Every time Apple is expected to roll out a product, the sales of the earlier model of that product significantly declines. This is because users start anticipating the release of the new device and want to buy the newer version rather than the earlier versions. This is precisely what is happening to iPhone sales right now.
According to Sterne Agee analyst Shaw Wu, the overall orders for iPhone have significantly dropped by 20 to 25 percent recently. This is happening nearly at the same time when Apple is rumored to be ramping up the production of iPhone 5. In light of these estimates, while Apple was able to ship out 35.1 million iPhone units during the March quarter, it may be able to sell only 26 to 28 million units during this quarter.
However, the sales may be ramped up again, and by huge proportions, once Apple goes forth with the release of the new iPhone during the last quarter. According to Wu, “From our understanding, the reason for the reduction is not demand related but rather due to the upcoming 6th generation iPhone refresh likely in the September-October timeframe.”
Wu also commented on Apple’s policy of being careful not to outdo the demand by having the suppliers create extra units, “It appears AAPL is opting to be conservative with its suppliers to factor in a potential 2-quarter pause ahead of the refresh and also to manage inventory.”
Conventionally, Apple register lower than usual sales during the quarter just before the release of the next iPhone model. This is what happened last year and this is precisely what is expected to happen this year. That shouldn’t come as a surprise since all the users who would have paused would rather go buy the new iPhone when it hits the shelves.