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iPhone supply issues could make Apple disappoint on Wall Street

post #1 of 50
Thread Starter 
While demand for the iPhone remains high, Apple's apparent inability to keep up with supply during the last quarter could lead to lower-than-expected revenue reported on Monday.

At Apple's September media event, the iPhone maker suggested roughly 3.5 million phones were sold in the quarter with three weeks remaining, Yair Reiner, analyst with Oppenheimer, said in a note to investors Friday. But some analysts believe Apple will have sold more than twice that in the September quarter. While recent surveys suggest the supply issue has been mostly resolved, Reiner believes that bottleneck period could lead to slight disappointment in the company's fourth-quarter fiscal year revenue.

But outstanding demand for the iPhone has an upside for the holiday season, provided Apple can keep up with demand. Reiner recommended that investors "keep some powder dry" to buy shares after Apple reports its earnings Monday afternoon, rather than before.

"With demand for the iPhone apparently outstripping supply, December could be a substantial catch-up quarter, both in terms of sell-through and channel replenishment," he said. "Barring any additional component or manufacturing disruptions, we believe our 8M unit assumption for F1Q10 could prove conserfative, especially given the iPhone's expanding carrier footprint."

Apple's iPhone supply issues were also noted Thursday by Piper Jaffray analyst Gene Munster. The handset maker has had trouble keeping the iPhone 3GS in stock, in particular. Overseas, wireless carrier 3 Italia has said though it is selling 20,000 iPhones per month, it could double those numbers if the supply were available.

Like others, Reiner expects a record quarter for Mac sales, with Apple shipping between 2.7 million and 2.8 million units. But the potential to exceed those numbers, he said, is limited, because rumors of new MacBooks and iMacs likely delayed some purchases. Reiner expects the company's first quarter of the 2010 fiscal year to be "significantly more impressive" than the concluded September quarter.

Previously, Oppenheimer predicted that new accounting rules from the Financial Accounting Standards Board would boost Apple's shares as iPhone revenue is realized up-front. In that report, Reiner predicted that Apple would continue to "surprise to the upside" for investors.

Given the strong future potential, Reiner has maintained his outperform rating for Apple despite iPhone supply concerns. Oppenheimer has a price target of $210 for AAPL stock.
post #2 of 50
Amazing this 3GS is. Apple couldn't keep up with the demand with its 3GS supply. I know I love mine and I have recommended it to 2 newbees that also bought in. My friends with their 3G phones want them too. Just goes to show you to give the people what they want and they will buy in droves- Video, better camera, faster speed and better battery, more storage, and yes MMS. And of course the App store keeps on growing.
post #3 of 50
Quote:
Originally Posted by teckstud View Post

Amazing this 3GS is. Apple couldn't keep up with the demand with its 3GS supply. I know I love mine and I have recommended it to 2 newbees that also bought in. My friends with their 3G phones want them too. Just goes to show you to give the people what they want and they will buy in droves- Video, better camera, faster speed and better battery, more storage, and yes MMS. And of course the App store keeps on growing.

And if you could actually freely tether your Internet connection it would be perfect
post #4 of 50
Oh look, surprise surprise, and we are pretty much back where we started, so much for all you doom mongers who predicted aapl would never recover..
post #5 of 50
Quote:
Originally Posted by freelander51 View Post

And if you could actually freely tether your Internet connection it would be perfect

I know , I know - just not trying to go there so early in the morning. Besides that's more of an AT&T thing- elsewhere has it already.
post #6 of 50
It is hard to understand who would be disappointed by selling a product faster than it can be manufactured. Apples manufacturing process has historically been superior to there competition, so no issues there. Apple will almost certainly beat estimates across the board. The new accounting rules are the big wild card. I am looking forward to seeing the effect of that change. Will apple bring all deferred revenue into this qtr or will/can they hold some back as backlog? These are the unknowns that I would focus on. As a manufacturer myself I would love to be in the position of not being able to keep up with demand, it is by far better than the alternative.
post #7 of 50
I think it's fine if the shares pull back a bit based on this 'disappointment.' That leaves more room for a slightly more sustained upside when supply improves, as it surely will.

It would have been far worse to have met the demand by ramping up supply too quickly, with all the attendant compromise on quality.

This is disciplined execution on Apple's part. And if the market can't see that, no big deal in the short run.
post #8 of 50
In Europe supply is low since the introduction in june. At the iPod event early september Apple said problems were being resolved, but there are still no signs that they have grips on it. What is the problem? Demand in China? Problems with flash memory? I know lots of people that are so disappointed en so tired of waiting that they bougth another smartphone or are at least considering that. And that's too bad.
post #9 of 50
Quote:
Originally Posted by teckstud View Post

Amazing this 3GS is. Apple couldn't keep up with the demand with its 3GS supply. I know I love mine and I have recommended it to 2 newbees that also bought in. My friends with their 3G phones want them too. Just goes to show you to give the people what they want and they will buy in droves- Video, better camera, faster speed and better battery, more storage, and yes MMS. And of course the App store keeps on growing.

Now this is the Teckstud I've come to know and love. You see, I guessed right ... this is your best post ever. Congratulations on both your 3GS and your post. It made my day!
Apple, bigger than Google, ..... bigger than Microsoft,   The universe is unfolding as it should. Thanks, Apple.
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Apple, bigger than Google, ..... bigger than Microsoft,   The universe is unfolding as it should. Thanks, Apple.
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post #10 of 50
To "disappoint" based on inability to meet skyrocketing demand is pretty impressive all the same.
post #11 of 50
Quote:
Originally Posted by newbee View Post

Now this is the Teckstud I've come to know and love. You see, I guessed right ... this is your best post ever. Congratulations on both your 3GS and your post. It made my day!

Hey, Apple scored a grand slam with this and they deserve heaps of praise. It has received universal raves across the board with this gen of the phone and it is sublime. I waited 2 years for this. It has literally changed my life.
post #12 of 50
Quote:
Originally Posted by teckstud View Post

Hey, Apple scored a grand slam with this and they deserve heaps of praise. It has received universal raves across the board with this gen of the phone and it is sublime. I waited 2 years for this. It has literally changed my life.

Well I'm with you on that.
post #13 of 50
Quote:
Originally Posted by freelander51 View Post

And if you could actually freely tether your Internet connection it would be perfect

with way the ATT network is right now, no it would not be perfect. it would be crap. cause all connections are one stream. so the more data being used, the more voice has issues. this is why they haven't done it yet, they know that the network could easily shitcan on them. wouldn't take but a small chunk of the folks to do it. especially in stressed areas like NYC (which just added like 25 more antennas and is still shit)

also, these analysts are funny. they act like Apple hasn't counted on the notion that there might be more iphones sold during the holidays so they are ramping up production so they can ship more to the stores over the next few weeks. but the stores don't have unlimited on site storage and can't foreseen a sudden rush on a model. so huh yeah they might run out of that 32 gb white you wanted to get Mr Analyst. So like you have to wait a day or get the black one and a white case.

A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

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A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

Reply
post #14 of 50
Quote:
Originally Posted by teckstud View Post

Amazing this 3GS is. Apple couldn't keep up with the demand with its 3GS supply. I know I love mine and I have recommended it to 2 newbees that also bought in. My friends with their 3G phones want them too. Just goes to show you to give the people what they want and they will buy in droves- Video, better camera, faster speed and better battery, more storage, and yes MMS. And of course the App store keeps on growing.

Indeed the new features of the GS make it compelling like the compass, longer battery life, speed... not to mention the apps. I looked at the Pre and Android, they have some nice features, but nothing compelling. Both of these seemed slower and tended to hang-up. I did not like the user interface of the Android.

Apple still has to tie-in with the China Mobile GSM/EDGE network and a few others.
post #15 of 50
Quote:
Originally Posted by teckstud View Post

Hey, Apple scored a grand slam with this and they deserve heaps of praise. It has received universal raves across the board with this gen of the phone and it is sublime. I waited 2 years for this. It has literally changed my life.

Tech, I like your posts but if a PHONE can "Literally Change Your Life". You need to take a serious look at your life.

Please tell me Quadra 610 slipped some Kool Aid in your coffee this morning.
post #16 of 50
Quote:
Originally Posted by AppleInsider View Post

"With demand for the iPhone apparently outstripping supply...

With this economy, I'm sure most business would love to have that problem!

Ten years ago, we had Steve Jobs, Bob Hope and Johnny Cash.  Today we have no Jobs, no Hope and no Cash.

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Ten years ago, we had Steve Jobs, Bob Hope and Johnny Cash.  Today we have no Jobs, no Hope and no Cash.

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post #17 of 50
Quote:
Originally Posted by InLine1 View Post

It is hard to understand who would be disappointed by selling a product faster than it can be manufactured. Apples manufacturing process has historically been superior to there competition, so no issues there. Apple will almost certainly beat estimates across the board. The new accounting rules are the big wild card. I am looking forward to seeing the effect of that change. Will apple bring all deferred revenue into this qtr or will/can they hold some back as backlog? These are the unknowns that I would focus on. As a manufacturer myself I would love to be in the position of not being able to keep up with demand, it is by far better than the alternative.

It's a relatively good problem to have, but still a problem. In the bad old days, Apple had a terrible time accurately forecasting demand, which left them with both too little and too much product. This mess was straightened out after Jobs returned. In fact cleaning up forecasting and inventory was one of the the company's first impressive accomplishments during the late '90s, and in part led to the turn-around. The cause appears to be different this time (and maybe out of Apple's control), but still serves to show that an inability to meet demand is nearly as bad as having excess product on the shelves. Either way, it's money left on the table -- and in business, you never want to do that.
Please don't be insane.
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Please don't be insane.
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post #18 of 50
Quote:
Originally Posted by Rot'nApple View Post

With this economy, I'm sure most business would love to have that problem!

I think that is actually the problem; their contractors and suppliers might have a hard time ramping up with credit and issues with demand (and maybe cash flow) from other customers. Just speculation, but it doesn't seem like apple is doing it to manage interest levels now.

Surprised there is any retreat in share price today: with Google's performance it would make sense that Apple (with higher growth and lower multiplier) would be very attractive. I doubt there will be a great buying opportunity after the earnings release though.
post #19 of 50
Quote:
Originally Posted by NonVendorFan View Post

Tech, I like your posts but if a PHONE can "Literally Change Your Life". You need to take a serious look at your life.

Please tell me Quadra 610 slipped some Kool Aid in your coffee this morning.

I wouldn''t go that far as I'm only mentioning one product.
NO Kool-aid but:

1,) No longer need to buy NY Times or borrow the office paper as the NY Times App gives me all of it right at my fingertips.
2.) No longer need to carry another camera around as the pics and video this takes are excellent and I can send them instantly.
3.) Can access all my emails from alll my accounts instantly. (This could have been accomplished with any smart phone granted).
4.) Can watch full length movies on it with a decent sized screen on Amtrak from NY to DC (which I frequently use)
No longer need to lug around a laptop as much.

So yes it has changed my life.
post #20 of 50
Quote:
Originally Posted by aaarrrgggh View Post

Surprised there is any retreat in share price today: with Google's performance it would make sense that Apple (with higher growth and lower multiplier) would be very attractive. I doubt there will be a great buying opportunity after the earnings release though.

Markets down across the board today on weak results from GE and B of A.
Please don't be insane.
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Please don't be insane.
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post #21 of 50
Quote:
Originally Posted by schmrtzzz View Post

In Europe supply is low since the introduction in june. At the iPod event early september Apple said problems were being resolved, but there are still no signs that they have grips on it. What is the problem? Demand in China? Problems with flash memory? I know lots of people that are so disappointed en so tired of waiting that they bougth another smartphone or are at least considering that. And that's too bad.

I know of a few people that bought another smartphone. Either they didn't know about the iPhone, but mainly because their wireless service didn't sell them.

I don't know of anyone that got so disappointed or got so tired of waiting the bought another smartphone.

However, I do have a friend that was think about it, but their kids beat the shit out of him.
post #22 of 50
Quote:
Originally Posted by teckstud View Post

I wouldn''t go that far as I'm only mentioning one product.
NO Kool-aid but:

1,) No longer need to buy NY Times or borrow the office paper as the NY Times App gives me all of it right at my fingertips.
2.) No longer need to carry another camera around as the pics and video this takes are excellent and I can send them instantly.
3.) Can access all my emails from alll my accounts instantly. (This could have been accomplished with any smart phone granted).
4.) Can watch full length movies on it with a decent sized screen on Amtrak from NY to DC (which I frequently use)
No longer need to lug around a laptop as much.

So yes it has changed my life.

And you can do all of these things 1 app at a time. So did it also slow your productivity down? Wait. None of these are for productivity with the exception of email and you don't mind the movie your watching stopping if you have to reply to an urgent work email...

How's Hulu look on the iPhone? Wait you can't tell. You'll never have Flash on the iPhone.
post #23 of 50
Quote:
Originally Posted by NonVendorFan View Post

And you can do all of these things 1 app at a time. So did it also slow your productivity down? Wait. None of these are for productivity with the exception of email and you don't mind the movie your watching stopping if you have to reply to an urgent work email...

How's Hulu look on the iPhone? Wait you can't tell. You'll never have Flash on the iPhone.

I believe someone's taken to bashing teckstud for praise for Apple! In other news, Flash is a resource hog. Seriously, Hulu should be on an App for the iPhone, but then that would mean you wouldn't need cable or satellite. Heck, you wouldn't even need a IPTV subscription, if there are any in the US. Why pay for commercials on cable for 40+ bucks when you can get a few commercials for free on Hulu? But I wonder if content providers/networks would be happy with reduced revenues as a result of Hulu being on the iPhone

And someone's never used an iPhone before... why would you WANT to watch a movie while typing up a work email? You've be quoting the movie, not doing your work in the email. And secondly, I haven't seen any other phone do this... so I think you're just making up rubbish excuses for bashing.
post #24 of 50
Quote:
Originally Posted by NonVendorFan View Post

And you can do all of these things 1 app at a time. So did it also slow your productivity down? Wait. None of these are for productivity with the exception of email and you don't mind the movie your watching stopping if you have to reply to an urgent work email...

How's Hulu look on the iPhone? Wait you can't tell. You'll never have Flash on the iPhone.

1.) Multi apps should happen by June 2009- I can wait. It's the device that takes preference for me more than that at this point.
2.) Why wouldn't I want the movie to stop if I picked up a call anyway- I would want to concentrate on the call.
3.) Hulu- no thanks - prefer my digital copies included with my blu-rays. Great quality and besides I would never want to depend on AT&T for streaming anything, especially when crossing state lines on a train.
Peace.

ps :Though Flash would be a nice addition but it's not killing me not to have it at this point.
post #25 of 50
Quote:
Originally Posted by teckstud View Post

Amazing this 3GS is. Apple couldn't keep up with the demand with its 3GS supply. I know I love mine and I have recommended it to 2 newbees that also bought in. My friends with their 3G phones want them too. Just goes to show you to give the people what they want and they will buy in droves- Video, better camera, faster speed and better battery, more storage, and yes MMS. And of course the App store keeps on growing.

who are you and what have you done to teckstud?
post #26 of 50
Just to add anecdotal evidence for supply shortages:

The introduction of iPhone 3GS was delayed both in Bulgaria and Greece by a month or so. I managed to buy one when it was finally introduced in early August. It was available from 2 carriers in Greece and one in Bulgaria. The Greek laws did not allow exclusivity so you could buy fully unlocked iPhone 3G/3GS without any contract. In Bulgaria the 3G was offered with two year contract only, but after the 3GS introduction you could buy any version from the exclusive carrier without a contract and request an unlock.

After few days the party was over. Currently, the only way to get the 3GS in Bulgaria is to sign a two year contract in order to be added to a waiting list. The estimated wait time is 1-2 weeks! The restrictions became harder than those for the 3G were initially, because a renewal of an existing contract will not make you eligible for the waiting list

Online checks suggest that the iPhone 3GS is not freely available in Greece either.
post #27 of 50
what, my first post and no one else wants to comment?
post #28 of 50
Quote:
Originally Posted by InLine1 View Post

what, my first post and no one else wants to comment?

Relax, Dr Millmoss quoted you

Oh, and if you want to draw a bunch of comments, try tekstud style. No, not in this thread, see his post on other threads, there are lots of them
post #29 of 50
Let me get this straight, Apple could get socked because the iPhone is so popular that their Chinese friends can't make enough of them?
post #30 of 50
Quote:
Originally Posted by EUiPhoneUser View Post

Relax, Dr Millmoss quoted you

Oh, and if you want to draw a bunch of comments, try tekstud style. No, not in this thread, see his post on other threads, there are lots of them


Hey, take it easy on Teckstud ... this is the new and improved Teckstud ... I like it!
Apple, bigger than Google, ..... bigger than Microsoft,   The universe is unfolding as it should. Thanks, Apple.
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Apple, bigger than Google, ..... bigger than Microsoft,   The universe is unfolding as it should. Thanks, Apple.
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post #31 of 50
How can this be? The Pre was supposed to be the iPhone killer, or was that the Instinct?
post #32 of 50
With the Palm Web OS and Android, I would wait another 12-18 months to say if they are failures or not.
post #33 of 50
Quote:
Originally Posted by BenRoethig View Post

Let me get this straight, Apple could get socked because the iPhone is so popular that their Chinese friends can't make enough of them?

That's what's being implied here, though I'm not sure whether we're supposed to interpret this as a negative or a positive.
post #34 of 50
Quote:
Originally Posted by newbee View Post

Hey, take it easy on Teckstud ... this is the new and improved Teckstud ... I like it!

Don't get your hopes up, or hold your breath.

Some of us have been there before.... circa iPhone 3GS intro.
post #35 of 50
Quote:
Originally Posted by Postulant View Post

How can this be? The Pre was supposed to be the iPhone killer, or was that the Instinct?

No- it's the CLIQ and the Storm 2- haven't you heard?

http://ptech.allthingsd.com/20091014...phone-threats/
post #36 of 50
Quote:
Originally Posted by anantksundaram View Post

Don't get your hopes up, or hold your breath.

Some of us have been there before.... circa iPhone 3GS intro.

Whatever it is, I'm going to enjoy it while lasts.
Apple, bigger than Google, ..... bigger than Microsoft,   The universe is unfolding as it should. Thanks, Apple.
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Apple, bigger than Google, ..... bigger than Microsoft,   The universe is unfolding as it should. Thanks, Apple.
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post #37 of 50
Quote:
Originally Posted by teckstud View Post

I know , I know - just not trying to go there so early in the morning. Besides that's more of an AT&T thing- elsewhere has it already.

for those who haven't had a chance to use tethering on an unjailbroken iphone, when you get it it you will find it brilliant. I love using bluetooth to connect my iphone to my macbook pro and then connecting the macbook pro to my wife's macbook air using direct pc-to-pc wifi connection and letting her share my internet link.
post #38 of 50
Quote:
Originally Posted by NonVendorFan View Post

Tech, I like your posts but if a PHONE can "Literally Change Your Life". You need to take a serious look at your life.

Actually it does change your life. For example I don't read the news paper anymore, iPhone is the first PDA that I've used for more than a few days ( got a stack of four of them), net access is always with me, I'm actually timely with E-Mails now and a bunch of other positive things come from iPhone.
Quote:

Please tell me Quadra 610 slipped some Kool Aid in your coffee this morning.

I didn't know they lived together but let me tell you using iPhone is the Kool Aid. Funny thing is the more you use the better that Kool Aid tastes. Note too I'm on a 3G model, newer phones are even better. Besides speed the only complaint my older model leaves me with is the amount of Flash storage available. I'm actually surprised that I use as many features as I do, it was not the pattern for older call phones.


Dave
post #39 of 50
Quote:
Originally Posted by samanjj View Post

I love using bluetooth to connect my iphone to my macbook pro and then connecting the macbook pro to my wife's macbook air using direct pc-to-pc wifi connection and letting her share my internet link.

A helluva lot easier than letting her share your gf. I always seem to get a connection error when trying that.
post #40 of 50
Quote:
Originally Posted by Quadra 610 View Post

A helluva lot easier than letting her share your gf. I always seem to get a connection error when trying that.

not sure what you mean? let me know the issue and maybe i can help
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