Apple faces constrained iPhone SE supply on surprise demand

Posted:
in iPhone edited April 2016
Apple CEO Tim Cook during Tuesday's quarterly conference call said supply of its latest iPhone SE model is constrained due to surprisingly high demand from users who want the latest technology in a small package.




Cook said the device, launched in in March, is attracting not only new iPhone users and switchers, but also existing customers looking for standout iPhone features in a 4-inch form factor. Industry watchers largely dismissed the SE as a down-market money grab, but interest has outperformed even Apple's own expectations.

"We're thrilled with the response that we've seen on it," Cook said of iPhone SE. "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."

He added that Apple is working to produce to fulfill demand, but failed to offer a timeline on an expected equilibrium. Since iPhone SE debuted last month, full sales results were not reflected in today's earnings report.

Today's revelation runs counter to recent reports claiming Apple faced an uphill battle with iPhone SE sales. Earlier this month, however, circumstantial evidence pointed to overwhelming interest in the device, which saw stock-outs and shipping delays at a number of retail outlets, including Apple's own brick-and-mortar and online stores.
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Comments

  • Reply 1 of 30
    irelandireland Posts: 17,684member
    Best iPhone I've ever owned.

    I would like to see iPhone 7 offered in three sizes however. Not that I'd get one, but those who like 4" phones should be offered the latest flagship with 3D Touch and all the other features—even if the 4" needed to be thicker than the larger screened devices to provide same feature set.
    edited April 2016 baconstangwonkothesanejony0bobschlob
  • Reply 2 of 30
    mac_128mac_128 Posts: 3,452member
    "We're thrilled with the response that we've seen on it," Cook said of iPhone SE. "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."

    No Tim, the reason you have the supply constraints you have is because you insist on making 16GB the base configuration. The SE customers are smarter than that. There's plenty of 16GB SEs out there. The supply constraint is on the 64GB models.

    Every Apple Store in Los Angeles was out of every 64GB model for every carrier, but they had loads of 16GB models they couldn't give away.
    edited April 2016 cnocbuijalokpluckicoco31983lord amhran
  • Reply 3 of 30
    sflocalsflocal Posts: 4,747member
    mac_128 said:
    No Tim, the reason you have the supply constraints you have is because you insist on making 16GB the base configuration. The SE customers are smarter than that. There's plenty of 16GB SEs out there. The supply constraint is on the 64GB models.

    Every Apple Store in Los Angeles was out of every 64GB model for every carrier, but they had loads of 16GB models they couldn't give away.
    So what?  The phone's been out for a month.  Assuming Apple did truly underestimate demand on the 64GB model, they will ramp up that production so in a couple more weeks it will be a non-issue.  I'd rather not put out enough of everything, than to have too much of one thing and have a glut of them.
    macky the mackychiaicoco3
  • Reply 4 of 30
    mac_128mac_128 Posts: 3,452member
    sflocal said:
    mac_128 said:
    No Tim, the reason you have the supply constraints you have is because you insist on making 16GB the base configuration. The SE customers are smarter than that. There's plenty of 16GB SEs out there. The supply constraint is on the 64GB models.

    Every Apple Store in Los Angeles was out of every 64GB model for every carrier, but they had loads of 16GB models they couldn't give away.
    So what?  The phone's been out for a month.  Assuming Apple did truly underestimate demand on the 64GB model, they will ramp up that production so in a couple more weeks it will be a non-issue.  I'd rather not put out enough of everything, than to have too much of one thing and have a glut of them.
    So what? Apple is clueless about what the base storage should be on their phones. I'm not necessarily advocating for the eradication of the 16GB phone because it definitely has a place in the worldwide Apple ecosystem, especially in an entry level phone. But the fact that in the US, Apple miscalculated the demand for 64GB over 16GB so badly is very telling.
    edited April 2016 cnocbuibobschlob
  • Reply 5 of 30
    wizard69wizard69 Posts: 12,893member
    mac_128 said:
    "We're thrilled with the response that we've seen on it," Cook said of iPhone SE. "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."

    No Tim, the reason you have the supply constraints you have is because you insist on making 16GB the base configuration. The SE customers are smarter than that. There's plenty of 16GB SEs out there. The supply constraint is on the 64GB models.

    Every Apple Store in Los Angeles was out of every 64GB model for every carrier, but they had loads of 16GB models they couldn't give away.
    Apples ignorance here astounds me. First they missed completely that many of us have been waiting for a decent small phone for years now. That in itself is pretty damning of Apple management. Then they carry on the stuoidity of offering devices with way to little storage and far too costly storage upgrades. Frankly I think they are out of touch.
    cnocbuilord amhran
  • Reply 6 of 30
    mac_128 said:
    sflocal said:
    So what?  The phone's been out for a month.  Assuming Apple did truly underestimate demand on the 64GB model, they will ramp up that production so in a couple more weeks it will be a non-issue.  I'd rather not put out enough of everything, than to have too much of one thing and have a glut of them.
    So what? Apple is clueless about what the base RAM should be on their phones. I'm not necessarily advocating for the eradication of the 16GB phone because it definitely has a place in the worldwide Apple ecosystem, especially in an entry level phone. But the fact that in the US, Apple miscalculated the demand for 64GB over 16GB so badly is very telling.
    16GB is not considered the base RAM, it's the amount of storage. Big difference.
    mike1stevehicoco3
  • Reply 7 of 30
    NY1822NY1822 Posts: 616member
    16 GB will always have a place...My parents for instance, in their mid 60s...snap a few pics, make a few calls...check some email ...my nephew...early teens...same...
    baconstangjkichlinedrewys808fotoformat
  • Reply 8 of 30
    mac_128 said:

    No Tim, the reason you have the supply constraints you have is because you insist on making 16GB the base configuration. The SE customers are smarter than that. There's plenty of 16GB SEs out there. The supply constraint is on the 64GB models.

    Every Apple Store in Los Angeles was out of every 64GB model for every carrier, but they had loads of 16GB models they couldn't give away.
    Another data point: I was the very first SE purchaser at one of my carrier's brick-and-mortar stores.  They had NO space gray models, regardless of capacity.  They had a reasonable supply of everything else, including the larger-capacity models.

    When asked about that, they didn't have a direct "say" in what they got; it was just, whatever showed up, showed up.

    So there were constraints at launch time, but not necessarily driven by capacity.
    xamaxxiamenbillchiamike1
  • Reply 9 of 30
    mac_128mac_128 Posts: 3,452member
    mac_128 said:

    No Tim, the reason you have the supply constraints you have is because you insist on making 16GB the base configuration. The SE customers are smarter than that. There's plenty of 16GB SEs out there. The supply constraint is on the 64GB models.

    Every Apple Store in Los Angeles was out of every 64GB model for every carrier, but they had loads of 16GB models they couldn't give away.
    Another data point: I was the very first SE purchaser at one of my carrier's brick-and-mortar stores.  They had NO space gray models, regardless of capacity.  They had a reasonable supply of everything else, including the larger-capacity models.

    When asked about that, they didn't have a direct "say" in what they got; it was just, whatever showed up, showed up.

    So there were constraints at launch time, but not necessarily driven by capacity.
    Understood, but I'm talking about a very big data point, not just one store -- EVERY Apple Store in Los Angeles and Orange County, arguably the single largest Apple market in North America, was out of every configuration of the 64GB model for the last 3 weeks. But they had more 16GB than they knew what to do with.

    There are similar stories about NY, probably the second biggest market in North America.

    Those two data points are enough to establish a pattern. Add to that the online orders reflected a similar lack of 64GB availability, and well, there you have it.
    edited April 2016 xiamenbillasdasd
  • Reply 10 of 30
    profprof Posts: 76member
    I'm a whole lot more surprised that Apple underestimated the demand than all those idiot analysts who are so out of touch of what customers are actually willing to pay for; anyway, mark my words: 2016 is going to be the year of the screen size downsizing; pretty much all companies realised they took it too far and are dialling back (if they can, that is)... I don't really mind having only 16GB of storage on my iPhone but then again I've always used the largest available iPod for my playback needs and couldn't give a larger crap about shitty phone cameras...
  • Reply 11 of 30
    sflocalsflocal Posts: 4,747member
    mac_128 said:
    sflocal said:
    So what?  The phone's been out for a month.  Assuming Apple did truly underestimate demand on the 64GB model, they will ramp up that production so in a couple more weeks it will be a non-issue.  I'd rather not put out enough of everything, than to have too much of one thing and have a glut of them.
    So what? Apple is clueless about what the base storage should be on their phones. I'm not necessarily advocating for the eradication of the 16GB phone because it definitely has a place in the worldwide Apple ecosystem, especially in an entry level phone. But the fact that in the US, Apple miscalculated the demand for 64GB over 16GB so badly is very telling.
    You say "clueless", I'm more implying "caution".  I personally don't think Apple knew what demand (and which storage amount) would be needed.  I think it could have gone either way.  Suppose they did prioritize the 64GB model, and then a report comes out that the 16GB is constrained with weeks of backlog... what next?  Would folks like you then criticize Apple for not seeing the "first timers" and "cheap consumers" then?  

    I think Apple just can't win with the kind of consumer marketing you're pushing.  That, or you're just making way too big an issue of it.
    baconstangbestkeptsecretmike1
  • Reply 12 of 30
    apple ][apple ][ Posts: 8,739member
    Surprise for who?

    Not for me.

    I wrote that the SE was going to be a hit since day one, despite the idiotic lies and predictions coming out of the mouths of clueless analysts and pundits.
    jaloxiamenbillchiapscooter63badmonk
  • Reply 13 of 30
    macplusplusmacplusplus Posts: 1,919member
    mac_128 said:
    "We're thrilled with the response that we've seen on it," Cook said of iPhone SE. "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."

    No Tim, the reason you have the supply constraints you have is because you insist on making 16GB the base configuration. The SE customers are smarter than that. There's plenty of 16GB SEs out there. The supply constraint is on the 64GB models.

    Every Apple Store in Los Angeles was out of every 64GB model for every carrier, but they had loads of 16GB models they couldn't give away.
    I bought a 16 GB because I don't store anything on it. A few business apps, a bit downloaded music, mostly photos, but no games, no utilities, not anything fancy... I have an iPad for such things.

    16 GB is needed to make room in people's budget to buy an iPad. True mobility is the iPad. iPhone is just a phone, camera and tethering device. Keep the iPhone cheap to get an iPad, a Watch and a Mac. Apple finally got this...

    As I understand from your other post I must admit that Apple has made a marketing mistake by miscalculating the demand for 64 GB... Apple's apparent mistakes always resume to marketing mistakes, interesting...
    edited April 2016 radarthekatsteveh
  • Reply 14 of 30
    NY1822 said:
    16 GB will always have a place...My parents for instance, in their mid 60s...snap a few pics, make a few calls...check some email ...my nephew...early teens...same...
    I was in the same boat up until this shiny new SE. No music, all my pics going straight to Instagram, 16GB worked out fine for me. But now that we have over-the-air updates, and the bulk of these buyers likely to be, shall we say, of the less capably nerdy sort, the small capacity is really hurting these folks in ways they don't appreciate. It is time. (I was all set to buy a 128gb SE, incidentally, since this is likely to be my phone for the next two years. Bummer.)
  • Reply 15 of 30
    gatorguygatorguy Posts: 21,255member
    Perhaps there might be a surplus of 16GB's and constraints on the 64. Note that Best Buy is selling the SE 16GB for $1 at the moment (a special Sprint promo I think)
  • Reply 16 of 30
    apple ][apple ][ Posts: 8,739member
    gatorguy said:
    Perhaps there might be a surplus of 16GB's and constraints on the 64. Note that Best Buy is selling the SE 16GB for $1 at the moment (a special Sprint promo I think)
    I've been trying to get a 16gb for the past week from an Apple store. There are 6-7 close by me. None have it.
  • Reply 17 of 30
    gatorguygatorguy Posts: 21,255member
    apple ][ said:
    gatorguy said:
    Perhaps there might be a surplus of 16GB's and constraints on the 64. Note that Best Buy is selling the SE 16GB for $1 at the moment (a special Sprint promo I think)
    I've been trying to get a 16gb for the past week from an Apple store. There are 6-7 close by me. None have it.
    Try Best Buy then. Dunno if you'll actually have luck but worth a try. 
  • Reply 18 of 30
    jalojalo Posts: 3member
    sflocal said:
    mac_128 said:
    No Tim, the reason you have the supply constraints you have is because you insist on making 16GB the base configuration. The SE customers are smarter than that. There's plenty of 16GB SEs out there. The supply constraint is on the 64GB models.

    Every Apple Store in Los Angeles was out of every 64GB model for every carrier, but they had loads of 16GB models they couldn't give away.
    So what?  The phone's been out for a month.  Assuming Apple did truly underestimate demand on the 64GB model, they will ramp up that production so in a couple more weeks it will be a non-issue.  I'd rather not put out enough of everything, than to have too much of one thing and have a glut of them.
    They have too much of the 16BG phone! Actually every single 16GB device they make is too much of one thing! It's ridiculous, and its a dis-service to their customers and gives them a poor user experience. Customers who bought 16GB devices when the iPad Air came out with iOS 7 quickly realized they were very limited to what they can store on their devices. 

    The iPhone SE with the high resolution camera alone makes it practically unusable for the average person.  People use their phones to take pictures and videos of their children at their sporting events, school programs, birthday parties etc. With only 12GB free on a "16BG" phone you can only take 31 minutes of 4k video or 1hr of 1080p. That's three 20 minute clips at 1080p. With weekend soccer or basketball games I can blow through storage before the season is over. Most people have no clue why their phone is suddenly running poorly despite getting storage errors.  

    A good friend of mine kept asking me why she wasn't getting group text messages until hours or days later. After looking at her phone it was full. We deleted iMessages and downloaded all her pictures to her computer and the phone immediately started working better. It's this type of experience that makes the unknowing user want to buy something else.
  • Reply 19 of 30
    sflocalsflocal Posts: 4,747member
    jalo said:
    sflocal said:
    So what?  The phone's been out for a month.  Assuming Apple did truly underestimate demand on the 64GB model, they will ramp up that production so in a couple more weeks it will be a non-issue.  I'd rather not put out enough of everything, than to have too much of one thing and have a glut of them.
    They have too much of the 16BG phone! Actually every single 16GB device they make is too much of one thing! It's ridiculous, and its a dis-service to their customers and gives them a poor user experience. Customers who bought 16GB devices when the iPad Air came out with iOS 7 quickly realized they were very limited to what they can store on their devices. 

    The iPhone SE with the high resolution camera alone makes it practically unusable for the average person.  People use their phones to take pictures and videos of their children at their sporting events, school programs, birthday parties etc. With only 12GB free on a "16BG" phone you can only take 31 minutes of 4k video or 1hr of 1080p. That's three 20 minute clips at 1080p. With weekend soccer or basketball games I can blow through storage before the season is over. Most people have no clue why their phone is suddenly running poorly despite getting storage errors.  

    A good friend of mine kept asking me why she wasn't getting group text messages until hours or days later. After looking at her phone it was full. We deleted iMessages and downloaded all her pictures to her computer and the phone immediately started working better. It's this type of experience that makes the unknowing user want to buy something else.
    I know users of every iPhone size that have the same issues.  I have friends I've helped that are receiving space-size warning on 64GB and 128GB phones, and hardly a peep from anyone that uses a 16GB phone.  That to me says much in the realm that I hang around in.

    People are going to run out of space no matter what.  So many people are data hoarders, keeping every single iMessage with tons of iMessage photos in addition to their regular photos and videos.  It's just gluttonous to say the least.  I suspect in another couple years, we'll start having 256GB iPhones and when 4K becomes the norm, 1/2 terabyte and beyond will be the norm.  

    In the end.. so what!  I don't care, you shouldn't care... users that complain about running out of space will most likely complain when they go to a bigger phone anyways.  People don't realize that a phone kind of needs to be cleaned regularly like a house.  They don't do it, yet seemed surprise when I show them all the photos from their text messages that they haven't deleted since 2007.  Really... that's crazy.
     
    mike1
  • Reply 20 of 30
    apple ][apple ][ Posts: 8,739member
    gatorguy said:
    apple ][ said:
    I've been trying to get a 16gb for the past week from an Apple store. There are 6-7 close by me. None have it.
    Try Best Buy then. Dunno if you'll actually have luck but worth a try. 
    I'm actually going to be trading in an iPhone 5S, so that needs to be done at an Apple store.
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