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Analyst Says Perhaps Millions of iPhone 5 Pre-Orders Still in Transit, Not Included in Announced Sales
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A prediction about a prediction LOL
But there could be a lot of people whose orders are still processing (i.e not shipped) and I would assume Apple can't count those as sales because the customer has the opportunity to back out of the sale right up until the point th device ships.
AHA!
Nothing more than collusion to affect (drop) stock price. I'm VERY curious if the original analyst that reported 6million + estimate bought more Apple shares since the $15US drop this morning.
Nothing more than collusion to affect (drop) stock price. I'm VERY curious if the original analyst that reported 6million + estimate bought more Apple shares since the $15US drop this morning.
Sell AAPL
This correction makes absolutely no sense for two reasons:
* just like this year, not all pre-ordered iPhones were delivered on the first day last year which makes 4 to 5 million units comparisons fair
* these analysts knew all to well that not all pre-ordered phones will be delivered on the first day. They actually trumpeted the fact that first day delivery preorders were sold out in one hours.
This correction makes absolutely no sense for two reasons:
* just like this year, not all pre-ordered iPhones were delivered on the first day last year which makes 4 to 5 million units comparisons fair
* these analysts knew all to well that not all pre-ordered phones will be delivered on the first day. They actually trumpeted the fact that first day delivery preorders were sold out in one hours.
I believe the 5M number is light because every store I went to in the Minneapolis area this weekend was sold out. I went to Apple stores, AT&T and Verizon stores and none of them had any models in stock. At the Verizon store they told me they sold out by 9AM on Friday morning. If this was an issue of less demand wouldn't there be phones available in stores? And why would Apple's website (and Verizon too) show 3-4 weeks shipping estimate, and AT&T with 12-21 days?
This has been Apple's accounting practice for quite a while. It doesn't recognize revenue from online sales to customers until those customers receive the product. From Apple's 2011 10-K:
Less than the 4S?
It's weird that they think there are constraints on the 5 compared to the 4s.
I was in Radio Shack on Sunday to buy unrelated parts. While waiting in line another customer asked if they would have the 5. The employee held up the box to one he was activating and told them they had all of them. With the 4s I was trying to get some for my family and no one had ANY for 4-6 weeks. I had to order all of theirs through Apple. And I'm in a suburb of Washington DC, it's not like we have a small population.
It's weird that they think there are constraints on the 5 compared to the 4s.
I was in Radio Shack on Sunday to buy unrelated parts. While waiting in line another customer asked if they would have the 5. The employee held up the box to one he was activating and told them they had all of them. With the 4s I was trying to get some for my family and no one had ANY for 4-6 weeks. I had to order all of theirs through Apple. And I'm in a suburb of Washington DC, it's not like we have a small population.
I was at Chicago Apple stores Saturday around Noon and they had both non-colors and both carriers in stock.
Pretty clear that Apple has ramped up their production facilities and are building 10s of thousands per day.
I missed the pre-order sellout by 3 minutes, first order didn't get in until 12:56 on 9/14, second at 1:03. I ordered a third phone from A T & T at 10 am on 9/14.
That was 10 days ago and Apple has been cranking them out day and night.
All 3 phones will be delivered today.
Manufacturing capacity isn't something that can be enhanced overnight and Apple has certainly been adding capacity.
Perhaps Brazil will be one of the places that Foxconn will will continue to expand its Apple production into?
Officially in the US in a few weeks. Unofficially, you can buy an AT&T model "device only" and it will be unlocked. That's what I did on Saturday. The Verizon model, whether on contract or off contract, also appears to be unlocked for GSM.
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That's one store. However, the AT&T stores around here in NYC were pretty much out of stock and had no idea when more were coming in. I got lucky and snagged one at Grand Central Saturday afternoon a few minutes after a shipment came in, but earlier that day they were turning people away saying that they had sold out of the AT&T model.
In general supplies appeared tight.
Each launch they make more of each item and launch to more countries simultaneously. They're also changing or adding supplier partners on key items. It's impossible to have a 100% flawless supply chain with the scope of work they're doing.
Even right now the riots at the Foxconn facility could negatively impact iPhone 5 production and that is out of Apples control.
This year 5 million people in multiple countries received a new item. That's impressive. More people are still waiting.
What other type of product has the same demand with the same fulfill rate? Only thing I can think of is software, but pressing a disc and boxing it or uploading to a server for customers to download is a far less complex supply chain than manufacturing a physical only device that has to ship worldwide after being assembled with parts from multiple suppliers.
Short answer, Apple can't fix the distribution problems. Apple does everything it can to meet consumer demand, but consumer demand always out reaches Apples capacity. What Apple already does is impressive.
Some retail channels dry up quicker than others.
Based on what I saw I could say no stores around me had the iPhone 5 available. That's an assumption based on what I saw over the weekend, not an accurate representation based on polling each retailer in my area. I'm sure there were some stores that had some because they didn't sell or got a second shipment in.
This is just the analysts covering their asses.....
"Well, I said 10 million, but because it was only 5mil, here are all the excuses I can come up with as to why I was so off and so wrong."
Analysts are fools who never seem to get it right.
Ethan
"Well, I said 10 million, but because it was only 5mil, here are all the excuses I can come up with as to why I was so off and so wrong."
Analysts are fools who never seem to get it right.
Ethan
What would you say if your boss asked you to produce 1/2 of your annual output in less than a month? It's not financially feasible to equip a manufacturing plant with people, equipment, and supplies needed for that one crazy month, and then lay-off 3/4 of the people and have the plant run at 1/4 capacity the rest of the year.
It's what resulted in their miss in the July earnings. Basically, the quarter ending in April had seen 35 million shipments and the drop to 26 in the quarter ending July was in part because of overstock.
Retailers simply made less orders and kept selling the old stock from the earlier quarter, resulting in that drastic QtoQ drop in shipments.
THey actually make more money by selling out and selling fewer phones. Because their production line is sized for the normal demand which will go way down in a few weeks and then remain steady. So in order not to sell out Apple would have to run the production line but place the phones in storage. This means. Weeks of paying to build phones and zero income plus the cost to store the phones the double the transportation costs. It is much cheaper to not store the phones and better to get paid days after the phone is built.
So Apple only builds and stores "enough" phones so that first week sales can look good and no more.