Although there seems to be no argument about the cuts themselves -- that they in fact took place -- the reason for the cuts are the problem. Some have speculated that the cuts in the components were made because iPhone 5 demand was lower than expected.
I know there’s been lots of rumors about order cuts and so forth. I would suggest it’s good to question the accuracy of any kind of rumor about build plans, and even if a particular data point were factual, it would be impossible to interpret that data point for what it means for our overall business.It was a somewhat vague statement. Cook didn't explicitly say something like "There is no iPhone 5 demand problem. Can't you tell by looking at our numbers?" What he was saying, though, is that a report of component cuts doesn't necessarily mean there is a demand problem.
In fact, in another part of the call, Cook mentioned that the iPhone 5 was “very constrained for much of the quarter,” meaning that Apple was having difficulty keeping up with demand for much, but not the entire quarter.
Interestingly enough, Cook added that "the iPhone 4 was in constraint for the entire quarter." That means that Apple's two-generation old iPhone 4 was still in extreme demand, and Apple had difficulty meeting demand for the entire quarter.
That iPhone 4 is interesting for another reason. There are a lot of rumors about a possible lower-cost iPhone. The iPhone 4 is free under contract in the U.S. and costs $450 sans contract, compared to the $650 price for a no-contract iPhone 5.
Compare that to Google's Nexus 4, though, which runs between $299 and $349 sans contract.
That price point should be -- at least -- the one Apple targets, if if puts out a lower-cost iPhone.