iPhone 5s Inventory Said to Be 'Severely Constrained' at Launch

[Geckotek]

That Apple can't figure out how to set up good supply chain before releasing an item.

Are they really "unaware" of unprecedented demand for their new products? Do they really need to do the marketing trickery to make it seem like a product is more popular by having it artificially unavailable during the first few months after release?

Apple knows darn well that millions will be scrambling to buy their product on release, so why would they even bother setting up a release date before they have the stock numbers available?

I realize there is always the chance for real unprecedented demand for a new product, but Apple has not beeing in that situation for years now.

Lol, also nobody is interested in a $1000 phone anymore, which is why the 64gb is not popular. Apple will most likely interpret this as people don't want large storage capacities on phones anymore, but people just don't like high price tags on phones anymore.

It only takes one key part in the entire product to suffer from a low yield to foul up things. Do you REALLY think Apple isn't excellent at supply chain management? They are PROS at it. However, even a pro is at the mercy of specific part failures that they cannot control. In this case it has been widely reported that low yields on the biometric sensor are the cause of the supply constraints.

But I'm sure you would have figured out a way to fix that since you're some sort of supply chain management genius. Right?

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This is just marketing, theres going to be plenty in stock just like last time.

Care to place a bet on that?

 

[Rogifan]

I think Tim Cook's (or was it Phil's) comment at the keynote was a bit telling.

He joked (paraphrasing) that some of us might have seen the phone before. IE - because of the leaked photos.

I am not putting on a tin foil hat. And I don't believe Apple has anything to gain from restricting inventory. However - I also believe there's a decent chance that Apple has had controlled leaks to build a press swell around the launch. And those that would argue that Apple doesn't "need" it - I would argue otherwise. Yes they always get a ton of press. But as competition grows, the need to keep up the press frenzy becomes more and more important.

Well if Apple had adequate supply why wouldn't they have done a pre launch. The stock is down a lot since the announcement partially because of no pre launch for the 5S and no sales figures for the 5C. You think that was all intentional on Apple's part to create hype? If it was, it cost the stock about $50.

 

[E.Lizardo]

How hard is it to make a phone that's a minor variant of the phone they were already making?

A minor variant that has almost 100 percent different components?Besides,it only takes one part,like the fingerprint sensor,to stop the production line.

 

[peterdevries]

We need a waterproof iPhone.

Why? Besides the novelty factor, what percentage of people would use their phone in wet conditions, under water or in the toilet?

 

[zecks420]

exactly! Apple has absolutely crazy markups for extra storage. that's the chief reason why the 64GB model is not as popular as the lower capacity ones.
Here is a link to iphone 5 BOM from last year.

The BOM difference between 32GB and 64GB models was just 21$ then. It should be even less now. I suspect that the BOM difference for a 128GB version (if they were to make one) would be in line with those numbers. I really wanted a 128GB 5S - I'm tired of constantly swapping songs and audiobooks and my music library is not all that big. I'm always amazed how people manage things with just 16GB. One more things to consider is the 64-bit switch. as I understand it, once the devs start upgrading their app they'll make universal binaries which include both 32-bit and 64-bit versions as was done during the OS X switch to 64-bit. That will make the apps bigger. I don't know by how much (can somebody comment?) but given the storage constraints of iphones every little bit counts.

And these are different storage pricing options than on other phones how? Everyone charges about the same 100 bucks to go from 32 to 64 etc..that is if they even have a 64GB option. You act like Apple is the only one charging a premium for phone Storage. And Micro SD slots are far and few between. If you stick to the "I am not buying a phone that dont have Micro-SD slot... good luck with that. You just eliminated all the great phones unfortunately...

 

[Macinva]

I guess we wait and see.

I'm also waiting on round 2 of "scratch-gate" and possibly "fingerprint-gate" or something similar.

 

[samcraig]

Well if Apple had adequate supply why wouldn't they have done a pre launch. The stock is down a lot since the announcement partially because of no pre launch for the 5S and no sales figures for the 5C. You think that was all intentional on Apple's part to create hype? If it was, it cost the stock about $50.

No - I never suggested any of what you are stating. I was stating that I believe Apple has made some controlled leaks prior to the keynote. As for this new "data" - isn't the word coming from the carriers themselves. That's what I read online.

 

[50548]

Well if Apple had adequate supply why wouldn't they have done a pre launch. The stock is down a lot since the announcement partially because of no pre launch for the 5S and no sales figures for the 5C. You think that was all intentional on Apple's part to create hype? If it was, it cost the stock about $50.

You are partly right:

5S = no pre-launch due to inventory constraints;

5C = no sales figures because it's a flop.

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Why? Besides the novelty factor, what percentage of people would use their phone in wet conditions, under water or in the toilet?

To watch pron under the shower?

 

[ValSalva]

Wasn't it Tim Cook who said inventory was evil? Now we're supposed to believe he's got a warehouse somewhere full of 5S's and he's purposely holding back supply....even though I'm sure he'd love to report huge sales figures next week and for the September quarter end?

That's why I wonder why people think these stories are false. I'm sure there are a number of reasons the 5S is supply constrained. We may not know why for some time. It could be the fingerprint sensor. It could be the A7 processor. It's amazing they can get over a billion transistors on a chip that small.

Pre-orders are not sales, correct? So it doesn't make sense for Apple to create an artificial tight supply.

 

[ANMA dojo]

I forget, but do Apple Stores typically open earlier for iPhone launch days?

 

[jmerchlinsky]

Here's a conspiracy theory for you guys to chew on.

Why did Apple repackage the 5 in plastic to create the 5C? The conventional answer has been to increase their margins since it is cheaper to produce and a growing number of customers are bypassing the new phones and buying the older model - particularly likely when they look identical to the casual buyer.

The 5C will sell for $100 less than the 5 sold for last year. One thing is sure, Apple didn't get $100 out of the manufacturing cost by switching to plastic. All of the mechanical componets in the phone are estimated to cost Apple $33 in aluminum. Maybe they got $20 or $25 out of the cost, but surely not enough to offset the $100 lower price point.

So here's my theory, Apple essentially packaged the iPhone 5 in ugly garish down market plastic to encourage buyers to opt for the higher margin 5S. Evidently they feel the need to protect the $0 and $100 subsidized cost points, but it really pains them (on the bottom line) everytime someone buys an iPhone 4.

I suppose the colors will attract a few new customers, kids & hello kitty fans, but real motivation is to make last year's model unpaletable for most buyers.

 

[springsup]

First they said these phones are DOA, no demand, no subsidy…etc. Now they said not enough phones. You just can’t win when you are apple.

They could be artificially lowering supply by holding units back from the shops.

I don't think they are, just saying that being "sold out" doesn't necessarily mean very high demand; just that demand is greater than supply. If supply is tiny, you only need a small amount of demand.

Why would anybody do this? Well, it's a psychological gamble. If demand really was tiny, a manufacturer might reduce supply to prevent the media catching on. On the other hand, delayed sales are potentially lost sales, so that manufacturer would have to be careful about it.

 

[E.Lizardo]

“Never argue with an idiot. They will only bring you down to their level and beat you with experience.”

Watch out with that talk.They'll send you to the principal's office.

 

[lilo777]

Is it "severely constrained" or "low"?

Maybe carriers are just too optimistic on potential demand for new phones. Perhaps Apple simply does not believe that people are going to buy new models and therefore provided them with lower inventories?

 

[mashinhead]

Why does this happen EVERY year? Apple, why the hell can't you figure this supply chain thing out and start a month of two earlier than normal - or add a few production facilities/expand teams or something?

Every time a new iPhone comes out it's a total pain in the butt for weeks on end for people. (And I typically pre-order - but that obviously wasn't available this time)

It's frustrating.

It's calculated. They want the phone to have sold out. They want you to then want it more because it is. And they want you to wait in line.

 

[Nicky G]

And even the case is different if you count colors gold/space gray

Good point.

 

[doelcm82]

My wife is at a hospital right now, about to give birth to our first child.

I feel so bad that I can't be with her right now as I've joined the line at the Apple store Fifth Avenue. So stoked!

Turn it off (like a light switch).

 

[E.Lizardo]

Just looking at your signature, it's clear you are a power user. But I'd stop far short of calling the 5C crap.

My younger siblings and both my parents are far from power users. The innards of the 5, and thus the 5C, are more than adequate for the casual user. It's also $100 cheaper on contract. So for them, it's a great buy.

To say the 5C is crap is going far too negative on it. Benchmarks and raw processing don't matter to most the world.

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My thought exactly. In the same boat.

Facts don't matter to most on these boards.

 

[peterdevries]

That's why I wonder why people think these stories are false. I'm sure there are a number of reasons the 5S is supply constrained. We may not know why for some time. It could be the fingerprint sensor. It could be the A7 processor. It's amazing they can get over a billion transistors on a chip that small.

Pre-orders are not sales, correct? So it doesn't make sense for Apple to create an artificial tight supply.

The most likely reason for the constrained supply is the fact that they have only recently started production and that the launch is happening in ever larger countries simultaneously.

 

[Macwhich]

It must be very challenging beeing Apple.

And I guess even they must think... When do we hit the roof?

I mean, they could start making phones 3 months ago to produce like, i dont know 50 million phones...

But say they "only" sell 20 mill during launch. Thats allot of dead capital in stock that is not beeing moved.

Also remember they are also trying to penetrate 2 HUGE markets. China has always been a focus, but whit the resents stunts even more so it would seem.
Then you have Japan where Apple just signed up with the biggest carrier this year.
Thats 120 million potential new customers on that little Iland. Imagene if only 3% of the population buys an iPhone... Thats 3,6 million new iPhone customers in Japan

I think thats why you are seeing allot of smaller european countries not on the list this time for launch. Just to feed China and Japan.

Cause remember we are talking millions here. Imagine someone telling you to produce 6 million phones to release during the year. These are INSANE numbers. Imagine the produclines, imagine the logistics. They are mindbogelong numbers to me at least.

 

[Mactendo]

iChaos.

 

[V.K.]

Why? Besides the novelty factor, what percentage of people would use their phone in wet conditions, under water or in the toilet?

lol, this reminds me I once saw a guy drop his phone (don't know what kind of phone it was -I didn't look) in a public bathroom while talking on the phone and peeing. He might have appreciated a waterproof phone . But yes, most people don't need this at all.

 

[cmichaelb]

Unless they've done work since the beta I played with, iOS 7 on a 4S is just a generally miserable and slow experience.

I'm not planning on upgrading until I buy a new phone.

The 4S performance seems to vary widely between users. Dare I say, it was pretty snappy on my 4S. Not iOS 6 snappy, but better than expected.

 

[Alumeenium]

I understand battery, new chip R&D, fancy sapphire lens

BUT?!

64GB SD is $40 why am I expected to pay $900 for the PHONE ?!??




A Forced "shortage" at launch smells SO FISHY coming from "Mr SupplyChain"

 

[cmichaelb]

I will pitch my tent today.

Too much information dude....