Apple struggles to meet iPhone 4, iPad, MacBook Air demand in China
Apple's hottest products are facing significant demand in China, with the 11-inch MacBook Air, certain versions of the iPad, and the iPhone 4 all facing shortages.
Analyst Brian White with Ticonderoga Securities is continuing his tour of the Far East, and on Monday provided investors an update on his second day in China. Though he noted the iPad and 11-inch MacBook Air, in particular he found the iPhone 4 to be Apple's most difficult product to purchase.
He said wait times are around two months and carrier China Unicom is unable to fulfill about a third of preorders. Apple's interest in the market is seen as positive because of the growth opportunities in China.
"Most of the carriers agree that the high-end smartphone opportunity in China is approximately 100-125 million subscribers, which we view as the addressable market for the iPhone," White wrote.
The iPhone 4 debuted on network China Unicom in September, and posted strong sales of 100,000 in its first four days. Since then, limited supply has led to extensive scalping, which forced Apple to require reservations for iPhone buyers.
Though China Mobile is not an official iPhone carrier, White said he believes it has the most iPhones on its network with about 2 million. To help capitalize on that, the carrier plans a tenfold increase in mobile application developers in the first quarter of 2011.
In November, China Mobile set up a website to help users trim their SIM card to fit inside the iPhone 4, which requires a microSIM. The carrier indicated to White it has plans to create a SIM card that will work with the iPhone 4.
Finally, Chinese CDMA-based carrier China Telecom is also viewed as a potential partner for Apple. White said he believes the company is "well positioned" to begin selling the iPhone in 2011.
The carrier has been rumored to be in talks with Apple since October. Apple is expected to build a CDMA iPhone for launch on the Verizon network in the U.S. in early 2011.
Analyst Brian White with Ticonderoga Securities is continuing his tour of the Far East, and on Monday provided investors an update on his second day in China. Though he noted the iPad and 11-inch MacBook Air, in particular he found the iPhone 4 to be Apple's most difficult product to purchase.
He said wait times are around two months and carrier China Unicom is unable to fulfill about a third of preorders. Apple's interest in the market is seen as positive because of the growth opportunities in China.
"Most of the carriers agree that the high-end smartphone opportunity in China is approximately 100-125 million subscribers, which we view as the addressable market for the iPhone," White wrote.
The iPhone 4 debuted on network China Unicom in September, and posted strong sales of 100,000 in its first four days. Since then, limited supply has led to extensive scalping, which forced Apple to require reservations for iPhone buyers.
Though China Mobile is not an official iPhone carrier, White said he believes it has the most iPhones on its network with about 2 million. To help capitalize on that, the carrier plans a tenfold increase in mobile application developers in the first quarter of 2011.
In November, China Mobile set up a website to help users trim their SIM card to fit inside the iPhone 4, which requires a microSIM. The carrier indicated to White it has plans to create a SIM card that will work with the iPhone 4.
Finally, Chinese CDMA-based carrier China Telecom is also viewed as a potential partner for Apple. White said he believes the company is "well positioned" to begin selling the iPhone in 2011.
The carrier has been rumored to be in talks with Apple since October. Apple is expected to build a CDMA iPhone for launch on the Verizon network in the U.S. in early 2011.
Comments
We have plenty of Nokia N8's, Galaxy S's and Desire HD's and have no choice but to cross sell to those.
When you have targets to meet and bills to be paid not having iPhones obviously doesn't give us much choice but to sell something else.
Apple aren't struggling in China. They are struggling almost everywhere. Here we have a month waiting for iPhone 4 and that's when you're lucky.
Where is here?
Apple is generally so good about getting supply to meet demand after a few weeks at most. The fact that the iPhone 4 was introduced in the summer and they still haven't caught up to demand suggests that they were completely caught off guard by the demand for this product. I don't think I've seen Apple have this much trouble responding to demand for a product since they introduced the Mac LC and IIsi (although that situation was actually far worse)
Imagine how much more struggle Apple will have if they release multiple models each year like all the other smartphone manufacturers.
And therein lies the magic of Apple. Sure, they know what they excel at (product design, software, marketing, customer support), but they also know what their limitations are (supply/demand, man-power, etc), and plan accordingly. Apple could never keep up with the amount of different hardware someone like Samsung pushes out every month, let alone every year, so they focus all of their attention on one singular product, make it as close to perfect as they possibly can in the time frame they are given, and advertise the hell out of it. Not only does the consumer get the benefit of consistency, but they are purchasing from a company that has their heart and soul invested in that product, and that gives me a comfortable feeling knowing I will be supported when and if anything happens.
Not only does the consumer get the benefit of consistency, but they are purchasing from a company that has their heart and soul invested in that product, and that gives me a comfortable feeling knowing I will be supported when and if anything happens.
I think this is an important point that I'm sure some people will totally misunderstand.
When you look at the labyrinth of products offered by companies like Samsung, HP, etc, what you're really seeing is an effort by those companies to shirk responsibility for product development. Instead of doing the hard work of figuring out what the optimal feature balance is, they throw everything they can think of up on the wall to see what sticks. Basically they leave it up to their customers to figure out which feature combinations work and which don't. Some people would trumpet this as "freedom", but it's really just imposing a lot of costs on customers.
Some people would trumpet this as "freedom", but it's really just imposing a lot of costs on customers.
Well, in a way it is "freedom". I have the freedom to not buy that crap
Apple aren't struggling in China. They are struggling almost everywhere. Here we have a month waiting for iPhone 4 and that's when you're lucky.
Curious, which country is this? I agree BTW.
Interesting... I had assumed that when the iPhone went to 24 hour availability on the US Apple Store that it meant the supply problems were resolved. I guess not. Maybe Apple has to give AT&T first dibs on phones?
Apple is generally so good about getting supply to meet demand after a few weeks at most. The fact that the iPhone 4 was introduced in the summer and they still haven't caught up to demand suggests that they were completely caught off guard by the demand for this product. I don't think I've seen Apple have this much trouble responding to demand for a product since they introduced the Mac LC and IIsi (although that situation was actually far worse)
As I mentioned previously, remember how there was big fanfare when Apple started selling iPhones through it's Apple Online Store China? The Online Store has been listing iPhone 4 as NO SUPPLY for at least a few weeks now. Like literally, "we have no idea when this will be sorted out".
http://translate.google.com/translat...o%3DOTY2ODA2OQ
And this is even with a limit of 1 per customer.
In any case, China is the new Wild West. Supply problems are not helped by extremely high levels of scalping. I guess they are not as crazy about Android and so on over there. Or maybe demand is just too insane. China. Madness.
Apple should get together with Foxconn and allow a Build-Your-Own Mac workshop. I bet they could even charge extra for this service.
Yup... I can see the brochure now. "Be a Chinese manufacturing slave for a day! Experience the boredom, repetition and futility Foxconn-style!"