Apple product launches face months of delays over supply chain backlog
Multiple supply chain analysts suggest future iPhones may see release dates slip by as much as two months due to coronavirus concerns.
All of the latest iPhone models appear to be supply constrained
In an investor note from Bank of America, it is suggested the "iPhone 12" that may feature 5G will be delayed by a month. The information comes from supply chain expert Elliot Lan, who also suggests delays of up to two months for the unannounced "iPhone SE 2."
Another analyst at Bank of America, Wamsi Mohan, says that launch timing will depend on the production ramp-up between now and May. The investor note contents were detailed in a report from Bloomberg which does not offer much more information on the subject.
The COVID-19 coronavirus has continued to spread over the past few months, and has since reached a global infection total of over 100,000 people. The CDC says around half of those infected have recovered, however.
Coronavirus cases versus deaths
The news of supply chain restraints and delayed shipments is nothing new. AppleInsider has been covering the spread of the virus and how it may affect Apple since January.
The latest reports place the coronavirus in the United States, which has caused a large shift in economic conditions. New York City retailers were saying they no longer received new shipments of iPhone 11 models, and blame the conditions in China.
Apple has already suggested their staff work from home, which is becoming the norm as the outbreak spreads. After similar events in China, tablet sales went up overall, as people adjusted to working from home. It is yet to be seen how quarantine in the United States will affect sales of Apple products.
Despite all of this, Tim Cook is certain that the situation is under control and that the supply constraints will only be felt for a short time. The Apple supply chain is diverse and can be manipulated to avoid such catastrophe, the issue is, now that the coronavirus is outside of China, it is very hard to avoid.
All of the latest iPhone models appear to be supply constrained
In an investor note from Bank of America, it is suggested the "iPhone 12" that may feature 5G will be delayed by a month. The information comes from supply chain expert Elliot Lan, who also suggests delays of up to two months for the unannounced "iPhone SE 2."
Another analyst at Bank of America, Wamsi Mohan, says that launch timing will depend on the production ramp-up between now and May. The investor note contents were detailed in a report from Bloomberg which does not offer much more information on the subject.
The COVID-19 coronavirus has continued to spread over the past few months, and has since reached a global infection total of over 100,000 people. The CDC says around half of those infected have recovered, however.
Coronavirus cases versus deaths
The news of supply chain restraints and delayed shipments is nothing new. AppleInsider has been covering the spread of the virus and how it may affect Apple since January.
The latest reports place the coronavirus in the United States, which has caused a large shift in economic conditions. New York City retailers were saying they no longer received new shipments of iPhone 11 models, and blame the conditions in China.
Apple has already suggested their staff work from home, which is becoming the norm as the outbreak spreads. After similar events in China, tablet sales went up overall, as people adjusted to working from home. It is yet to be seen how quarantine in the United States will affect sales of Apple products.
Despite all of this, Tim Cook is certain that the situation is under control and that the supply constraints will only be felt for a short time. The Apple supply chain is diverse and can be manipulated to avoid such catastrophe, the issue is, now that the coronavirus is outside of China, it is very hard to avoid.
Comments
The whole mood around the company is surprisingly upbeat. They're basically writing off the first two quarters of the year; they're well-financed, so it's not really that big a deal. They're focusing on buckling down and using the opportunity to improve the product and knock it out of the park this fall.
Apple could similarly view this is as an opportunity. If iPhone releases get punted to late November, that gives them a huge window to really nail down all the issues with the new OS, which we all know has been turning into an annual disaster.
One of the advantages Apple touts regarding China and other regional countries' manufacturing is that it can ramp up on a figurative dime. You can bet that once the highest levels of danger have been resolved -- and that's going to happen in China first, I would guess -- the largest call for factory workers in the history of the tech sector will go out. Apple will also use some of their considerable reserves to help ensure that the holiday quarter offers as many products as it is humanly possible to get into stores to help make up for this early-year production delay.
Do you really think that Chinese consumers are going to be buying consumer electronic devices in the same sales volumes as last year, for the next two to three quarters?
Example, look at auto sales in China;
https://finance.yahoo.com/news/auto-sales-china-log-biggest-140402126.html
"According to China Passenger Car Association, new car sales in China plummeted 80% year over year in February 2020. This marked the biggest monthly plunge on record as coronavirus concerns kept showroom traffic very low.
On average, car sales fell to 7,100 units a day during the month compared with 45,000 units per day in February 2019. However, average daily sales improved toward the end of the month, to around 16,000 units per day in the fourth week from 811 units per day early in the month. Reports suggest that the passenger car sales in China tanked nearly 41% through the first two months of 2020, reflecting the largest sales decline in two decades."
iPads as videoconferencing tools, perhaps also tv hardware — not to mention the Apple Watch and its health-monitoring features — there’s a lot that could be done here to promote the remote-access and communications features of Apple’s systems. I’m not well-informed in this regard, so I don’t really know what is possible, but this could be an opportunity if it is handled right.
The virus is named SARS-CoV-2. COVID-19 is the name of the disease it causes. The World Health Organization doesn't want people to confuse this virus with the previous SARS virus so they refer to it as “the virus responsible for Covid-19” or “the Covid-19 virus”.
Isn’t it better to make more money and pay tax than not to make more money and not to pay tax?