The ratio is interesting as the 6+ is around 1/3 the 6 so that gives an idea of their expected demand for each, even though the 6+ output is increasing.
It's hard to glean anything useful from those figures, isn't it? Is the ratio 1/3 because of difficult assembly and low screen yields, or because that (plus whatever increase they manage in the coming weeks) is all Apple expects to sell?
Apple of course won't break down the numbers, they'll lump all 4 models together.
Which is unfortunate only because that will lead to endless arguing here over whether the Plus is actually popular or not. It'll make the spats over the 5C look like a polite handshake.
We presume they won't give a breakdown, but there's always a first time.
Yeah, that struck me as a weird thing to say, too. To me the real milestones were the original iPhone of course, then the 3GS with real GPS and the compass, the 4S with Siri, and the 5S with TouchID and 64-bit. YMMV, i suppose, but I see very little support for the theory that the "S" releases are less interesting.
but but but Apple hasn't innovatard in years!! Samsung is the true innovationists!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
So... the screen manufacturer has to increase production... but they have limited supply of materials.
So... the chip manufacturer has to increase production... but they have a limited supply of materials.
... and on and on down the chain... until we come to Foxconn... who is waiting for parts... and then, even if they get them, which is doubtful, they have to ask themselves... do we spend billions ramping up production to well beyond are capacity to manage it, especially with the thought that all that money might be spent and then Apple's orders drop... and what do they do with the excess capacity during lower quarters... it costs money to have these lines sitting idle.
As I mentioned... you just can't snap your fingers to get more production. It has become more and more obvious as Apple's demand for phones increases.
It's a huge problem that Cook will have to figure out.
Oh... and... by the way... there are probably more people wondering where the f*ck you are coming from...
Apple knows of any possible parts constraints way in advance. If the screen manufacturer can't produce enough screens to maintain the output Apple needs, Apple will contract another manufacturer to also produce screens for them. It is not uncommon to find 2 or 3 different manufacturers for the same part, on the same model iPhone. Even the same chip but made in different foundries. Apple is also willing to invest in the upgrade of a manufacturers plant, if that's what it takes, to get all the parts in the quantity they need. All of this figured out before they start production. It's not as though parts manufacturer has to see if they can ramp up their output in the middle of production. These manufacturer knows exactly the quantity Apple contracted for and most like paid for them ahead of time, with a premium. That's why we often hear of other hardware makers having a hard time getting parts because Apple bought out all the production them.
And if the quantity of iPhones is stuck at 65 million (your numbers) a quarter because certain parts are in short supply, it will not be stuck at that number forever and ever because when they design the new iPhone they will replace those parts with parts that can be manufactured in the quantities they need.
I'm pretty sure that as soon as the assembly line starts at Foxconn, it won't stop because of parts shortage. Unless there's an unforeseen event like an earthquake, fire or flood that shuts down one of their manufacturers plants. And even then, I'm sure Foxconn has enough supply of parts on hand to keep production going for maybe a week or two (plus the already built iPhones Apple has in the channel.), with the hope that the supply problem can be resolve before production has to stop. Foxconn is not some mom and pop operation. When operation starts, they know they will meet the output Apple set. If Apple predicted that they need 65 million iPhones a quarter, then that's what Foxconn will make sure they can deliver before they begin. If Apple predict that they will need 70 million iPhones a quarter when the new model comes out, then Foxconnn will do what it takes to make sure they can meet those numbers. If they have to start stocking parts 6 months ahead of production because of limited production numbers, that's what they will do.
And the constraint right now may not be as bad as it seems. I'm sure Apple can alleviate some of it by reducing what inventory they have in their channel. But Apple would rather have the person that ordered an iPhone in October, wait a few weeks for delivery than the person that orders one in December. Therefore, they don't want to enter the Xmas shopping season with less inventory than they think they might need, just incase of an unforeseen production problem.
the constraint right now may not be as bad as it seems.
On Apple's site, the 6 is listed at 7-10 business days and the 6+ 3-4 weeks so it's not like they've suspended orders or losing sales. The concern just comes from investors who want to see growth in Apple's quarterly unit volume year over year. 51m iPhones is their highest ever quarter but that's the next fiscal quarter anyway. If Apple doesn't meet the demand this quarter, it'll drive up units next quarter and show some growth. It's really nothing to worry about. The only people who should be worried are the likes of Samsung with falling profits and demand:
"Multiple Korean securities firms published reports on Tuesday expecting a hefty profit drop from Samsung's IT and mobile division for the period.
They cited lowered average sales price (ASP) from heated competition, absence of flagship phones during the quarter, and consumers waiting for Apple's iPhone 6 as some of the causes. Some have expected profits to drop near 40 percent from the previous year."
Comments
And if Apple sells what it's predicted, it's "Apple sales are flat." Or "Apple misses analysts' wildly unrealistic estimates."
We presume they won't give a breakdown, but there's always a first time.
but but but Apple hasn't innovatard in years!! Samsung is the true innovationists!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
So... the screen manufacturer has to increase production... but they have limited supply of materials.
So... the chip manufacturer has to increase production... but they have a limited supply of materials.
... and on and on down the chain... until we come to Foxconn... who is waiting for parts... and then, even if they get them, which is doubtful, they have to ask themselves... do we spend billions ramping up production to well beyond are capacity to manage it, especially with the thought that all that money might be spent and then Apple's orders drop... and what do they do with the excess capacity during lower quarters... it costs money to have these lines sitting idle.
As I mentioned... you just can't snap your fingers to get more production. It has become more and more obvious as Apple's demand for phones increases.
It's a huge problem that Cook will have to figure out.
Oh... and... by the way... there are probably more people wondering where the f*ck you are coming from...
Apple knows of any possible parts constraints way in advance. If the screen manufacturer can't produce enough screens to maintain the output Apple needs, Apple will contract another manufacturer to also produce screens for them. It is not uncommon to find 2 or 3 different manufacturers for the same part, on the same model iPhone. Even the same chip but made in different foundries. Apple is also willing to invest in the upgrade of a manufacturers plant, if that's what it takes, to get all the parts in the quantity they need. All of this figured out before they start production. It's not as though parts manufacturer has to see if they can ramp up their output in the middle of production. These manufacturer knows exactly the quantity Apple contracted for and most like paid for them ahead of time, with a premium. That's why we often hear of other hardware makers having a hard time getting parts because Apple bought out all the production them.
And if the quantity of iPhones is stuck at 65 million (your numbers) a quarter because certain parts are in short supply, it will not be stuck at that number forever and ever because when they design the new iPhone they will replace those parts with parts that can be manufactured in the quantities they need.
I'm pretty sure that as soon as the assembly line starts at Foxconn, it won't stop because of parts shortage. Unless there's an unforeseen event like an earthquake, fire or flood that shuts down one of their manufacturers plants. And even then, I'm sure Foxconn has enough supply of parts on hand to keep production going for maybe a week or two (plus the already built iPhones Apple has in the channel.), with the hope that the supply problem can be resolve before production has to stop. Foxconn is not some mom and pop operation. When operation starts, they know they will meet the output Apple set. If Apple predicted that they need 65 million iPhones a quarter, then that's what Foxconn will make sure they can deliver before they begin. If Apple predict that they will need 70 million iPhones a quarter when the new model comes out, then Foxconnn will do what it takes to make sure they can meet those numbers. If they have to start stocking parts 6 months ahead of production because of limited production numbers, that's what they will do.
And the constraint right now may not be as bad as it seems. I'm sure Apple can alleviate some of it by reducing what inventory they have in their channel. But Apple would rather have the person that ordered an iPhone in October, wait a few weeks for delivery than the person that orders one in December. Therefore, they don't want to enter the Xmas shopping season with less inventory than they think they might need, just incase of an unforeseen production problem.
On Apple's site, the 6 is listed at 7-10 business days and the 6+ 3-4 weeks so it's not like they've suspended orders or losing sales. The concern just comes from investors who want to see growth in Apple's quarterly unit volume year over year. 51m iPhones is their highest ever quarter but that's the next fiscal quarter anyway. If Apple doesn't meet the demand this quarter, it'll drive up units next quarter and show some growth. It's really nothing to worry about. The only people who should be worried are the likes of Samsung with falling profits and demand:
http://www.zdnet.com/samsung-q3-profits-to-plummet-korean-analysts-7000033059/
"Multiple Korean securities firms published reports on Tuesday expecting a hefty profit drop from Samsung's IT and mobile division for the period.
They cited lowered average sales price (ASP) from heated competition, absence of flagship phones during the quarter, and consumers waiting for Apple's iPhone 6 as some of the causes. Some have expected profits to drop near 40 percent from the previous year."
These results will come out late October.