figures measure up. It's also worth pointing out that reports of declining iPhone sales is a theme we've seen on and off for years now. And each time investors express concern, Apple has a tendency to surprise analysts come earnings season.
What's particularly bizarre is that Apple's current P/E ratio currently checks in at about 10.9, significantly lower than most every other big-name tech stock out there, including Google (P/E of 35), Amazon (P/E of 915) and Microsoft (P/E of 36).
While this seems a bit outlandish, it's worth noting that Apple has seemingly never been treated fairly by Wall Street. For reasons that defy explanation, Apple is traditionally and perpetually viewed as a company on the verge of collapse. Indeed, if you go back and look at the iPhone's short history, you'll see that analysts have been predicting 'peak iPhone' for years now.
The iPhone gravy train of course can't go on forever, but until we see cold hard data from Apple itself, it's hard to really take concerns over iPhone demand too seriously.