he says, remains robust. He attributes the reports of lower orders to shifts to other suppliers and an improvement in production, which means fewer components are wasted while building the complicated phone.
Apple usually reports the number of iPhones it sells each quarter, so Wednesday's financial update should give investors some indication of where the company is heading. Analysts on average expect the company to show sales of 48 million iPhones, which compares with the 37 million it sold in the same period a year prior.
The wrinkle is that Apple doesn't break out how many iPhones it sells of each type - it has kept selling the cheaper, two-year-old iPhone 4 and last year's 4S alongside the flagship 5.
A key tenet among investors who remain optimistic about Apple: Although the iPhone 5 is too expensive, buyers will shift their attention to the older Apple phones, which they find "good enough.''
Analyst Andy Hargreaves at Pacific Crest Securities says demand for new iPhone models is going to falter. Last week, he downgraded Apple's stock from "Outperform'' to "Sector Perform'' because he believes consumers aren't going to clamor for new hardware features anymore. They'll hang on to older phones longer, and when they buy, they'll buy cheaper models, he says.
This means the total dollar value of the iPhones sold in the quarter may be more indicative than the number of phones sold. Analysts expect the sales were worth $30.8 billion in the quarter, or 56 percent of Apple's overall revenue. Deviations from this figure could cause big movements in the stock price.
There is renewed speculation that Apple could make a cheaper iPhone for the developing world, but most analysts believe the company will stick to its practice of keeping older iPhones in production and cutting their prices as new models come out. The problem is that the price cuts are relatively minor. A two-year-old iPhone 4 costs more than many new Android phones.
When reporting results for the July to September quarter three months ago, Apple shocked Wall Street by saying it expected earnings of just $11.75 per share for the October to December quarter. The company usually lowballs its estimates, but this was unusually far from the $15.59 per share average analyst estimate at the time. The reason, Apple said, was that it had so many new products coming out - including the iPhone 5 and iPad Mini - and fresh production lines are