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

Posted:
in iPhone edited January 2014
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."
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Comments

  • Reply 1 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.
  • Reply 2 of 76
    This report is bullshit. We all know that supply is being constrained by Apple as a marketing ploy.



    </s>
  • Reply 3 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.
  • Reply 4 of 76
    tylerk36tylerk36 Posts: 1,037member
    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.
  • Reply 5 of 76
    The new low end iPhone? It will be the iPhone 4 just as soon as the iPhone 5 hits the market.
  • Reply 6 of 76
    mstonemstone Posts: 11,510member
    Probably something coming from Japan. Tsunami related.
  • Reply 7 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>



  • Reply 8 of 76
    irnchrizirnchriz Posts: 1,581member
    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.
  • Reply 9 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.
  • Reply 10 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?
  • Reply 11 of 76
    MarvinMarvin Posts: 14,209moderator
    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.
  • Reply 12 of 76
    irnchrizirnchriz Posts: 1,581member
    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.
  • Reply 13 of 76
    mstonemstone Posts: 11,510member
    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'.
  • Reply 14 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?
  • Reply 15 of 76
    thomprthompr Posts: 1,511member
    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
  • Reply 16 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.
  • Reply 17 of 76
    tzeshantzeshan Posts: 1,894member
    Apple should sell a low end iPhone that will function only as a hotspot besides being a phone.
  • Reply 18 of 76
    irnchrizirnchriz Posts: 1,581member
    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.
  • Reply 19 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?
  • Reply 20 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).
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