“A key supplier to Apple Inc. said Wednesday it is shipping ‘far fewer’ new iPhones than the Cupertino, Calif. company has requested, because some quality standards still can’t be met due to design-related production difficulties,” Aries Poon reports for The Wall Street Journal.
“Supply-chain problems have led to a long wait for the iPhone 5 since the device’s late-September launch, analysts said,” Poon reports. “The scarcity of the phones has been weighing on Apple’s share price as well, as investors are concerned Apple may not be able to meet consumer demand in the near future, weighing on its earnings.”
“‘Market demand is very strong, but we just can’t really fulfill Apple’s requests,’ Taipei-based Hon Hai Precision Industry Co. Chairman Terry Gou told reporters on the sidelines of a local economic forum,” Poon reports. “Some labor-rights groups have said stricter quality control on the iPhone 5 has put more pressure on production-line workers in China. Mr. Gou also said Wednesday he was in China a few days ago to give moral support to workers there.”
Read more in the full article here.
MacDailyNews Take: Tim Cook, “operations genius” (who oddly never has enough supply to meet demand and routinely leaves untold sales on the table with each new product launch).
Just stating the facts.
We love you, Tim, but either you’re letting Jony run wild designing things that cannot be mass produced easily enough or you’re dropping the ball in some other way(s). What’s the deal?
Just once we’d like to see a properly executed iPhone and/or iPad production ramp with adequate supply at launch.
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
Waaaaaaaaaaaaaaaaaahhhhhh! 😭
Gimme a break MDN! Apple can stamp out cheap plastic phones at a rate higher than anyone but that is not what Apple does. They make high quality devices people love. The demand for iPhone 5 is unprecedented. This design and manufacturing process will improve with time.
+1
+1000.
After all the times MDN slagged non-Apple products for being cheap crap, now they’re somehow surprised that quality and bleeding edge industrial design parts costs more in both money, time and effort?
Try, just try, to live in the real business world.
Apple is definitely losing sales due to to having unavailable products. You can’t even order the new 27″ iMac yet even though it was announced many days ago! Ever heard of the “Osborne Effect”? If not, look it up!
Of all the hardware products Apple has announced since the first of September 2012, less than 25% are in stock — i.e., in stock at the Apple store so that 10 minutes before closing someone can walk in and buy one or in stock at the online Apple store so that any time of day you can buy one and it ships the next business day at the very latest.
Apple (and largely Tim Cook) has blown this very, very badly. Anyone who says otherwise has their head in the sand (or elsewhere).
It’s beginning to look like Cook might be another Scully — or maybe even a Spindler.
cook said on conf call production was up but could not meet demand. Anyone can check apple website. No news here, just a rehash to crash the stock on a vulnerable day. Gou said demand is very strong.
Lets hope that the UI can be manufactured in sufficient numbers in future if JI is to blame. Imagine not having enough icons on your screen to play with.
Agree.
Apple selected a design for iPhone 5 that Samsung and the other copy-cat phone makers can’t duplicate because of high engineering costs and other startup costs they can’t cover when selling relatively low-volume devices (compared to the high-volume iPhone). In effect, the iPhone 5’s design is a self-enforcing patent.
And just how does this help APPL stock?
Your kidding right… The headline was obviously sarcastic in nature….
Sarchasm, defined.
What’s the world coming to when you can’t rely on the totalitarian communist regime next door to force its laborers to speed up those mind-numbing assembly lines? They sure don’t make commies like they used to. Maybe Apple needs iPhone 5 factories with more robotics?
Some parts are completely automated, but for a lot of the production chain the problem with robotics is it takes longer to set up and debug than the current yearly product refresh cycles and 2 year full redesign allows.
Human labour is still a lot more flexible.
This article means nothing if no numbers are given.
I can say Hon Hai made over 10 MILLION IPHONE 5 a month BUT still cant meet the demand.
BINGO!
Apple is distancing from Samsung rightly so but this has its hindrances. MDN says Tim should of dropped Samsung immediately but now complaining when all the other producers can’t keep up. Can’t have it both ways.
Bit surprised by the take from MDN suggesting that Apple go for easy to stamp out mass produced products?
Yes the demand is unprecedented and current factories can’t keep up with it – mobile tech is moving unlike anything seen to date, I don’t think anyone can build factories fast enough – but cheapening out on its designs isn’t the solution.
This is precisely what Wall Street prefers. Wall Street favors companies that stamp out cheap products using a cookie cutter because that’s the only way a company can get major market share. Apple is falling behind miserably and Apple’s rapidly falling share price only proves that point. Every product Apple introduces comes with a built-in supply chain bottleneck. Each time Apple fails to meet Wall Street’s unit sales expectations, the company is docked another $10 to $20 of share price.
Apple absolutely has to keep the supply chain filled or the company will continue to be downgraded on Wall Street. Apple will need to build factories with the highest amount of robotic automation possible. Apple has $120 billion to start building those factories. Instead, Tim Cook is sitting in some big, comfy chair twiddling his thumbs while Apple shareholders get slaughtered. Apple should never introduce a single product with less than 10 million units in inventory. If they have to push the product back months, then that’s what they need to do. Don’t give Wall Street and the news media an obvious opportunity to tear them apart about low sales expectations.
what ever happened to being a supply genius………TCook????
“Just once we’d like to see a properly executed iPhone and/or iPad production ramp with adequate supply at launch.”
I’d like to see MDN go one day without supposedly posting a link to the source article which in fact turns out to be a link to the page you’re already reading.
The demand is greater than ever for this iPhone release. It takes time to ramp up production and iron out the kinks. With this type of product it is impossible to make enough units to cope with initial demand. Manufacturing will always be behind in that scenario.
Apple stated that there were 9M iPhones in the channel but that level was too low. How many of those are 5s was not provided.
Confusing headline. Sarcasm – a sharp and often satirical or ironic utterance designed to cut or give pain.
What the guy from Hon Hai said was that they could not meet the HUGE demand for the iPhone 5. That does not mean that Apple is not selling a fuckload of iPhone 5s. It means demand is blowing supply forecast off the map. There is still a line stretching around the apple store, out the door and around the corner waiting for the iPhone 5.
Buying two iPhone 5s in New York City and selling them in China or Asia can fund an entire vacation. If each single phone is worth so much perceived value, WTF with the stock that is supposed to be predicting future value, not reacting to a production ramp.
Appears to be clever misinformation. Kuo merely said that Hon Hai couldn’t meet the enormous demand. Poon is cobbling the rest together out of thin air, IMO.
Just what I have been saying about the chronic supply problems, the ugly truth finally comes out in dribs and drabs. My email to Cook, the supply chain laggard, asking him to fess up to the problems has gone unanswered.
Once again, retail investors are the last to know and bag holders as a result. I dumped my AAPL holding when Cook gave dubious (borderline fraudulent) answer to supply shortage questions during the earnings call. Btw, I believe they have the same problems with the iPad mini.
The phrase “far fewer” is thrown out but not identified, except as an anonymous “key supplier” and only linked by innuendo to Hon Hai and Terry Gou. If he said it, they would have given him direct attribution. In short, a hit piece, pure and simple
There is not much substance to AAPL stock decline. Just psycho sentiment vapor ware. I mean, it’s not like Apple is declining like Blackberry or Hewlett-Packard. Even in hurricane-ravaged NYC, the iPad mini sold out in two hours. I’d rather be sold out with astronomical numbers and have a supply problem, than be selling at a discount because stuff not selling. Duh! Hello? Wall Street? Hello?
I am confused by the title. How is this “great news”?
MDN shouldn’t be this lazy swallowing hook, line and sinker Poon story in the Rupert Murdoch owned WSJ. Poon did a bit of ad lobbing to what Gou actually said. How would MDN like having statements it never made reported as fact?