Apple already building iPhones at rate of 40 million a year?

Posted:
in iPhone edited January 2014
Apple is reportedly testing the limits of its overseas manufacturing facilities in order to keep up with demand for the new iPhone 3G, with production already cranked nearly sevenfold compared to the first-generation model.



Foxconn, the company's Taiwanese handset and iPod manufacturer, has recently ramped production of the new iPhone to 800,000 units per week, says TechCrunch, citing a person "close to Apple with direct knowledge of the numbers."



The build rate is said to be "above current full capacity" for the Foxconn facilities alloted to Apple's handset business, which has led to concerns that quality control may suffer. At the current rate, Apple stands to produce more than 40 million iPhone 3Gs over the course of twelve months.



That paces well ahead of analysts' estimates (1, 2, 3) and early reports that suggested Apple's initial iPhone 3G orders spanned only 25 million units through the expected lifespan of the product.



TechCrunch believes Apple's initial order was actually 40 million units over the course of the first twelve months, but is now hearing that "those numbers are being revised upwards sharply."



Apple said it sold 1 million iPhones in the first 72 hours the new iPhone 3G was put on sale, but has not provided an updated sales tally since. The iPhone is currently on sale in 23 countries, with 20 more expected to be added on August 22nd, and another 30 by the end of the calendar year.
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Comments

  • Reply 1 of 53
    Apple stock at this level of around $155 is such a great buying opportunity, it's incredible. I am pretty sure that we will be over $200 by the end of the year. Over 30% profit growth, incredible new products, new revenue streams, $21 Billion in cash, no debt makes this a company I love owning. The iPhone sales are going to take Wall Street by total surprise. This may well be the last opportunity to get in at this level.
  • Reply 2 of 53
    rot'napplerot'napple Posts: 1,839member
    Quote:
    Originally Posted by AppleInsider View Post


    The build rate is said to be "above current full capacity" for the Foxconn facilities alloted to Apple's handset business, which has led to concerns that quality control may suffer. At the current rate, Apple stands to produce more than 40 million iPhone 3Gs over the course of twelve months.



    Was it not a couple of years back when there were "sweatshop" allegations of Foxconn and the manufacturing of iPods? The heck with 'QC' if the manufacturer is said to be "above current fill capacity", what about the employees?! Will this be "Sweatshop, the Sequel". If Apple meant what it said, when it said, "Apple is committed to ensuring that working conditions in our supply chain are safe, workers are treated with respect and dignity, and manufacturing processes are environmentally responsible,? then maybe Apple should pay a surprise inspection every now and then for the welfare of the supply chain's employees... \
  • Reply 3 of 53
    merdheadmerdhead Posts: 587member
    Where did Apple go wrong with their forecasting? Or maybe they've just discounted the mainstream for so long that when they join it (subsidised phones, latest technology) it puts all their models out of whack.



    And it's definitely bad. Apple should be taking advantage of the positive environment for their phone to build momentum, which they need against the companies that compete with them. People who might have switched from some other product but couldn't buy may be lost forever.



    It would be great if Apple sold 100 million phones next year, but they may have done themselves in with their strange pessimism.
  • Reply 4 of 53
    Apple is very conservative with their forecasting. They cited several real issues that could affect their results, like the US economy. During a Presidential election quarter, where the press is going to be hammering the economy to make the situation more favorable to the democrat, this is advisable.



    If Apple had crossed the 5 million sold line with the iPhone3G, I'm sure we'd have heard about it by now. They were very quick to tout the 1 million sold the first weekend, I'm sure they'd want to broadcast the next milestone as well.



    Quote:
    Originally Posted by merdhead View Post


    Where did Apple go wrong with their forecasting? Or maybe they've just discounted the mainstream for so long that when they join it (subsidised phones, latest technology) it puts all their models out of whack.



    And it's definitely bad. Apple should be taking advantage of the positive environment for their phone to build momentum, which they need against the companies that compete with them. People who might have switched from some other product but couldn't buy may be lost forever.



    It would be great if Apple sold 100 million phones next year, but they may have done themselves in with their strange pessimism.



  • Reply 5 of 53
    All of this forecasting must be based mostly on international sales, because the United States market is mostly a zero-sum game.



    I guess I'm wrong. I find it amazing that that many people are willing to undertake the onerous contractual and provider obligations "buying*" an iPhone implies, especially in the current economy.



    (*It's not ever really your phone, since you can't install your own software on it, or use it with any GSM provider. It's Apple's or AT&T's phone--you're merely leasing it.)
  • Reply 6 of 53
    Apple's disastrous planning will simply ramp their increasingly poor quality control issues, abundantly visible on their own discussion forum, to the iPhone.



    Just stand in line at the Genius Bar for yet another repair, as I have many times (2 Airport Extremes, two MacBooks, two Airport Expresses, one wireless keyboard, a constantly disappearing Apple TV and wireless router in the Airport Utility) in the past 12 months, and listen to the litany of like issues from your fellow customers in the queue. Then read the discussion boards. These are not isolated incidents.



    QC issues? Can you say Leopard? Apple TV? Apple Airport Extreme? iPhone 2.0 software? Just about any wireless product they make? Not one of these was ready for prime time when released, as Apple migrated to the MSFT model of "let the customer do the debugging for us".



    Trust and brand equity take years to build and months to destroy, and Apple seems unaware of the fact that trust, once lost, is seldom regained.



    No company's stock trading at over 30 times future earnings, making consumer discretionary products which no one needs when the alternative is putting bread on the table while the world heads for a depression, is remotely a buying opportunity.



    While the Reality Distortion Field can support the stock with hype when times are good, it has yet to be proved as a workable model in a depression - something neither Apple or any of its customers have experienced.



    Add a star CEO, with no visible succession planning, who's health issues have been amateurishly obfuscated by the marketing department, and you have a stock trading at under $100 twelve months hence.
  • Reply 7 of 53
    Quote:
    Originally Posted by Thomaspin View Post


    ...... while the world heads for a depression.....



    Really.... that's a pretty strong forecast!



    On what basis do you say that?
  • Reply 8 of 53
    fraklincfraklinc Posts: 244member
    Apple is growing fast, they already sitting on $20.8 billion in cash, not to mention microsoft is only holding $23.8 billion



    http://www.businessweek.com/magazine...mpaign_id=yhoo
  • Reply 9 of 53
    Quote:
    Originally Posted by merdhead View Post


    Where did Apple go wrong with their forecasting? Or maybe they've just discounted the mainstream for so long that when they join it (subsidised phones, latest technology) it puts all their models out of whack.



    And it's definitely bad. Apple should be taking advantage of the positive environment for their phone to build momentum, which they need against the companies that compete with them. People who might have switched from some other product but couldn't buy may be lost forever.



    It would be great if Apple sold 100 million phones next year, but they may have done themselves in with their strange pessimism.



    I agree that they have most likely lost sales due to the interruption in the supply chain, but I also think they can stem the losses with a quick supply chain refill. If this short supply carries into September or October, then I think it spells trouble
  • Reply 10 of 53
    satchmosatchmo Posts: 2,699member
    Quote:
    Originally Posted by MacCentric View Post


    Apple stock at this level of around $155 is such a great buying opportunity, it's incredible. I am pretty sure that we will be over $200 by the end of the year. Over 30% profit growth, incredible new products, new revenue streams, $21 Billion in cash, no debt makes this a company I love owning. The iPhone sales are going to take Wall Street by total surprise. This may well be the last opportunity to get in at this level.



    We've heard this all before...yet the stock continues to get punished because of conservative estimates.

    Wall Street is a crap shoot at best. Personally I'd love to see APPL at $200+ but I'd be surprised if it ended at $180 by year's end, given the state of the economy.
  • Reply 11 of 53
    nagrommenagromme Posts: 2,834member
    Quote:
    Originally Posted by Rot'nApple View Post


    If Apple meant what it said, when it said, "Apple is committed to ensuring that working conditions in our supply chain are safe, workers are treated with respect and dignity, and manufacturing processes are environmentally responsible,? then maybe Apple should pay a surprise inspection every now and then for the welfare of the supply chain's employees... \



    What makes you think they're not doing that?
  • Reply 12 of 53
    30%-40% off when Jobs retires (or worse, God forbid) to his new yacht. Google for the story.



    Then again, why should any investor believe a company which tries to spin the state of its CEO's health? A minor bug became intestinal surgery. Healthy skepticism is the order of the day. And while no one cares who the CEO of GM is, Jobs is key to Apple and, accordingly, his continued involvement is a significant component of the stock's price.



    Flat on the rest of the business as the AAPL mouse works the treadmill of growth, running faster and faster to meet unrealistic earnings expectations.



    The cash has a negligible and dilutive yield representing a drag on earnings and should be dividended back to shareholders in much the same way MSFT was forced to do a few years ago. Keeping that level of unneeded reserves is hard to understand. Operating cash flow is more than adequate to dictate this action. $5bn is all they need to service all those costly prime high street retail store leases and to fund corporate layoffs over the coming global economic depression.



    Any acquisition big enough to need that sort of cash will be both dilutive and subject to extreme anti-trust scrutiny from socialist governments, whether in the US, EU or points east.



    Further, AAPL has failed repeatedly to materially expand its customer base to corporate consumers who have a far longer buying and investing horizon. It's a retail company operating in the worst retail environment since 1929. Corporations can afford to invest for the next boom. Bankrupt retail consumers cannot.



    Disclosure: No AAPL position.
  • Reply 13 of 53
    gqbgqb Posts: 1,934member
    Quote:
    Originally Posted by Thomaspin View Post


    30%-40% off when Jobs retires (or worse, God forbid) to his new yacht. Google for the story.



    Then again, why should any investor believe a company which tries to spin the state of its CEO's health? A minor bug became intestinal surgery. Healthy skepticism is the order of the day. And while no one cares who the CEO of GM is, Jobs is key to Apple and, accordingly, his continued involvement is a significant component of the stock's price.



    Flat on the rest of the business as the AAPL mouse works the treadmill of growth, running faster and faster to meet unrealistic earnings expectations.



    The cash has a negligible and dilutive yield representing a drag on earnings and should be dividended back to shareholders in much the same way MSFT was forced to do a few years ago. Keeping that level of unneeded reserves is hard to understand. Operating cash flow is more than adequate to dictate this action. $5bn is all they need to service all those costly prime high street retail store leases and to fund corporate layoffs over the coming global economic depression.



    Any acquisition big enough to need that sort of cash will be both dilutive and subject to extreme anti-trust scrutiny from socialist governments, whether in the US, EU or points east.



    Further, AAPL has failed repeatedly to materially expand its customer base to corporate consumers who have a far longer buying and investing horizon. It's a retail company operating in the worst retail environment since 1929. Corporations can afford to invest for the next boom. Bankrupt retail consumers cannot.



    Disclosure: No AAPL position.



    Sorry, but I have to call 'troll'.

    Combine the 'apple is an incompetent, messiah-drive fluke' with your previous list of more visits to the Apple Genius Bar then the combined total of everyone I know or have heard of in my entire (large) Mac circle, and I smell some other agenda.



    FWIW.
  • Reply 14 of 53
    rot'napplerot'napple Posts: 1,839member
    Quote:
    Originally Posted by nagromme View Post


    What makes you think they're not doing that?



    Nothing make me think that Apple isn't doing that. For their sake, I hope they are so they can avoid bad PR. However, with that said, how many times have corporations paid lip service to righting wrongs only to have conditions creep back to status quo?



    And forget corporations, how about governments? Wasn't it just some 30 years ago when this country had an energy crisis and not enough oil and we were told to lower thermostats and wear sweaters... Fast forward thirty years and neither political party had a energy vision or goal that was worth a damn and now we find ourselves again that oil supply is not meeting demand and we are told to "inflate our car tires"?! Deja Vu anyone...
  • Reply 15 of 53
    Quote:
    Originally Posted by Thomaspin View Post


    Just stand in line at the Genius Bar for yet another repair, as I have many times (2 Airport Extremes, two MacBooks, two Airport Expresses, one wireless keyboard, a constantly disappearing Apple TV and wireless router in the Airport Utility) in the past 12 months, and listen to the litany of like issues from your fellow customers in the queue. Then read the discussion boards. These are not isolated incidents.



    Let's see, here... it is the responsibility of an Apple Genius to help people who are having problems or need help with their Apple products. People don't schedule an appointment with them to thank them for all the hard work they do, or to talk about Steve Jobs' excellent taste in turtle neck sweaters. Apple staffs enough Apple Geniuses to service the flow of customers into the store, and Apple has a massive number of customers and products out there. As such, especially at this time, the Apple Genius will be helping customers with problems all day long.



    What did you expect to hear while you were waiting in that line?



    And how on earth is that a representation of anything?



    As for the internet, people love to complain when they are having a problem. They don't say much when they are happy. People are thrilled to post about issues, and actively search for solutions, when something is troubling them. Precious few even bother with a review when things are working great. What did you expect from the internet?
  • Reply 16 of 53
    cameronjcameronj Posts: 2,357member
    Quote:
    Originally Posted by MacCentric View Post


    Apple stock at this level of around $155 is such a great buying opportunity, it's incredible. I am pretty sure that we will be over $200 by the end of the year. Over 30% profit growth, incredible new products, new revenue streams, $21 Billion in cash, no debt makes this a company I love owning. The iPhone sales are going to take Wall Street by total surprise. This may well be the last opportunity to get in at this level.



    What makes you think 30% profit growth justifies that kind of stock price increase? 30% is pretty slow given Apple's high valuation, even after this decline. They need to grow faster than that if you want $200 per share.
  • Reply 17 of 53
    physguyphysguy Posts: 920member
    Quote:
    Originally Posted by Xian Zhu Xuande View Post


    Let's see, here... it is the responsibility of an Apple Genius to help people who are having problems or need help with their Apple products. People don't schedule an appointment with them to thank them for all the hard work they do, or to talk about Steve Jobs' excellent taste in turtle neck sweaters. Apple staffs enough Apple Geniuses to service the flow of customers into the store, and Apple has a massive number of customers and products out there. As such, especially at this time, the Apple Genius will be helping customers with problems all day long.



    What did you expect to hear while you were waiting in that line?



    And how on earth is that a representation of anything?



    As for the internet, people love to complain when they are having a problem. They don't say much when they are happy. People are thrilled to post about issues, and actively search for solutions, when something is troubling them. Precious few even bother with a review when things are working great. What did you expect from the internet?



    Very well said, thanks!!! Deriving general conclusions from highly biased (problem postings, surveys at problem reporting locations (genius bar)) data seems to be the norm around here.
  • Reply 18 of 53
    foo2foo2 Posts: 1,077member
    Quote:
    Originally Posted by serpicolugnut View Post


    If Apple had crossed the 5 million sold line with the iPhone3G, I'm sure we'd have heard about it by now.



    I expect the next milestone Apple touts will be the 10 million sold goal they had set for all of 2008. If sales to the service providers significantly outpace the rumored production rate, this goal could be reached sooner than the 74-day mark (Sept. 22 for the iPhone 3G) when the original iPhone had sold only its first million.
  • Reply 19 of 53
    bwikbwik Posts: 565member
    Quote:
    Originally Posted by Thomaspin View Post


    30%-40% off when Jobs retires (or worse, God forbid) to his new yacht. Google for the story.



    Further, AAPL has failed repeatedly to materially expand its customer base to corporate consumers who have a far longer buying and investing horizon. It's a retail company operating in the worst retail environment since 1929. Corporations can afford to invest for the next boom. Bankrupt retail consumers cannot.



    Disclosure: No AAPL position.



    "Has failed???"



    This is precisely why AAPL is a buying opportunity, and MSFT is not. AAPL has not yet conquered the world, while MSFT has (in the past). TO state the obvious, if AAPL had already conquered the world, they would not be a growth stock anymore.



    The enterprise statistics (and prospects) are nothing if not hugely promising!



    The worst retail environment since 1929? Surely you jest. Ever been to China? Japan? New York? Didn't think so. The world, today, is wealthier than it has ever been. Crucially, the cell phone market (high end cell phone) is stronger and bigger than ever before, projected to hit 1 billion units, at perhaps $100 to $200 each. I guess we could all go in our hidey-hole, pretending 2008 is so terrible. Personally, I am amazed at the entire world's near-infinite wealth in this year 2008. Money is shooting out of ever pore of this planet, as we look forward to even better times ahead.



    So, I think you're trying to bad-mouth the world's most prosperous moment ever. Interesting.
  • Reply 20 of 53
    melgrossmelgross Posts: 33,510member
    Quote:
    Originally Posted by Rot'nApple View Post


    Was it not a couple of years back when there were "sweatshop" allegations of Foxconn and the manufacturing of iPods? The heck with 'QC' if the manufacturer is said to be "above current fill capacity", what about the employees?! Will this be "Sweatshop, the Sequel". If Apple meant what it said, when it said, "Apple is committed to ensuring that working conditions in our supply chain are safe, workers are treated with respect and dignity, and manufacturing processes are environmentally responsible,? then maybe Apple should pay a surprise inspection every now and then for the welfare of the supply chain's employees... \



    This has nothing to do with "sweatshop conditions". These are highly automated production lines.



    When they say that production is over "full" capacity what that means is that the production lines are not being given their normal downcycle for maintenance and QC checks. It has nothing to do with the workers themselves.



    At some point, extra lines have to be assembled. Whether they have enough capacity in a plant for those extra lines is the question.
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