Foxconn Facing Display Shortages as it Struggles to Meet iPhone 6 and 6 Plus Demand

Gregintosh said:

They sold 9 million iPhones (of all types) in the opening weekend of the 5s launch.

20 million is doable but that would be all phones not just the Plus. Given that half or more want the smaller one that would assume the demand is there for 40-50 million total iPhones for launch weekend.

Ain't going to happen, though I'm sure it would be nice for their stock. Though if you're right, I will eat crow.

Though again keep in mind we have no idea how long they've been pre-manufacturering. Chances are Foxconn did less units daily last time and they got enough to sell 9 million. So given their increases in labor maybe they do have enough for 20+.

I don't think manufacturing started 25 days before launch (late August). I think it was more like June, and probably just shelved units to load OS when it was good mastered and box it.

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Oh, I wasn't specifically focused on launch day or even week. But I do believe that much demand is latent and is accessed once the lines die down and the shopping experience becomes more pleasant. Lots of people would prefer to do this sort of purchase in person, with a phone in hand, and then a sales person to confirm that you've got the right one or signed up for the right long term two year contract. Those people want the iPhone but they don't buy during the first two months because of the hassle and their nervousness of just doing this through the mail.

So when you look at the 9 million which sold during the launch weekend of 5s that is just a FRACTION of the actual demand for that phone that weekend. Those were people willing to wait on lines for hours or to get up at 3 a.m. to place a pre-order for a phone that (a) they had never touched and (b) they hadn't even read a review on or known anyone who had ever used one. Think what a filter a buying process like that is. There were many more millions, I would suggest, that knew the stores had nothing. Or were turned away from the stores. Or didn't want to fight a line.

So in the mythical world where Apple has all the phones it can sell available and the staff to process so that there are no lines and the websites offer two day delivery from when you order even if you wait until to order until after the reviews have come out, then yes the past sales numbers would be blown away. But maybe not quite as high as selling 20 million 6+ in the US in a weekend.

I doubt they were really doing serious scale manufacturing in June. They have to test those prototypes a long time. And also, if 100,000s are being made in June, then I don't see why fully put together leaks don't come out then instead of the process where they become more and more available in late August.

CL4W said:

I wonder how many 6+ devices they can really make in that 3-4 week waiting period? The demand outstripped the supply by a big margin, which again they should have expected because a lot people were jumping from Androids 5+" models.

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Yes, so what should they have done in your opinion? What would you have done? You or all the other people here who seem to think they are smarter than the Apple execs and who think they would be able to ensure that supply matches demand on launch day.

Sure, you could pay Foxconn to build a few more factories and set up twice as many production lines as what they have now. Then you do the same with every single one of your suppliers. They also all build additional factories. Everyone hires additional people to staff these factories and production lines. The suppliers have to also force their suppliers to do the same. Raw materials have to be hoarded long in advance to ensure the availability so that production can start immediately when the final designs are available roughly eight weeks before the targeted launch date. Then the production begins. So you start renting warehouses everywhere to store all the parts and the finished products which are piling up in huge numbers. Then finally the launch day is here. Everyone gets the phone they preordered on the first day. Great! Demand remains high for a couple of months, so you can keep producing at a brisk pace. Then demand suddenly drops, because... well, surprise, demand for every product drops sooner or later. Now you can close 60% of the production lines and kick out the people who staffed them. Oh, and yes, your suppliers will of course have to do the same. Their suppliers too. But... hey... wait! Now you have all those empty factories filled with expensive production lines with expensive machines - some of them tailor-made specifically for your phone. What about that investment? Well, you just write it off. After all, the important thing was to meet launch day demand. Which made you a lot of additional money. What? It didn't? You actually made less money due to having to invest into those factories which are now useless? All that warehouse space was damn expensive? Your suppliers are asking you what they are supposed to do with their empty factories now? They jacked up their prices to make up for the huge investments they had to make to expand production capabilities? The press is complaining about how your company is causing the combined layoff of 1 million people in China? What? Turns out you are not such a genius after all? Turns out you don't actually understand supply chain management better than Tim Cook? Well, hey, I am shocked!

Here's an idea; why don't Apple use some of their enormous cash reserve to invest in a US manufacturing facility (or multiple ones) which can meet or exceed demand, give American people jobs and provide a huge boost to the economy, rather than using a manufacturing partner who are proven to have paid their staff an such an insultingly-low wage to the extent where they have to resort to leaking parts/specs to get a reasonable income, and have had to install nets on the side of their factories to stop its poverty-stricken workers from jumping off. Problems solved.

And before you accuse me of being patriotic...blah blah blah, I'm British and have no US interests whatsoever.

AaronM5670 said:

Here's an idea; why don't Apple use some of their enormous cash reserve to invest in a US manufacturing facility (or multiple ones) which can meet or exceed demand, give American people jobs and provide a huge boost to the economy, rather than using a manufacturing partner who are proven to have paid their staff an such an insultingly-low wage to the extent where they have to resort to leaking parts/specs to get a reasonable income, and have had to install nets on the side of their factories to stop its poverty-stricken workers from jumping off. Problems solved.

And before you accuse me of being patriotic...blah blah blah, I'm British and have no US interests whatsoever.

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Oh lawd. Zzzzz They do.. it's called Mac Pro. From what you have written.. you are too simple to understand why not anything.

AaronM5670 said:

Here's an idea; why don't Apple use some of their enormous cash reserve to invest in a US manufacturing facility (or multiple ones) which can meet or exceed demand, give American people jobs and provide a huge boost to the economy, rather than using a manufacturing partner who are proven to have paid their staff an such an insultingly-low wage to the extent where they have to resort to leaking parts/specs to get a reasonable income, and have had to install nets on the side of their factories to stop its poverty-stricken workers from jumping off. Problems solved.

And before you accuse me of being patriotic...blah blah blah, I'm British and have no US interests whatsoever.

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They did; that would be the Mac Pro factory.

Nice spin on stealing from your employer too.

OatmealRocks said:

Oh lawd. Zzzzz They do.. it's called Mac Pro. From what you have written.. you are too simple to understand why not anything.

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Thanks, just for giving my opinion, I've immediately been slaughtered; do you have nothing better to do than slaughter internet users for doing so?

As you so clearly have a doctorate in Economics, please construe for my "simple" brain a little!

burgundyyears said:

They did; that would be the Mac Pro factory.

Nice spin on stealing from your employer too.

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I know they did. But the Mac Pro doesn't shift anywhere near as many units as the iPhone, so there is less opportunity for these so called publicity stunts.. ahem ..'part shortages' to occur.

TallManNY said:

I doubt they were really doing serious scale manufacturing in June.

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The gate is iOS 8, which has to be installed on all the phones at some point.

Keirasplace said:

No company on earth would do that. So, this is totally imaginary. They don't need to create shortage, there will be by the very fact that can't start production 6 months in advance to make sure they have enough to cover all orders until the end of december.

Companies usually don't like to have tens of billions of assets lying around in storage. Not to mention this would cut short their R&D time for all the parts and software.

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It's a happy side effect. I agree with you; if they could have 20 million (estimated demand for day 1 - SWAG) of them on day 1, I would be happy (I'm a stockholder, and cash in the till > stock in the warehouse). Since they can't have that, having a line of people at the store is happy consequence.

"Hey, what's that?"
"That's the line of people waiting for the new iPhone."
"WOW! It must be great! Why would people wait from something yucky?"

Coreless apples said:

I remember when I received my black iphone 5 at launch and all I remember noticing is all the blemishes and scuffs I had on my phone upon unboxing. I'd rather them take their time and not overwhelm the people who are behind building these beautiful devices.

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Same here. I remember the one I got had scuffs all over the chamfered edges. Luckily for the me phone wouldn't even power on with the power adapter plugged in. Verizon swapped it right out for me and I landed one that had a 2 inch scratch down the middle of the back. It was the Verizon employee that saw it. He immediately went to get another one and it ended up being okay. But I remember talking to an apple genius a few weeks after the launch and while it wasn't a super high amount that were being returned, it was enough that Apple knew it was a problem and enforced strict QC on the assembly lines.

usarioclave said:

The gate is iOS 8, which has to be installed on all the phones at some point.

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Yeah, but they can get everything together and then its much quicker to process units that just need OS installed (its not like they hook each one up to a computer and manually do it click by click, I am sure they have machines where once a person physically hooks it up the machine knows what to do next or something close to it).

So they could have been stock piling the hardware and when iOS hit the daily output numbers could have been much larger than the norm since all that was needed was OS install and final boxing versus entire assembly.

I believe even on this site something to that effect was rumored if not for this release than in years past.

And it makes sense all around.

MentalFloss said:

Yes, so what should they have done in your opinion? What would you have done? You or all the other people here who seem to think they are smarter than the Apple execs and who think they would be able to ensure that supply matches demand on launch day.

Sure, you could pay Foxconn to build a few more factories and set up twice as many production lines as what they have now. Then you do the same with...

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I agree with what you said, that it doesn't make sense to front load all production into one big hump to meet 100% of launch demand.

What can happen though is through a combination of stock piling units early and renting out temporary space for certain steps that don't require custom manufacturing hardware Apple can (and probably does) front load a lot of production anyway.

That is why some companies are having a hard time booking assembly lines or materials and so on, because they are temporarily all bought up by Apple and will be released shortly as the regular ongoing production continues versus the launch rush going on now.

The way that works from a business standpoint is you book everything on a temp basis and pay a bit of a premium so that those companies put their existing clients on hold or use existing extra capacity to pitch in.

Temporary work forces are a normal phenomena in the industry (Christmas season we see that here at retail or customer facing positions every year). I am sure Apple (or any other company for that matter) does not put much consideration into ensuring people keep year round jobs. If they need 1 million people to temporarily pitch in for a few months that's what they will do.

Also people who think thats wrong or immoral in some way should consider that the amount of work is the same. Meaning you can give 1 million jobs out for 2 months to help with demand or you can give 200,000 jobs to people for 10 months. In one decision more people get something at least for a while, in the other more people are left out with nothing while a few get stability for 10 months. I don't think either one is inherently more or less moral. In both cases, the people aren't "entitled" to any jobs at all so whoever is assisted by Apple in making a living should be grateful for any opportunity at all.

I am sure Apple already uses all available options to it and it is impressive then can go from 0 to 10+ million units shipped to customers hands inside of a 45 to 60 day window.

Just wait until all of the fan boys start returning the 6 pluses, they bought because they thought it was the "elite" model (and the only reason). They will return it either because it's too big, or because they dropped it, because it was too big.


They are also the same people that said "the 5.5" doesn't exist, and that the 4.6", will be wayyyy too big, and wished Apple would make another 4 " phone.

Apple LOVES you!

apple has been sucky company as of late...wth happened to them?

bbeagle said:

The iPhone 5 slides perfectly in the console beneath the radio in my car. The iPhone 6 might, the iPhone 6 plus definitely won't. Small is better sometimes.

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Exactly - smart phones should be smaller the better, that was the whole thing about the original iphones right? If I want a larger screen I'd like the ipad mini retina to be optimized to be part phone part tablet / laptop octacore baby!

Wifi should be everywhere more secure and offered as an alternative to data for 10 bux or less a month


Love you all!

koban4max said:

apple has been sucky company as of late...wth happened to them?

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Your comments aren't any better. What is your point?

MH01 said:

Sounds like a routine apple launch. Demands just gets bigger.

Shocking news would be, "Apple fulfils demand for new iphone at launch"

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I bet if that happened, some people, no, major tabloids, no, worldwide news will report:

Apple is doom, iPhone demands is so low that Apple is able to fulfil the demands at launch.

usarioclave said:

The gate is iOS 8, which has to be installed on all the phones at some point.

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I'm not following the iOS 8 betas this year, but don't we know pretty much within less than a few days when iOS 8 when GM so that it could be flashed to the phones? We certainly know when the last beta before GM came out. So we know Apple didn't have the GM at that point.

peterdevries said:

Your comments aren't any better. What is your point?

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my point is..if you don't know my point..don't bother to respond.

How can there be a shortage of 5.5" FullHD displays, when all of the competition has already moved to qHD in those sizes?

It happens every year

Merry Xmas...

(wow, i should really check my emails)

T-R-S said:

Do you really want to pay $3000.00 for an iPhone?
or go to work in Foxconn Factory for $20./ a day?

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You really believe that is the only outcome?

Outcome 1 - Apple manufactures in US and raises the price.

Outcome 2 - Apple manufactures in US, sells at same price and makes less profits, but raises jobs for American citizens.

Outcome 3 - Apple manufactures in China, same concept followed by all US corporations, US becomes a basket-case economy and fades away as a has-been great power, all because its people wanted cheaper e-toys (bread and circuses).

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matthew23 said:

Who brought this wet blanket?

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Canary in the coal mine - often dismissed as wet blankets.

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Michaelgtrusa said:

I'm with you here as many here and all over the US can't see what has happened to the US and who's behind it. What did the founders fight for? the very thing that's happening now, trillions of dollars of infrastructure move to a totalitarian system based on the British system that controls the US economy, the debt is fake, the true is more like 1 billion. China has no technology, china is a technology transfer including military tech. Those hi tech jobs would send trillions through the US tax base.

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Soon when China matches the U.S. in aircraft carrier tech, ICBM's, tactical fighter superiority etc - the American people will wonder how they caught up so fast. Duhhhh, do you think the outsourcing of production is not also transferring technology?

In the history of the world, one nation starts off with the weapons tech, e.g. bronze swords, iron swords, but eventually other nations find the technology. The U.S. is giving up its tech superiority by shipping it overseas, all for the sake of greed of a few more dollars. It sad, really.

gnasher729 said:

That's not how it works.

They could be working 24/7. 168 hours a week. 4 workers each working 42 hour weekly shifts. So at any point in time, only 50,000 are working. Number goes up to 10.8 phones in one person's working day.

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Nope, your math is bad. Unless you are actually claiming that the first shift of the day makes 540000 phones while the rest just kick back and do nothing at all.

Otherwise: 10.8 (rate) x 50000 (workers in shift) x 4 (number of shifts) = 2.16 million phones / day.

Apple has been doing this for 7 years. They know by now how demand is out there. Therefore they should produce enough before selling them.

Or maybe apple just puts sfuff like this out there just to create more demand. Its kinda hard for me to believe they didn't produce enough iphones to meet the demand.

koban4max said:

apple has been sucky company as of late...wth happened to them?

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By listening to their customers and giving them what they want they suck? Really?

Michael Goff said:

By listening to their customers and giving them what they want they suck? Really?

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try stock category.