What I don't understand is why they don't switch iMac production over to their own plants just to meet demand. Are their plants not capable of building them? I'm sure cost also comes into play but its better than only making 10,000 a month
<strong>In the MWSF keynote Steve said outright they did not believe they would be able to keep up with demand for the first quarter as they ramped up production.
What part of that did the analysts miss???
</strong><hr></blockquote>
I think the key there is they are expecting large short fall not just the smaller one Apple anticipated.
Profit margins are much lower on iMacs, in fact it was announced by Anderson that because of these low margins and the cost of air freight AAPL profit margin would shrink from last quarters 30%+.
Not having those low margins and expenses equals a positive result on the bottom line.
What really bothers me though is that the source of the low production numbers is none other than Merill Lynch, the largest retail broker in the country and they carry a lot of weight. We were led to believe that AAPL was geared up to produce 100,000 iMacs per month and in a different trend a prediction of 1.3 million iMacs to be produced THIS YEAR. To reach that number in 10 months they would have to average 130,000 per month....that's not going to happen and this is a serious problem. if increasing market share is to be realized <img src="graemlins/surprised.gif" border="0" alt="[Surprised]" />
We will know soon because AAPL will have to disclose, as earnings season is upon us. <img src="graemlins/embarrassed.gif" border="0" alt="[Embarrassed]" />
I'm hoping that all will smooth out but I along with most of the people here on AI were shocked by the ML announcement and that why the stock got tanked yesterday. <img src="graemlins/hmmm.gif" border="0" alt="[Hmmm]" />
Mr. Fortuna, the anyalyst, seems not to remember the meeting he and others had with Apple after the Keynote. Apple execs. specifically stated that they would not be able to keep up with expected demand in the first quarter. This is not a surprise nor is it a sign of "trouble" as he stated in his comments. (Remember, Merrill Lynch was heavily involved with Enron as a backer and their analysts - not specifically Fortuna - encouraged buys on the stock). Putting out warnings as he did is simply wrong and stupid. Without getting any specific comments from Apple, he is making statements based on rumors and not facts.
By the way, the iMac is outsourced to Quanta. Reports from Asian newspapers said that Apple had contracted for Quanta to produce 100,000 iMacs a month. Apple never stated any such thing themselves. Im sure Apple would have liked to have a better output for February but Quanta just hasn't got to full speed yet. Ramping up takes time, especially on such a new design as the iMac.
Not meeting demands can be a good thing. Making 5k units a month is NOT.
Whatever Apple said about not being able to produce enough isn´t the same as this. "Oh Apple couldn´t make any iMacs in March? Well that doesn´t matter because they told that they wouldn´t be able to meet demands. I say buy Apple stocks".
Why don´t Apple just release the G5 and say "but we don´t expect to be able to meet the demands the first 6 month". Would you expect AAPL not to be hurt by that?
The reality is (if the figures are right) that Apple is selling less iMacs now than they did two month ago and haven´t proved yet that they are indeed able to produce them in quantatives.
But that said I don´t think the figures are quite right. Some here on AI have recieved theirs, some know shops where they just sits there and we have received a couple of them here in Denmark despite we usually don´t get new models until the US marked is filled. That doesn´t sound like 10000 units to me.
<strong>Err...you should probably steer clear of the stock market with thoughts like that.</strong><hr></blockquote>
I didn't refer to low production, only low inventory. Production will ramp up, so that's no big deal. A bigger issue would be if there were no buyers for these machines. Low inventory is GOOD. As long as they have sold everything they have, and they know when others are coming in, they'll be fine.
My portfolio is performing well. I don't look at it every day--only once ever 6 months or so. For the record, I'd never invest in Apple stock. But not because of inventory. People who manage their portfolios daily are idiots.
Well, I am an AAPL stockholder, so I am very concerned about this rumour. I hope it's not true, because 15 thousand machines in two months is pathetic. Shouldn't Apple comment on this soon, since public companys must keep their investors in the loop?
I listened to the analyst meeting where all in attendance were told that the new iMac would not ship in large enough quantities to meet expected initial orders in the first quarter. Mr. Fortuna was there along with other analysts. Now, 2 months later when Apples prediction and statement comes true, Mr. Fortuna says the company is in trouble. He decided that Apple was wrong and they would ship 200,000 units within 2 months or so. He was told they wouldn't, but he goes ahead and then puts out a warning, causes the stock to fall and once again proves that some analysts are idiots.
After more thought, the Merrill Lynch analyst's figures must be wrong. There were 150,000 iMac preorders. If Apple had only produced 15,000 iMacs, 90% of those customers would still be waiting. Many customers are waiting, but not 90%. Heck, someone in another thread just reported getting their iMac after ordering it 11 days ago. I'm not worried about this rumour anymore.
I just can't believe how many people are taking these numbers as concrete hard facts, as well as the problem itself. Radiation? Oh please.
Until Apple or Quanta comments, I'm not that worried about what some analyst has to say. Production is just beginning to ramp up on a COMPLETELY NEW computer design, so I can understand if there are a few minor hiccups. Plus the demand for these things is just unbelieveable. This is just beyond the original iMac in terms of magnitiude.
Analysts just make me mad sometimes, they think they know it all and know what's going to happen... well, then if they know so much, why are they still working as analysts when they could have bought all the right stocks and have millions in the bank and chillin' in their mansion in the Bahamas?
Credit Suisse has also downrated the amount of iMacs expected to ship this quarter. They say a maximum of 150,000 rather than the 200-250,000 they predicted. Numbers, numbers who's got the numbers! This means lower then predicted earnings. (They inflated the projected earnings for the quarter). Once again they failed to listen to Apple when they were told that shipments would not be that large. Oy.
By now, we should understand that there is absolutely no way in hell that anyone can anticipate all the snags that come in a first mass production run. </strong><hr></blockquote>
which is EXACTLY why they shouldn't announce products before it has been Ramped and tested.....
which is EXACTLY why they shouldn't announce products before it has been Ramped and tested.....</strong><hr></blockquote>
So, you want Apple to be perfect like "good" companies like say ... Microsoft... companies that announce stuff YEARS before it is even in work?
NO company is able to perfectly balance the issue of when to announce and how many to produce!
You try to run a company that invents a new product and just TRY to figure out how many to build BEFORE you announce it... not to mention FUNDING the darn thing....
come on.. get in the real world!
I'm tired of people bashing APPLE or anyone else for not being able to accurately guess demand!
Go blast these guys while you are at it (announced 1/2 year in advance)!!!!
"Hitachi has developed a prototype notebook PC that uses a water-based solution to cool down its Pentium 4 processor and is planning to commercialize the product for corporate users in the third quarter of this year, the company said Tuesday."
<strong>Go blast these guys while you are at it (announced 1/2 year in advance)!!!!
</strong><hr></blockquote>
The difference is Apple is selling products before they're ready to produce them, not simply announcing them. Once you start selling, you need to meet demand (within reason). Apple is terrible at this.
They're extremely good at not announcing stuff too early, though. You might even say they're too good at that!
I love Apple's products, but I sure wish they would conquer this problem once and for all. It's like they never learn. Or, maybe, there's some positive to doing it this way which outweighs the negatives. <img src="graemlins/hmmm.gif" border="0" alt="[Hmmm]" />
CSFB also made up complete bullsh!t numbers for XBox vs GameCube sales last winter because they have no numbers of their own. They claimed they had taken NPD numbers and extracted an estimate from there.
There is basiclly ZERO likelihood that Apple has only been able to ship 15,000 iMacs. And radiation problems? Please. They should have at least gone with something more believable like "firmware issues" or "aesthetic defects."
10-15,000 units being built is a bit of an absurd estimate. I imagine that far more than 15,000 units were ordered on the date of announcement (after all, they had 150,000 orders in three weeks). Three weeks puts us at about the end of January. Assuming a fairly consistent run rate, with the estimated 1.3 million to be shipped this year that puts us at a run rate of 25,000 per week.
So Apple's received orders for about 250,000 machines since announcement.
So next we look at shipments. The latest ordered iMacs I'm seeing on these boards that have arrived seem to be right around the end of January. (correct me if I'm wrong - anybody out there order in February and receive them yet?).
In order for end of month orders to be received, a majority of earlier in the month orders would have likely been shipped (this is an assumption). This is doubly likely though, as we're seeing inventory show up in Mac Stores around the world.
So I would estimate based on the above that a minimum of 75,000 units have shipped so far, with a preference leaning towards 125-150,000 units.
To add to this evidence somebody's posted that they are being told that their combo drive order will ship in 7 days (ie, we're only about 1 week late on those units).
To me, based on the above, I would say that Apple is pretty much on target with shipments of 100,000 units per month, and just a bit backlogged because of the intense supply.
Somebody should put up an independent tracking website.
The addded benefit of all this is, that Apple has produced what is currently a scarce resource, so that is helping to drive the hype "OMG - they've got one in stock I've got to order it now!!!" which is helping the units move faster...
And one day after the pessimistic analysis, Apple stocks went back up 8%. Maybe somebody else also sat down and figured out that the estimate of already shipped iMacs was absurd, AND saw that the analyst offered no corroboration.
Comments
Outpost, Macmall, Apple Stores, CompUSA - do any of these have them in stock right now? My guess is that some do.
???
Dr. L
<strong>In the MWSF keynote Steve said outright they did not believe they would be able to keep up with demand for the first quarter as they ramped up production.
What part of that did the analysts miss???
</strong><hr></blockquote>
I think the key there is they are expecting large short fall not just the smaller one Apple anticipated.
WTF are you talking about? Unless they are losing money on selling iMacs, there's no way that selling fewer iMacs is gonna result in higher earnings.
Profit margins are much lower on iMacs, in fact it was announced by Anderson that because of these low margins and the cost of air freight AAPL profit margin would shrink from last quarters 30%+.
Not having those low margins and expenses equals a positive result on the bottom line.
What really bothers me though is that the source of the low production numbers is none other than Merill Lynch, the largest retail broker in the country and they carry a lot of weight. We were led to believe that AAPL was geared up to produce 100,000 iMacs per month and in a different trend a prediction of 1.3 million iMacs to be produced THIS YEAR. To reach that number in 10 months they would have to average 130,000 per month....that's not going to happen and this is a serious problem. if increasing market share is to be realized <img src="graemlins/surprised.gif" border="0" alt="[Surprised]" />
We will know soon because AAPL will have to disclose, as earnings season is upon us. <img src="graemlins/embarrassed.gif" border="0" alt="[Embarrassed]" />
I'm hoping that all will smooth out but I along with most of the people here on AI were shocked by the ML announcement and that why the stock got tanked yesterday. <img src="graemlins/hmmm.gif" border="0" alt="[Hmmm]" />
[ 02-28-2002: Message edited by: sarasotabob ]</p>
By the way, the iMac is outsourced to Quanta. Reports from Asian newspapers said that Apple had contracted for Quanta to produce 100,000 iMacs a month. Apple never stated any such thing themselves. Im sure Apple would have liked to have a better output for February but Quanta just hasn't got to full speed yet. Ramping up takes time, especially on such a new design as the iMac.
[ 02-28-2002: Message edited by: MacsRGood4U ]</p>
Whatever Apple said about not being able to produce enough isn´t the same as this. "Oh Apple couldn´t make any iMacs in March? Well that doesn´t matter because they told that they wouldn´t be able to meet demands. I say buy Apple stocks".
Why don´t Apple just release the G5 and say "but we don´t expect to be able to meet the demands the first 6 month". Would you expect AAPL not to be hurt by that?
The reality is (if the figures are right) that Apple is selling less iMacs now than they did two month ago and haven´t proved yet that they are indeed able to produce them in quantatives.
But that said I don´t think the figures are quite right. Some here on AI have recieved theirs, some know shops where they just sits there and we have received a couple of them here in Denmark despite we usually don´t get new models until the US marked is filled. That doesn´t sound like 10000 units to me.
<strong>Err...you should probably steer clear of the stock market with thoughts like that.</strong><hr></blockquote>
I didn't refer to low production, only low inventory. Production will ramp up, so that's no big deal. A bigger issue would be if there were no buyers for these machines. Low inventory is GOOD. As long as they have sold everything they have, and they know when others are coming in, they'll be fine.
My portfolio is performing well. I don't look at it every day--only once ever 6 months or so. For the record, I'd never invest in Apple stock. But not because of inventory. People who manage their portfolios daily are idiots.
[ 02-28-2002: Message edited by: Brian J. ]</p>
Until Apple or Quanta comments, I'm not that worried about what some analyst has to say. Production is just beginning to ramp up on a COMPLETELY NEW computer design, so I can understand if there are a few minor hiccups. Plus the demand for these things is just unbelieveable. This is just beyond the original iMac in terms of magnitiude.
Analysts just make me mad sometimes, they think they know it all and know what's going to happen... well, then if they know so much, why are they still working as analysts when they could have bought all the right stocks and have millions in the bank and chillin' in their mansion in the Bahamas?
<strong>
By now, we should understand that there is absolutely no way in hell that anyone can anticipate all the snags that come in a first mass production run. </strong><hr></blockquote>
which is EXACTLY why they shouldn't announce products before it has been Ramped and tested.....
<strong>
which is EXACTLY why they shouldn't announce products before it has been Ramped and tested.....</strong><hr></blockquote>
So, you want Apple to be perfect like "good" companies like say ... Microsoft... companies that announce stuff YEARS before it is even in work?
NO company is able to perfectly balance the issue of when to announce and how many to produce!
You try to run a company that invents a new product and just TRY to figure out how many to build BEFORE you announce it... not to mention FUNDING the darn thing....
come on.. get in the real world!
I'm tired of people bashing APPLE or anyone else for not being able to accurately guess demand!
Go blast these guys while you are at it (announced 1/2 year in advance)!!!!
"Hitachi has developed a prototype notebook PC that uses a water-based solution to cool down its Pentium 4 processor and is planning to commercialize the product for corporate users in the third quarter of this year, the company said Tuesday."
<a href="http://www.pcworld.com/news/article/0,aid,86363,00.asp"; target="_blank">http://www.pcworld.com/news/article/0,aid,86363,00.asp</a>;
That's my Humble O
Ariel
[ 02-28-2002: Message edited by: Ariel ]</p>
<strong>Go blast these guys while you are at it (announced 1/2 year in advance)!!!!
</strong><hr></blockquote>
The difference is Apple is selling products before they're ready to produce them, not simply announcing them. Once you start selling, you need to meet demand (within reason). Apple is terrible at this.
They're extremely good at not announcing stuff too early, though. You might even say they're too good at that!
I love Apple's products, but I sure wish they would conquer this problem once and for all. It's like they never learn. Or, maybe, there's some positive to doing it this way which outweighs the negatives. <img src="graemlins/hmmm.gif" border="0" alt="[Hmmm]" />
There is basiclly ZERO likelihood that Apple has only been able to ship 15,000 iMacs. And radiation problems? Please. They should have at least gone with something more believable like "firmware issues" or "aesthetic defects."
So Apple's received orders for about 250,000 machines since announcement.
So next we look at shipments. The latest ordered iMacs I'm seeing on these boards that have arrived seem to be right around the end of January. (correct me if I'm wrong - anybody out there order in February and receive them yet?).
In order for end of month orders to be received, a majority of earlier in the month orders would have likely been shipped (this is an assumption). This is doubly likely though, as we're seeing inventory show up in Mac Stores around the world.
So I would estimate based on the above that a minimum of 75,000 units have shipped so far, with a preference leaning towards 125-150,000 units.
To add to this evidence somebody's posted that they are being told that their combo drive order will ship in 7 days (ie, we're only about 1 week late on those units).
To me, based on the above, I would say that Apple is pretty much on target with shipments of 100,000 units per month, and just a bit backlogged because of the intense supply.
Somebody should put up an independent tracking website.
The addded benefit of all this is, that Apple has produced what is currently a scarce resource, so that is helping to drive the hype "OMG - they've got one in stock I've got to order it now!!!" which is helping the units move faster...
:-)