iPhone 5 launch sales held back by limited supply

Posted:
in iPhone edited January 2014
Though sales of the iPhone 5 over its launch weekend broke records, the 5 million units sold by Apple came in below Wall Street expectations, as the company's limited supply was not able to keep up with considerable demand.

Analyst Gene Munster with Piper Jaffray said the sales shortfall is partially because he and others assumed Apple's sales figures would include all phones that were preordered online. He believes that would add up to a million additional units to the total sales, as the company quickly sold out of launch-day stock.

Munster also suggested that Apple may have rationed some of its iPhone 5 supply for the device's launch in 22 additional countries this Friday.

Brian Marshall with ISI Group also said in a note to investors that Apple's sales figures do not take into consideration units that are en route to customers. He said that Apple must have the signature of acceptance by a customer before the device can be counted as a sale.

As such, Marshall believes there could be millions of iPhone 5 units in transit to customers, which would further boost Apple's sales.

Brian White with Topeka Capital Markets is also not concerned about Apple's sales in the first three days. He said the shortfall is due to supply availability and the fact that many customers opted to preorder online and are still awaiting their handset.

"We remain aggressive buyers of Apple on any weakness in the stock this morning as we believe Apple has another blockbuster on its hands with the iPhone 5," White wrote, "and we expect the 'iPad mini' to launch in the coming weeks."

Unboxed


Munster believes Apple will be able to achieve a balance in supply and demand by the end of the December quarter. As a result, he said he remains comfortable with his projection of 49 million iPhone sales in the holiday shopping period.

Apple announced earlier Monday that sales of the iPhone 5 topped 5 million in its first weekend. That was an improvement on the 4 million iPhone 4S units Apple sold at launch in 2011, but was a number lower than most analysts expected.

In a statement, Apple Chief Executive Tim Cook said that demand for the iPhone 5 has been "incredible," and noted that his company sold out of its initial supply. The majority of preorders were said to be shipped to customers, but many preorders will not ship until October.
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Comments

  • Reply 1 of 40
    I'm still waiting, preordered on the 14th...delivery was suppose to be on the 21'st but ups screwed that up as always..and it's enroute this morning..
  • Reply 2 of 40
    jungmarkjungmark Posts: 6,716member
    Supplygate!
  • Reply 3 of 40
    Crack the whip Foxconn.
  • Reply 4 of 40
    The notion that 5M units would be considered "a miss" is absurd. Instead of feigning disappointment in a company (such as Apple in this instance), analysts should admit "we were wrong because our projections were pulled out of our butts"
  • Reply 5 of 40


    <joke>Who gives a ****. I got mine!</joke>

  • Reply 6 of 40
    ha! It took Apple nearly two years to sell one million iPods, but it took them one weekend to sell around 5 million iPhone 5's. So Apple/Foxconn can't keep up? I guess they need to bus in some more poor Chinese slave-workers to fill demand than dispose of them once they get caught up on the orders. There is always a dark side to when an empire is being built , and make no mistake Apple's huge success (maybe the first trillion dollar corporation) of making wonderfully designed products in China has a dark side that goes with it. For every beautiful Egyptian pyramid or Great Wall of China there is a long human history of the poor and enslaved being used to fulfill the dreams and desires of the rich and the privileged.

    While I don't think the people in charge within Apple planned on this, but often there are unintended consequences for things (even for success) and there is a good chance that Apple has created a beast that they can no longer control as well as they would like.
  • Reply 7 of 40


    Don't like making financial recommendations but a $10 drop for sellingmillion iphones in a weekend!!! - To me that would suggest a good time to invest in AAPL...:)

  • Reply 8 of 40


    These analysts are insane. They come up with some absurd numbers, each one adding to what the other said. "Oh they say 6M, I'll say 7M!" and then they get all disappointed when Apple SELLS MORE PHONES IN 3 DAYS THAN MOST COMPANIES HAVE SOLD ALL QUARTER (citing source... http://arstechnica.com/gadgets/2012/06/samsung-ships-43-million-smartphones-in-q1-dwarfs-htc-and-motorola/) So please analysts, take your head out of your butt... or maybe that's what your title really means?

  • Reply 9 of 40


    Windows phones logistics supply chain much better ! In line with demand !

  • Reply 10 of 40
    ^ /s? I think Windows Phone suppliers should have no problem producing 10 phones a day... and that's probably above demand.
  • Reply 11 of 40
    I was one of those expecting higher numbers. 6 million would have doubled supply from 4s. If Apple is only counting delivered devices and not supply sent to telecoms I would put this down to Apples wonderful habit of under reporting earnings to keep suspense up. Any one remember suscription accounting?

    I will admit I am less willing to run out and buy a new one. I just got the 4s last year, and money doesn't grow on trees.

    Is any one else tired of trying to find real news and ideas about Apple, and realising you have just started reading another fanboy battle?

    How much would UPS and FedEx have booked in earnings from this weekend? $15-17 per delivery? 30 million in one weekend wouldnt be out of the realm of possibility. If they keep up that pace in weekly deliveries over the next 3 months you would be talking about almost 400 million in sales for each company from one product introduction. Not peanuts!
  • Reply 12 of 40
    lkrupplkrupp Posts: 7,321member
    Even pundits like Jim Cramer on CNBC are poo-pooing this "disappointment" and wondering just where these "whisper numbers" of 10 million came from anyway.
  • Reply 13 of 40


    Ahhh, the usual Analyst Games. 


     


    Sometimes I think Apple is the only stock where a device can have record-smashing sales over a single weekend (5 MILLION units!) and yet, the stock will STILL lose 10 points just because the ANALYSTS said it would be more, and the sales "fell short".


     


    Name one other device that sold 5 MILLION units on its launch weekend, and tell me, in what way did that "fall short" of ANY expectations, other than perhaps the contrived inventions of these so-called Analysts?


     


    Only Apple. An easy stock to manipulate apparently. I'd like to see how much these so-called "analysts" have earned over the past few years on these VERY consistent (and highly predictable) analysis-results pairings...

  • Reply 14 of 40
    The joke about the stock price is that just days before the announcement, the analysts weren't counting on any iPhone5 sales in the quarter, and now suddenly 5M in the first weekend is a disappointment??? What a sad and pathetic group. Not to mention that by the end of the week, including the additional markets coming online, there will likely be 10M units iP5 sold for the quarter. These so called "experts" heads are spinning like Linda Blair in the Exorcist!!!
  • Reply 15 of 40
    @umrk_lab: "In line with demand !" No doubt...about 100 phones a week?
  • Reply 16 of 40

    Quote:

    Originally Posted by Commodification View Post



    ha! It took Apple nearly two years to sell one million iPods, but it took them one weekend to sell around 5 million iPhone 5's. So Apple/Foxconn can't keep up? I guess they need to bus in some more poor Chinese slave-workers to fill demand than dispose of them once they get caught up on the orders. There is always a dark side to when an empire is being built , and make no mistake Apple's huge success (maybe the first trillion dollar corporation) of making wonderfully designed products in China has a dark side that goes with it. For every beautiful Egyptian pyramid or Great Wall of China there is a long human history of the poor and enslaved being used to fulfill the dreams and desires of the rich and the privileged.

    While I don't think the people in charge within Apple planned on this, but often there are unintended consequences for things (even for success) and there is a good chance that Apple has created a beast that they can no longer control as well as they would like.




    you make it sound like Apple is the only company using China factories. The fact is, this "slave" labor is better than what the rural chinese have in terms of salary, benefits, etc.

  • Reply 17 of 40


    I know this sounds trollish but I'm seriously wondering if their supply issues have to do with the Foxconn workers on strike...

  • Reply 18 of 40


    Originally Posted by chronster View Post

    I know this sounds trollish but I'm seriously wondering if their supply issues have to do with the Foxconn workers on strike...


     


    I'd imagine that psychologically there's a small effect there, but are those even workers on the Apple lines?



    Ten of them are dead now. That's all Apple's fault, though.

  • Reply 19 of 40

    Quote:

    Originally Posted by spaceage View Post



    @umrk_lab: "In line with demand !" No doubt...about 100 phones a week?


     


    Elop has enough time to hand-build each one, and Ballmer has time to re-write WP8 for each one.


     


    back on topic,


    Are any of the iPhones made in Brazil?

  • Reply 20 of 40
    rogifanrogifan Posts: 10,669member
    Last week o n CNBC Jim Cramer (who is a big Apple fan) was begging the stock to drop a bit. I wouldn't be surprised if some of these "analysts" threw out unrealistic predictions because they wanted to short the stock. Or the stock drop might be due to worries over supply constraint (or Foxconn riots) than a concern there is soft demand.
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