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'Key component' said to be limiting Apple's iPhone 4S supply

post #1 of 76
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Supply constraints remain Apple's only issue in meeting strong demand for the new iPhone 4S, with one new report claiming those constraints are being caused by limited availability of one crucial component.

Exactly what that component is, analyst Ashok Kumar with Rodman & Renshaw did not say. But in a note to investors on Tuesday, he said that production of the iPhone 4S is likely to be constrained in the current holiday quarter "due to low yields on a key component."

In all, he expects total iPhone shipments in the September quarter to be around 30 million units, which he believes would be below Wall Street expectations. That total of 30 million iPhones would include an estimated 4 million iPhone 4S units that were said to have been manufactured, but not shipped, in the September quarter.

Long waits for the iPhone 4S continued at Apple's carrier partners in the U.S. more than a month after the handset went on sale. Earlier this month, The Wall Street Journal noted that Verizon Wireless and AT&T customers had to wait an average of three weeks for their iPhone 4S to arrive, while those purchasing through Sprint saw a two-week wait.

Kumar believes that iPhone market share in the premium, high-priced smartphone segment has "likely peaked" around 85 percent. Going forward, he expects the "value priced segment" of the smartphone market to demonstrate the most growth.



In that segment, Apple competes with its iPhone 3GS, first released in 2009. The legacy device is available for 99 cents with a new two-year service contract.

But Kumar doesn't believe the iPhone 3GS will be enough for Apple to maintain its overall market share, particularly with an anticipated growing market at the low end of the pricing spectrum.

"Repositioning the legacy 3GS at the entry level buys Apple time, but it is a dated product with limited shelf-life," Kumar wrote. "A (purpose-built) lower end SKU is key for Apple to grow share."

While Kumar believes Apple needs to build a new low-end iPhone to maintain its growth, recent reports have indicated that the iPhone 3GS continues to be a top performer for Apple. For example, earlier this month the NPD Group revealed that the iPhone 3GS was the second-best selling US smartphone in the third quarter of 2011, finishing behind only Apple's iPhone 4, and beating out newer Android-powered devices like the HTC EVO 4G, Motorola Droid 3 and Samsung Intensity II.

Despite Kumar's calls for a new low-end iPhone, he also believes that the competition continues to lag behind Apple. Nokia, in particular, is said to be struggling with its newly launched Windows Phone, and Kumar said sales of the Lumia 800 have been "underwhelming."

As for Research in Motion, HTC and Motorola, Kumar said those three companies are "treading water with a lackluster product lineup." The only non-Apple company the analyst sees in a strong position is Samsung, which he said has a "comprehensive product portfolio and aggressive pricing."
post #2 of 76
Quote:
Originally Posted by AppleInsider View Post

Supply constraints… …are being caused by limited availability of one crucial component.

The key component? Undesirability.
post #3 of 76
This report is bullshit. We all know that supply is being constrained by Apple as a marketing ploy.

</s>
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post #4 of 76
It's unicorn hair, isn't it? The low yields are the unicorn hairs. Apple doesn't just buy any unicorn hair, it has to be groomed from a magical section from the unicorn's mane.

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post #5 of 76
Well I suspect that the key component that is short is either the Screen or the sensor for the camera.

As for the 3GS, I see that Phone as a great compensator to an iPhone 4 or 4S shortage. I would suspect that Apple has the factories pumping out the 3GS at a reasonable pace in comparison to the 4 and 4S.
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post #6 of 76
The new low end iPhone? It will be the iPhone 4 just as soon as the iPhone 5 hits the market.
post #7 of 76
Probably something coming from Japan. Tsunami related.

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post #8 of 76
Surely the iPhone 4 is the fastest selling electronic device on the planet (based on the seemingly arbitrary 60 days timeframe) besting the Kinect accessory by a large margin. So why no mention of this in the news?


Quote:
Originally Posted by island hermit View Post

This report is bullshit. We all know that supply is being constrained by Apple as a marketing ploy.

</s>

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post #9 of 76
Its the 3G chip. Its because its fucked and doesn't work properly. Have cellular data on and wifi and every single inbound call drops. Enable either or and it works fine.

Awaiting my replacement 4S from Apple as I type.
post #10 of 76
Quote:
Originally Posted by skipaq View Post

The new low end iPhone? It will be the iPhone 4 just as soon as the iPhone 5 hits the market.

Six.

Well, yeah. That's how Apple does it every year.
post #11 of 76
Quote:
Originally Posted by irnchriz View Post

Its the 3G chip. Its because its fucked and doesn't work properly. Have cellular data on and wifi and every single inbound call drops. Enable either or and it works fine.

Awaiting my replacement 4S from Apple as I type.

I agree that there is an issue with this new baseband chip but wouldn't what you describe be a firmware or OS issue since were talking two distinct chips for cellular and WiFi, not the ability for Qualcomm to supply the component?

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post #12 of 76
Quote:
Originally Posted by tylerk36 View Post

Well I suspect that the key component that is short is either the Screen or the sensor for the camera.

I wonder if it's one made by Samsung.

If they are talking low yield, it might be their A5 chips, which I think are produced by Samsung.
post #13 of 76
Quote:
Originally Posted by SolipsismX View Post

I agree that there is an issue with this new baseband chip but wouldn't what you describe be a firmware or OS issue since were talking two distinct chips for cellular and WiFi, not the ability for Qualcomm to supply the component?

I hoped it would be a firmware issue. Tried to replicate this on 2 other iPhone 4S handsets but couldn't.

Changed the SIM card for a 128k USIM but no difference. Went through all of this with Apple support including DFU restore and boom, still dropping inbound calls. You get to say hello then "call failed" on the screen. Worked fine from launch up until a week ago.
post #14 of 76
Quote:
Originally Posted by Tallest Skil View Post

Six.

Well, yeah. That's how Apple does it every year.

Quote:
Originally Posted by skipaq View Post

The new low end iPhone? It will be the iPhone 4 just as soon as the iPhone 5 hits the market.

I wonder how many sad emoticons the forum software lets you type in a row. If Apple doesn't deliver a phone named iPhone 6 you are probably going to use them all. I don't understand why you are so emotionally wrapped up in that name. Personally I wish they would just drop the numbering altogether like all their other products. I have a MBP and if you need more clarification it is 'early 2010'.

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post #15 of 76
"In all, he expects total iPhone shipments in the September quarter . . . ." And WHICH quarter would that be, exactly? September, October, and November? Hmmm. Interestingly, Apple considers its fiscal Q1 to be October, November, and December, so what might THIS ANAL-YST be thinking of?
post #16 of 76
Quote:
Originally Posted by irnchriz View Post

I hoped it would be a firmware issue. Tried to replicate this on 2 other iPhone 4S handsets but couldn't.

Changed the SIM card for a 128k USIM but no difference. Went through all of this with Apple support including DFU restore and boom, still dropping inbound calls. You get to say hello then "call failed" on the screen. Worked fine from launch up until a week ago.

Apple should replace your phone then, if they have tried to fix it but failed. They have diagnostic tools that will confirm you are dropping calls. They can tell its defective and that their attempts to resolve the issue have failed. That should be all you need to be given a new unit.

Thompson
post #17 of 76
Quote:
Originally Posted by mstone View Post

I wonder how many sad emoticons the forum software lets you type in a row.

Ten.



Of course, that's total, too.

Quote:
Personally I wish they would just drop the numbering altogether like all their other products. I have a MBP and if you need more clarification it is 'early 2010'.

If they're going to sell three years' worth of product at once, different names are required.
post #18 of 76
Apple should sell a low end iPhone that will function only as a hotspot besides being a phone.
post #19 of 76
Quote:
Originally Posted by thompr View Post

Apple should replace your phone then, if they have tried to fix it but failed. They have diagnostic tools that will confirm you are dropping calls. They can tell its defective and that their attempts to resolve the issue have failed. That should be all you need to be given a new unit.

Thompson

Yep, waiting on delivery of the replacement.
post #20 of 76
Quote:
Originally Posted by tzeshan View Post

Apple should sell a low end iPhone that will function only as a hotspot.

So not a phone, then?
post #21 of 76
Given Apple's attention to detail, it's most likely that they misspelled the copyright line on the circuit board (2011 APPL INC).
post #22 of 76
I wonder if Samsung would stoop so low as to hold back production of an iPhone 4S component.
In an attempt to slow down iPhone 4S sales.

Just a thought.

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post #23 of 76
I think there may be a few companies out there that would kill to have the kind of problems Apple struggle with.
post #24 of 76
The 3GS model is blowing the doors off. It is free, runs iOS5 and iCloud, and has access to most Apps. It's pretty silly for this analyst to dismiss it so readily

I love Apple's strategy of moving the older products down the price ladder. As someone above just said, Apple is simply going to move the iPhone 4 to the free step. And there is going to be huge, huge demand

By producing a model for several years, Apple gains enormous economies of scale and declining product build costs. It is a phenomenal model that no one in the industry is able to replicate

Apple does not need "brand new" lost price phones. It just needs to keep doing what it is doing. In 3 years, the iPhone 4S will be offered for free. Let's see what the demand is then

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post #25 of 76
Lolz, we were discussing this last night.

What key component are we talking about? The processor?
post #26 of 76
Quote:
Originally Posted by mstone View Post

Probably something coming from Japan. Tsunami related.

More likely Thailand related, due to the more recent flooding.

Or it could be due to a transition period, such as a supplier going from making 3.5" displays to 4.0" or 9.7" retina displays.
post #27 of 76
Quote:
Originally Posted by tylerk36 View Post

Well I suspect that the key component that is short is either the Screen or the sensor for the camera.

As for the 3GS, I see that Phone as a great compensator to an iPhone 4 or 4S shortage. I would suspect that Apple has the factories pumping out the 3GS at a reasonable pace in comparison to the 4 and 4S.

The problem with the 3GS is not so much that it is "dated", but that it is only available on AT&T in the US. Apple needs the iPhone 4S, which is a world phone, to be the free phone next year, so that all the carriers carry a free iPhone.
post #28 of 76
Quote:
Originally Posted by addicted44 View Post

The problem with the 3GS is not so much that it is "dated", but that it is only available on AT&T in the US. Apple needs the iPhone 4S, which is a world phone, to be the free phone next year, so that all the carriers carry a free iPhone.

That's a lot of money to lose, and were would that put the iPhone 4?
post #29 of 76
Quote:
Originally Posted by Tallest Skil View Post

If they're going to sell three years' worth of product at once, different names are required.

Good point.

Maybe they should use the comma delimited format then. iPhone (4,1)

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post #30 of 76
The key component is "magic"
post #31 of 76
Quote:
Originally Posted by Tallest Skil View Post

The key component? Undesirability.

This is the kind of crap we get from an AI moderator?
post #32 of 76
Quote:
Originally Posted by lkrupp View Post

This is the kind of crap we get from an AI moderator?

I don't understand.
post #33 of 76
Clever way of constraining the stock.
post #34 of 76
Quote:
Originally Posted by Tallest Skil View Post

I don't understand.

Lol, I'm lost too.
post #35 of 76
Quote:
Originally Posted by lkrupp View Post

This is the kind of crap we get from an AI moderator?

Being a moderator doesn't mean you have to be fanboy.
post #36 of 76
Quote:
Originally Posted by TheShepherd View Post

Being a moderator doesn't mean you have to be fanboy.

But being a moderator means one should make thoughtful, intelligent remarks. For example, "undesirability" does not explain sold-out stores.
post #37 of 76
Quote:
Originally Posted by Cpsro View Post

But being a moderator means one should make thoughtful, intelligent remarks. For example, "undesirability" does not explain sold-out stores.

Oh, good; it's just a misunderstanding of the wording of my post. Phew!

I'll append a sentence:

Supply constraints are being caused by limited availability of one crucial component. The key component? Undesirability. Lack of undesirability is causing supply constraints of the iPhone 4S.
post #38 of 76
Quote:
Originally Posted by SockRolid View Post

I wonder if Samsung would stoop so low as to hold back production of an iPhone 4S component.
In an attempt to slow down iPhone 4S sales.

Just a thought.

That's risky business. It's also illegal. In addition, it wouldn't be good for Samsung. Their other customers would wonder if Samsung would do that to them as well.

Apple has had supply problems for years. A number of components are made by small manufacturers. If they have a problem, output suffers, and so do their customers. It's a reason why Apple went to Sony for their 4s camera chips this year.
post #39 of 76
Quote:
Originally Posted by Red Oak View Post

The 3GS model is blowing the doors off. It is free, runs iOS5 and iCloud, and has access to most Apps. It's pretty silly for this analyst to dismiss it so readily

I love Apple's strategy of moving the older products down the price ladder. As someone above just said, Apple is simply going to move the iPhone 4 to the free step. And there is going to be huge, huge demand

By producing a model for several years, Apple gains enormous economies of scale and declining product build costs. It is a phenomenal model that no one in the industry is able to replicate

Apple does not need "brand new" lost price phones. It just needs to keep doing what it is doing. In 3 years, the iPhone 4S will be offered for free. Let's see what the demand is then

It's still selling pretty well, which is amazing. But still, it's rather old in the tooth. This causes several problems for Apple, it's developers, and their customers (us).

For example, the 4 is much more powerful than the 3GS. But games are still aimed at the 3GS because of the still large customer base. This is from game industry sources. That means that games, and other apps are limited in what they can do. It doesn't mean that nothing is aimed at the newer models, but that a large proportion of things aren't.

If the 3GS is selling well, just think of how well a new model at that price would sell. That's not just free, or $0.99, which is what AT&T is selling it for now, for some odd reason. It's also the $375 or so it's selling for as an unlocked model in some other countries.

It's now more than 2.5 years old, decidedly a dinosaur in cell phone age measurements.
post #40 of 76
Quote:
Originally Posted by extremeskater View Post

Did the iPhone 4 sell more then 8 Billion units in 60 days? Honest question. As of Oct 31 2011 Guinness World Records is still listing the Kinect as the leader.

I can't imagine they haven't. They sold 4 million in 3 days in 5 countries and now they building up those up faster than ever before. On November 11th alone they launched in 15 more countries. Is it really possible they didn't sell another 4 million since launch, much less 57 days after launching. I think they smoked the Kinect sales record by a wide margin.

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