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

[mdlooker]

There's just no way to meet a world demand with limited manufacturing facilities, simple as that.

If they want to meet the demand, such secrecy and close flash-to-bang final decision to production will ABSOLUTELY cause issues.

 

[aziatiklover]

Every year is the same. When are they gonna get better with their billion dollars profits?

 

[kerrikins]

Every year is the same. When are they gonna get better with their billion dollars profits?

Every year they also have more pre-orders and more demand than ever before. It's not as easy as it seems.

 

[OatmealRocks]

Do you have any factual evidence for this besides the fact that the products are scarce at launch?

If this were indeed a game, why does Apple do staggered releases in countries?

You don't actually believe him do you? Factory is at capacity.. much better than last year (twice the demand).. so they have made improvements as far as I am concern. However people here are immature expect everything NOW NOW NOW. Can't really explain manufacturing lines, logistics and balancing demand while not investing too much in machinery and labor when the 'initial demand' is down. Would kill their profit margin.

 

[T-R-S]

Imagine if Apple assembled the iPhone in the U.S.

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

 

[OatmealRocks]

Every year they also have more pre-orders and more demand than ever before. It's not as easy as it seems.

Exactly but everyone here is an armchair CEOs who can solve all problems.

 

[TallManNY]

That may be true but that 20 million will be split between the two phones, and not all 20 million will line up on launch day (unless you think each Apple store will get an average of 75,000 people lining up around the block... Though I never did see estimates or data on people lining up before).

What this means is that if you line up even just a few hours early your chances are good of getting one especially if you're buying for a less popular carrier in your area, where as if you just turn up at 5 PM they may be all gone.

I was saying 20 million just for the plus, which is what seems to be in short supply. I suspect the 6 to sell many more times that number. And this is in the US only that we are talking about.

If you are just going to a carrier on launch day, I think you had better be one of the first few people in line or they won't have a phone. I'm sure that all phones will be sold out well before 5 p.m. at any of the carrier stores.

 

[aziatiklover]

Every year they also have more pre-orders and more demand than ever before. It's not as easy as it seems.

And they get more profits aka money rite m8? get more money and don't invest for the next year wave? Doing it wrong to me.

 

[TallManNY]

It's already happening.

Yes, but Foxconn is also continuing to hire more and more people.

 

[OatmealRocks]

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

The very same people who complain in these threads would complain even more because they realize their 'genius' idea would essentially kill the company. Something would give.. and since it can't be the quality of the product in anyway or the delivery of the product in a timely fashion. We would now have $5000 iPhones and a whole new slew of issues they will complain about.

MANUFACTURE IN USA?

But hey man labor ain't cheap in MERICAAA. well labor would we cheap in comparison of the TOWN they would have to build to MOVE the labor in the town they want to live in (with acceptable wage), build the factories that house the manufacturing lines that exceed the competency and capacity of Foxconn (good luck). All while having all the raw materials running smoothly to and from these towns in a transportation infrastructure that is easy access to shipping ports. Also now the vessels will now ALL go to USA since its in China or surrounding countries who have streamlines all of these processes for 40+ years.

But don't worry. People here will understand there will be no hiccup in production and delivery since Apple will do this in tandem and within the near future. How's next Spring?

 

[b_scott]

Macrumors could run this same story every year and just change the year and model numbers.

 

[OatmealRocks]

Yes, but Foxconn is also continuing to hire more and more people.

Yes because maybe for certain tasks the ROI is more favorable to use human labor.

I can't expect the machines to be cheap and the yield on these machines match the generous labor pool they have access to.

 

[usarioclave]

There's just no way to meet a world demand with limited manufacturing facilities, simple as that.

If they want to meet the demand, such secrecy and close flash-to-bang final decision to production will ABSOLUTELY cause issues.

Actually, you don't understand logistics. FoxConn doesn't have "limited manufacturing facilities." Apple/FoxConn probably has the largest production lines in the world churning out iPhones as fast as possible.

Secrecy isn't the problem, obviously, since everyone knew what was coming out on the iPhone side.

Each step in the assembly takes time, and realistically you can only do so many things in parallel before you start running into bottlenecks. There are only so many loading docks attached to a building. Sure you can build more docks, but then you have a problem when an upstream supplier can't make enough of their part to keep the pipeline flowing. There are lots and lots of upstream suppliers involved.

Coordinating all that is a full-time job for a whole lot of people. Don't forget billing, invoicing, inventory, trucking, and the inevitable cash flow issues associated with moving all that stuff around.

An example of why you don't get it: you can't get 9 women together and have a baby in a month. It doesn't work that way.

 

[mdlooker]

Exactly but everyone here is an armchair CEOs who can solve all problems.

Let me give a shot of this armchair CEOism, hmm... Have R&D hit hard, as I'm sure they always have, make a decision on the final product months in advance, "somehow" have more than one manufacturing facility mass producing, then have enough product to cover the demand. But that's in a perfect world of which we are not.

Plus supply drives demand in much of a case. So it's extremely difficult and I believe Apple is doing the best they can.

 

[TallManNY]

There is no solution. This is how they want it. Every news channel across the globe will be covering the huge lines and talking about how "you can't get the iPhone 6 if you wanted it". All TONS of free advertising for Apple.

If you think a company as big as apple couldn't hire another company to help foxconn manufacturer 50% more phones, you're crazy. They could. They're making less than 10% more than they did for the 5 and 5S. They knew this would sell more and they knew how many they were making. It's ingenious. Not many companies can pull it off because they don't have the following that apple does, but Apple pulls it off, time and time again.

Think about it. They can throw 3 billion at beats to acquire them...they can make more than 10 million iPhones in the timeframe they had if they wanted.

No. You can't just find companies with the size and sophistication of manufacturing as Foxconn. And as you add more manufacturers you get more leaks and it takes longer to make sure both do a good job, as well as an identical job.
Finally, even if you spent money and ramped up. What would you do with this extra manufacturing in January once the initial demand is largely satisfied? It will cost a lot to reserve this mythical additional giant sophisticated manufacturer for four months and then let them go entirely until next year.

And as you say, the marketing advantages are the second edge of this double edged sword. The marketing is good for Apple. But to suggest that Apple manages their supply line in some artificial manner toward these shortages is not true. It is just the natural result of (a) seriously high demand and (b) the two year upgrade contracts in the US which got many of Apple consumers on a two year upgrade cycle.

 

[vannibombonato]

And they get more profits aka money rite m8? get more money and don't invest for the next year wave? Doing it wrong to me.

Genius,
maybe you don't realize that if you build capacity that can fully meet the 100 amount that is needed for the first 4 weeks, then you're going to lose loads of money for the remaining 48 when you need 50, then 40, then 30, etc.

But i guess you manage a supply chain able to fullfill some millions of order per day...and able to adapt by the millions by the day.

Genius.

 

[JAT]

It is mind boggling how people keep claiming Apple is restricting quantities to increase demand... and selling more devices year over year at launch.

It's not nearly as boggling if you just assume most people are idiots.

 

[OatmealRocks]

Genius,
maybe you don't realize that if you build capacity that can fully meet the 100 amount that is needed for the first 4 weeks, then you're going to lose loads of money for the remaining 48 when you need 50, then 40, then 30, etc.

But i guess you manage a supply chain able to fullfill some millions of order per day...and able to adapt by the millions by the day.

Genius.

For this guy probably use explosives and insurance claim if he wants to maintain the profit margin.

What people here fail to realize is the fact, if anything they should consider Apple being essentially the industry leader in every facet of their business have at worst considered all their brain farts people have suggested and they know what they are doing much better than some bozo on this forum.

 

[JAT]

bingo, not many other companies can tell their customer that will be 3-4 weeks without fear of losing them to the competition

Are you kidding?! That happens all the time. Every day.

You guys really don't seem to understand anything about large business endeavors.

 

[OatmealRocks]

Let me give a shot of this armchair CEOism, hmm... Have R&D hit hard, as I'm sure they always have, make a decision on the final product months in advance, "somehow" have more than one manufacturing facility mass producing, then have enough product to cover the demand. But that's in a perfect world of which we are not.

Plus supply drives demand in much of a case. So it's extremely difficult and I believe Apple is doing the best they can.

ahh basically..yah.

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Are you kidding?! That happens all the time. Every day.

You guys really don't seem to understand anything about large business endeavors.

They don't.. don't know if this is cultural or a certain type of generation. Either way I welcome them to reality and the real world. Hope they are as 'strong' willed behind the anonymity of the computer as they are in the real world. It would be a cite to see and they would be a laughing stock.

 

[Solarioc]

It always amazes me that EVERY SINGLE YEAR this type of event happens, every single one. On one hand, if Apple were to produce too many iphones it would eat into their bottom line with storage, and expenditures on materials. On the other hand, which is whats happening now is that there isnt enough, which is worse than the first option. I dont understand why they cannot figure out by now that Holiday season is upon us, and just the general nature of releasing a new device WILL make the supply dry up quick.

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.

Same old story...

The second option is greatly intended. Apple is a company that has the ability to control the market by the amount of product they have. Their product is so much better than others that customers will wait 4 weeks for something instead of buying say a note 4 believe me if Apple truly wanted every person and their dog to have a phone it would happen.

 

[Gregintosh]

I was saying 20 million just for the plus, which is what seems to be in short supply. I suspect the 6 to sell many more times that number. And this is in the US only that we are talking about.

If you are just going to a carrier on launch day, I think you had better be one of the first few people in line or they won't have a phone. I'm sure that all phones will be sold out well before 5 p.m. at any of the carrier stores.

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.

 

[eldo33]

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

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

yah...this news get OLD every year. it's a purpose to get headline when it doesn't need to.

 

[tann]

540,000 units a day. 200,000 workers.
That's 2.7 iPhones a day quota per person.
Doesn't sound like a very efficient assembly line to me.

It's probably at least double... Even in China I doubt they have 200k workers working 24/7 for months at a time

 

[MentalFloss]

bingo, not many other companies can tell their customer that will be 3-4 weeks without fear of losing them to the competition

What?? Samsung announced the Galaxy Note 4 on Sep 3, and it will be in the hands of the first customers one month later. That's over 4 weeks.

It is a completely common thing that companies announce products, and it takes weeks or even months for those products to actually appear in stores. In fact, I can't think of any other company where the time between the announcement and the first customer deliveries is as short as it is with Apple.

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The second option is greatly intended. Apple is a company that has the ability to control the market by the amount of product they have. Their product is so much better than others that customers will wait 4 weeks for something instead of buying say a note 4 believe me if Apple truly wanted every person and their dog to have a phone it would happen.

There are also people who are waiting for 4 weeks to buy a Note 4 instead of buying, say, an iPhone 6. so that does not seem to be an indication for how much better a product is.