Shipping delays continue to dog Apple's 4" iPhone SE

Posted:
in iPhone edited June 2016
Two and a half months after the launch of the Apple iPhone SE, the company still hasn't caught up with demand -- a somewhat surprising issue for Chief Executive Tim Cook, whose noted strengths are in logistics and operations.




As of this week's annual Worldwide Developers Conference, U.S. Apple retail stores are still reporting two-plus-week wait times for new orders of the 4-inch iPhone SE. The handset launched in late March and supply has been constrained ever since.

In April, rumblings from Apple's supply chain claimed that Apple had increased orders for the iPhone SE, planning to build more than 5 million units in the quarter to keep up with demand. Those efforts, if accurate, don't appear to have paid off yet, with demand continuing to outstrip supply into the summer.

Consumer interest in the iPhone SE also remains greater than supply overseas, where customers also face similar wait times.




Apple's apparent inability to satisfy iPhone SE demand contrasts with the company's preparation for the launch of the Apple Watch last year, when shipping times had drastically improved just a few months after launch. While estimated deliveries were advertised at four-to-six weeks after the April 2015 launch, shipment waits had decreased to under a week by early June.

Earlier this year, Apple said iPhone SE demand is being driven by iPhone users who prefer smaller form factors, as well as switchers from other brands. Aggressive pricing is also driving sales with a $399 starting price for 16 gigabytes representing the lowest entry point for a new iPhone ever.

"We're thrilled with the response that we've seen on it," Cook said of the iPhone SE during his company's quarterly results conference call in April . "It's clear there's a demand there that's much beyond what we thought, which is why we have the constraint that we have."
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Comments

  • Reply 1 of 57
    phone-ui-guyphone-ui-guy Posts: 1,018member
    Why ding Cook on Logistics and Operations when what he really lacked was a Crystal Ball to know exactly how successful the SE would be? Now that they are getting to know more of what they need, I'm sure that logistics and operations knowledge is helping them close the gap faster than most people would. But what are you going to do when you get the mother of all 4in backlogs.

    Sounds more like Cook should be praised for pursuing the SE in general. 
    edited June 2016 mike1ai46magman1979pscooter63kevin keelolliverroundaboutnowcornchipericthehalfbeepulseimages
  • Reply 2 of 57
    I think the pricing is definitely the main thing driving sales. A lot of people will always buy the cheapest model, even if they have the means to buy the more expensive ones.  I know a few people like that myself. One of them has at least a million dollars at their disposal, but always buys the cheapest iPhone. Now the cheapest phone is as fast as the most expensive, I don't even bother advising against it any more.
    asdasd
  • Reply 3 of 57
    But I was assured this phone was uninteresting and uninspired and no one wanted it.
    mike1Eric_WVGGlkruppstanthemandouglas baileyai46magman1979mattinozchiacornchip
  • Reply 4 of 57
    saltyzipsaltyzip Posts: 193member
    Apple don't want to sell too many of these as no doubt the profit margin is miniscule compared to the flagships. I suspect Apple wont up the se supply as it will likely  impact the iphone 7 supply chain.
    jonlbobschlobnostrathomas
  • Reply 5 of 57
    mpiratempirate Posts: 8member
    Hard to tell what this means, but it is surprising. Either demand is VERY strong, or something odd is happening. The more likely reason would seem to be very strong demand, any other ideas or explanations?

    Just_Iain
  • Reply 6 of 57
    staticx57staticx57 Posts: 399member
    But I was assured this phone was uninteresting and uninspired and no one wanted it.
    I heard that big phones were a joke and would never take off. No surprise people want the 4"!???
    phone-ui-guy[Deleted User]monstrosity
  • Reply 7 of 57
    wood1208wood1208 Posts: 1,988member
    There is nothing out their in smaller size phone with such capability as iphone SE. Since IOS 10 will let you remove native/stock Apps and replace with the 3rd party Apps than iphone SE 16GB storage for the normal usage will not be as problematic as we think now. Those with lots of Apps,photos,videos will go with 64GB iphone SE so no debate their.
    edited June 2016 cornchip
  • Reply 8 of 57
    irelandireland Posts: 17,649member
    I think the pricing is definitely the main thing driving sales.
    Ding.

    $399 in the states and €499 in EU it's a great phone for the price.
    stanthemanJust_Iain
  • Reply 9 of 57
    croprcropr Posts: 954member
    Delay in supply can be caused by 3 factors:  higher demand than anticipated, a shortage of components and production problems.  Or it could be a combination of the 3.  Because the first 2 points can be addressed in a few weeks time, at least a part of the delay must be due to production problems. 

  • Reply 10 of 57
    phone-ui-guyphone-ui-guy Posts: 1,018member
    cropr said:
    Delay in supply can be caused by 3 factors:  higher demand than anticipated, a shortage of components and production problems.  Or it could be a combination of the 3.  Because the first 2 points can be addressed in a few weeks time, at least a part of the delay must be due to production problems. 


    If they miss the forecast for demand, I don't think they can recover in a few weeks. If they could, they would have been able to recover in a few weeks at every launch. It takes time for the component suppliers to start cranking out more parts and the assemblers to put more together. Bringing new manufacturing lines online takes time. Didn't the 6 and 6Plus take almost a whole quarter to come into balance? They probably thought this would do better than the 5C, but were surprised by just how much better it did.
    edited June 2016 ai46chialollivercornchipbaconstangJust_Iain
  • Reply 11 of 57
    OBVIOUSLY Apple is restriction supply to keep margins in line. A company that can source 250m iPhones in a year must be able to meet demand for a paltry one million a month demand for iPhone SE (which so far makes only 1% of apple installed base) ESPECIALLY during a fiscal year where the flagship product is suffering. It's as obvious as trump's craziness.
    radarthekatlilsmirky
  • Reply 12 of 57
    I would get one. Apple Pay, top line camera, fast processor. It's everything the 5S should have been.
  • Reply 13 of 57
    wood1208 said:
    Since IOS 10 will let you remove native/stock Apps and replace with the 3rd party Apps than iphone SE 16GB storage for the normal usage will not be as problematic as we think now.
    Stock Apps are not actually deleted (or re-downloaded). It probably seemed like they would be to some because removing stock apps from the home screen is done in the same way as removing (deleting) 3rd party apps but Craig clarified what's happening in an interview reported here: http://iphone.appleinsider.com/articles/16/06/15/apple-svps-schiller-and-federighi-discuss-siri-messages-and-more-in-qa-session
    lolliver
  • Reply 14 of 57
    Switched from iPhone 6 to SE on release day and haven't regretted it at all.

    Long live 4" iPhones.
    baconstangbdkennedy1002pulseimages[Deleted User]
  • Reply 15 of 57
    foggyhillfoggyhill Posts: 4,767member
    This is more a marketing mistep (a nice one to have) than a production mistep..
    Estimating demand is always a hard things to do; it's only when people buy something that you actually know how much demand there really is./
  • Reply 16 of 57
    foggyhillfoggyhill Posts: 4,767member
    wood1208 said:
    There is nothing out their in smaller size phone with such capability as iphone SE. Since IOS 10 will let you remove native/stock Apps and replace with the 3rd party Apps than iphone SE 16GB storage for the normal usage will not be as problematic as we think now. Those with lots of Apps,photos,videos will go with 64GB iphone SE so no debate their.
    Native apps will only be hidden, not really removed so that won't change much. Even if they were removed, they're just front end for system services so your not gaining much space by removing them.
    lollivercornchipmonstrosity
  • Reply 17 of 57
    cnocbuicnocbui Posts: 3,613member
    If the camera sensor is made by Sony then the Kumamoto earthquakes putting their fab out of commission is one possible explanation.  Forthcoming models of Panasonic and Olympus cameras have had their releases delayed possibly into next year, rather than September.
    lollivercornchipbaconstang
  • Reply 18 of 57
    command_fcommand_f Posts: 297member
    So there really are many of us 4" hold-outs after. Perhaps that means there'll be another 4" phone in a year or two so I neither have to keep my SE as long as I kept my 5s nor change my wardrobe for clothes with bigger pockets.

    I love my SE as much as I loved my 5s. Apple's fastest phone is certainly snappy  B)
    lollivercornchipbaconstangbdkennedy1002[Deleted User]
  • Reply 19 of 57
    wood1208 said:

    Since IOS 10 will let you remove native/stock Apps and replace with the 3rd party Apps than iphone SE 16GB storage for the normal usage will not be as problematic as we think now. Those with lots of Apps,photos,videos will go with 64GB iphone SE so no debate their.
    Even if you have a 16GB iPhone... the stock apps aren't anywhere close to taking up a lot of space.

    I've seen people with 5,000 photos on their phone.  THAT'S the problem.

    It's not the Calculator app or Tips app taking up all that space. :) 
    lollivercornchipradarthekatbaconstang
  • Reply 20 of 57
    sacto joesacto joe Posts: 754member
    Interesting. I just posted something about this on Braeburn Group.

    Here are the iPhone sales numbers since Q1 fy ‘11, with Q1 bolded.
    16,235
    18,647
    20,338
    17,073
    37,044
    35,064
    26,028
    26,910
    47,789
    37,603
    31,241
    33,797
    51,025
    43,719
    35,203
    39,272
    74,468
    61,170
    47,534
    48,050
    74,779
    51,193

    BIG jump (128%) when Apple moved the iPhone release date 3 months closer to the holidays in 2011 (Q1 fy '12). Then only a moderate jump in '13 (29%), and a smaller jump in '14 (7%). Q1 '13 and Q1 '14 were the 5 and 5s models respectively. Finally, another big jump in '14 with the 6 (47%) and flat in '15.

    IMHO, this, and Apple's lack of ability to match demand for the SE, reveals the "smoking gun" of what happened to production in '13 and '14; the 5 series was just flat harder to produce than the 4 series or the 6 series. My guess of the problem: The highly milled edges of the aluminum housing. As an ex-CNC machinist, I can guarantee you that you can't make those edges quickly.

    Note that the 6 series doesn't have milled edges, and hence is far easier to ramp up production on.

    BTW, I think the 5 series was one of the most beautiful iPhones ever produced. Just a shame that it's so hard to make....

    ai46radarthekatbb-15baconstangicoco3
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