iPhone 6 rumor rollup for the week ending March 7

Apple rumors: Bigger screens through failure, massivity, A8 chips

The iOSphere overflowed with gratitude for the monumental failure, the colossal collapse, the flop, the fiasco, the disaster of the iPhone 5C because it has finally convinced Apple to give the iPhone 6 a screen larger than four inches.

Rarely has irrationality been suffused with such smugness.

Also this week, Apple is planning a “massive launch” for iPhone 6. Apparently the other iPhone launches were less than massive. New speculation emerged that the Apple A8 processor is being cranked out already and that Samsung isn’t doing the cranking.

+ Also on NetworkWorld: Hottest iPhone 6 design concepts

Finally, don’t expect the iPhone 6 before late summer, which of course extends this year to Sept. 23, and that means you can expect iPhone 6…during the same period that Apple has been announcing iPhones for years.

You read it here second.

One Solid Proof iPhone 6 Will Sport Big Display Panel on Release Date - The Monumental iPhone 5C Failure.

— headline at International Business Times for a post that regurgitates someone else’s blogpost, both of which insist on linking two alleged truths that are completely unrelated to each other.

iPhone 6 will have a bigger screen because of the iPhone 5C “fiasco”

Thank heavens for the iPhone 5C. Apparently, it’s been such a “failure” and “flop” and “fiasco” that Apple has come to its corporate senses and decided to build the iPhone 6 with a screen bigger than four inches.

This heretofore unknown dynamic was revealed first in yet another brief Digitimes post that cites a confusing mix of sources – “recent market rumors” and “Taiwan-based supply chain makers” – on the “below-expectations sales performance” and “inventory volumes” of iPhone 5C.

Here’s the opening: “Due to below-expectations sales performance, recent market rumors have indicated that iPhone 5c shipments drastically decreased at the end of 2013 and inventory volumes have built up to more than three million units, consisting of about two million units at ODM Pegatron Technology and over one million units in total with telecom carriers and distributors, according to Taiwan-based supply chain makers.”

It’s hard to evaluate these claims without knowing if an inventory of 3 million is unusual for either the six months that the iPhone 5C has been available or for any previous iPhone. Keep in mind that Apple sells tens of millions of iPhones every quarter. And keep in mind that inventories change constantly according to a range of variables.

The conclusion? “In the future, the sources believe Apple's miscalculation should help it adjust its smartphone strategy to release products with bigger screen sizes to satisfy user demand.”

This conclusion amounts to a non sequitur – it simply doesn’t follow from the premises. If the iPhone 5C’s 4-inch screen was the reason for allegedly low sales, one would expect that the iPhone 5S, which also has a 4-inch screen, would have likewise been affected. In fact, as Apple CEO Tim Cook explained in the January 2014 earnings call, demand for the 5S in its first three months of availability was higher than Apple had expected at least in North America.

The Digitimes story was the basis for a post by Erik Pineda at International Business Times with this spectacular headline: “One Solid Proof Phone 6 Will Sport Big Display Panel on Release Date - The Monumental iPhone 5C Failure.”

Pineda is certain that “the iPhone maker will surely take measures to correct the mistakes that attended the iPhone 5C” by creating a bigger-screened iPhone 6. “The object for Apple, of course, is to erase the blot created by the iPhone 5C fiasco and maintain its growth course amidst claims by research firms that the global smartphone is nearing the saturation point and Apple is not immune from the negative impact that the trend will bring,” Pineda concludes.

This isn’t the place to rehash the hysteria that greeted Cook’s carefully nuanced comments about the 5C demand and pricing at the earnings call. (You can find those comments by sifting through the Q&A portion of the call in this online transcript or see the summary in this post at The Verge.)

For Pineda’s reasoning to be correct, Apple would have launched the 5C last fall, concluded by early 2014 that it was a blot, fiasco, and monumental failure, identified the too-small screen as the cause of the failure, and decided to fix the fiasco by designing, manufacturing and distributing a larger-screened iPhone 6 to appear in the next six to nine months.

Only in an alternate universe that suspends reasons, the laws of science, and common sense could such a scenario even be imagined.

iPhone 6 will be a “massive launch”

The start of this meme was a typically brief, typically sketchy post at Digitimes, which simply summed up information posted in the Chinese-language Commercial Times.

“Foxconn Electronics is expected to land orders for 90 million units of the iPhone 6 from Apple in 2014, the Chinese-language Commercial Times cited data from Citigroup Global Markets as indicating,” according to Digitimes’ Steve Chen. There’s no link to the original story and The Rollup couldn’t find one based on a quick Internet search.

The Citigroup analyst is Wei Chen, and he apparently predicted that Apple’s smartphone shipments will rise 23% in 2014, compared to 13% in 2013, even as he predicts global smartphone shipments will slow to 28% growth, compared to 40% last year.

BGR’s Chris Smith was impressed. In his regurgitation of the Digitimes regurgitation he declared that “Apple is apparently getting ready for a massive iPhone 6 launch….Foxconn is expected to land orders for 90 million iPhone 6 units this year alone.”

“Assuming the 90 million iPhone 6 order is accurate, it may mean that Apple may launch the 2014 iOS smartphones a lot earlier than anticipated, just as other reports have recently claimed,” Smith declares.

Yet this only follows if one is making a bunch of unwarranted and unsupported assumptions, none of which are actually supported by the Digitimes post or its haiku-like references to the invisible Commercial Times story. It’s not even completely clear that Citigroup’s Chen is the source for both the projected growth data and for the claim the Apple has ordered 90 million iPhone 6 units.

Last year, in the October-January 2013 quarter, Apple sold 51 million iPhones – mainly iPhone 5S and 5C but also previous models still available. Apple has, allegedly, already ordered 90 million iPhone 6 units from Foxconn. Smith seems to be assuming that Apple is unlikely to nearly double iPhone sales in the October-December 2014 quarter. Therefore, to sell 90 million units in 2014, it will have to start selling them earlier.

Given how little we know about Apple’s supplier arrangements, including whatever changes it has made with regard to building the Next iPhone, and inventory practices, the sketchy Digitimes rehash doesn’t prove or even hint anything.

iPhone 6 processor won’t be made by Samsung

This rumor is a powerful example of the iOSphere’s deductive reasoning.

Its starting point is yet another Commercial Times story that in essence says contract chipmaker TSMC is cranking out Apple-designed A8 processors to be used in the iPhone 6. That story was picked up and summarized by the wire service Agence France Presse (AFP), and that story, if it can be called that, circulated widely in iOSphere repostings.

iDownloadBlog’s Christian Zibreg was one of the very few who posted multiple links to the sources: he linked to the Chinese original at Commercial Times to a Google Translate version of that post, for what it’s worth, and finally, to AFP’s wire service story

The translation result is, frankly, bewildering. Here’s the first paragraph: “Apple's next-generation smartphone iPhone 6 will advance to the outgoing Season 3 launch, according to industry sources the production chain, including the 20-nanometer A8 application processor, fingerprint sensors, mobile phone baseband chip, power management IC, LCD iPhone 6 built-in driver IC chip tapeout action has commenced in late February, TSMC (2330) almost scored Logic IC and power management IC foundry order to become the big winner, legal optimistic forecast second-quarter revenue has opportunity quarter by 20 to 25%.”

Got that?

The second paragraph is somewhat clearer but it begins with the credibility-killing formulation “it is understood that…”

“It is understood that the new iPhone 6 most special, one A8 application processor for the first time to import the latest TSMC 20-nanometer process, is expected to carry a quad-core 64-bit processor core and quad-core graphics processor core, and second, the screen may using more than 4.7-inch sapphire panel resolution is higher than the current iPhone uses the retina panel.”

But you get The Point, the Main Idea, the Whole Concept.

The Commercial Times never mentions Samsung, but the AFP rewrite does. Samsung has been the main supplier of Apple’s A series processors for years. And for years, speculation has been swirling, as they say, that Apple is just about, at any time, desperately, savagely trying to cut loose from its arch smartphone rival.

Or as AFP puts it, “Taiwan Semiconductor Manufacturing Co has started producing chips for Apple's next iPhone, a report said Wednesday, as speculation swirls that the US firm could be offloading rival Samsung as a supplier.”

BGR’s Smith didn’t hesitate to join the swirling, after seeing the AFP “report.” “Samsung has apparently been left mostly out of chip production, the [AFP] report hints, as TSMC has ‘won most of the manufacturing orders for logic and power management integrated chips for the new handset,’” Smith concludes

But AppleInsider interprets it all differently, and with more skepticism.

“The [Commercial Times] report suggests that TSMC has won ‘most’ of the orders for Apple's next mobile processor, said to be a quad-core CPU, taking business away from rival Samsung.”

AppleInsider’s post notes that “reports have suggested for years that the Taiwanese company would begin producing chips for the iPhone in the near future. To date, Samsung has produced all of the mobile CPUs for Apple's iPhone and iPad....”

Finally, “claims of a chip partnership between Apple and TSMC date back to 2012, and have been incorrectly linked to both the A6X and A7 processors, both of which were actually manufactured by Samsung in Austin, Tex.”

iPhone 6 will be released in late, not early, summer 2014

A post at StreetInsider brings speculation from Jefferies stock analyst Peter Misek that Apple will be forced to launch iPhone 6 in “late summer” rather than earlier, as it would like to.

Misek bases this on “our checks.” The inference being drawn is that he’s tight with insiders within Apple’s Asian supply chain.

“Those expecting an early iPhone 6 launch may be out of luck. Jefferies' Apple analyst Peter Misek said based on his checks a late summer iPhone 6 is now likely,” according to StreetInsider.

Misek is quoted as saying that “Our checks indicate Apple is trying to improve yields and cost down the On-Cell screens for the iPhone 6. Additionally, we believe Apple is working on significant modifications to the camera module processor and potentially a new co-processor alongside the M7 for biometrics and sensors related to health. We believe these modifications require more time and as a result a late summer launch is now more likely.”

At Benzinga.com, staff writer Kurt Zuschlag picked up on this, but led with a tweet from “famous market pundit Doug Kass” that could support or contradict Misek. Here’s the tweet from @DougKass: “High above the Alps my Gnome is hearing that the iPhone 6 launch will be this Summer.”

Kass is president of Seabreeze Partners Management, a hedge fund, where he’s described as “legendary hedge fund manager Doug Kass.” Last month, according to blogpost at the Wall Street Journal Kass said he had taken “a small short position” in stock-darling Tesla Motors. As the blog notes, “Short sellers borrow shares to sell them in hopes of buying them back cheaper at a later date, aiming to profit from a price decline.”

A website called PunditTracker scored Kass on his 2013 predictions, giving him an F grade, based on getting one right and 11 wrong. Our favorite: his prediction of “Signs of life are found on Mars in 2013,” which, alas, turned out to be "False."

John Cox covers wireless networking and mobile computing for Network World.http://twitter.com/johnwcoxnwwjohn_cox@nww.com




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