Apple slips on new iPhone 5 supply worries

“Apple Inc. launched the iPhone 5 to great fanfare last month, but supply of the latest smartphone was tight in that final week of the quarter, and a growing number of analysts believe it may remain that way in the current period,” Dan Gallagher reports for MarketWatch.

“Apple shares have slipped about 8% since the Sept. 21 launch of the iPhone 5, and were down about 1% to $637.83 on Thursday morning,” Gallagher reports. “The recent slip came after U.S. wireless carrier Verizon VZ +3.57% reported third-quarter results, saying that it activated about 3.1 million iPhone units during the quarter, which included about 651,000 units of the iPhone 5. ‘We had supply constraints,’ Verizon Chief Financial Officer Fran Shammo said on a conference call Thursday morning.”

Gallagher reports, “But while many had projected that delayed iPhone 5 sales would be pushed into the December period, continued reports of tight supply has raised worries that the constraints may last into early 2013. ‘We reiterate that if supply does not improve by the end of this month, there is supply risk to our 49 million iPhone estimate for December,’ wrote Gene Munster of Piper Jaffray in a note following the Verizon report, adding that ‘any reductions to December estimates would largely be reallocated to March.'”

Read more in the full article here.

MacDailyNews Take: Imagine if iPhones were assembled by robots in the United States.

Well, maybe someday.

Related articles:
Analyst: Verizon iPhone activations portend better-than-expected quarter for Apple – October 18, 2012
Verizon sold 3.1 million iPhones in Q312, including 650K iPhone 5 units – October 18, 2012
Verizon Q3 profit up 15% to $1.6 billion; growth likely driven by Apple’s iPhone 5 debut – October 18, 2012

31 Comments

  1. There are not supply worries, there are worries about what Apple will do with all that money. Laughing my ass off …. worries about too many customers ripping too many iphones off the shelves. That is a real worry, you assdumb traders.

  2. Apple bridge is falling down ! falling down !! Falling down !!!!!!

    PANIC SALES REQUIRED !!! sell all of your AAPL today !!

    Apple will report a very very worse result next week . Why do I know ?? Coz all of us FEAR !!

  3. “MacDailyNews Take: Imagine if iPhones were assembled by robots in the United States.”

    You should read more. Terry Gou, chairman of Hon Hai Precision, stated that Foxconn will be shifting to robotic assembly to overcome labor shortages. That was during an earnings conference call about two years ago.

    This is another reason, beyond a screwed up taxation philosophy, that manufacturers are fleeing the US. Where are you going to find a million QUALIFIED workers in the US (5% of the US labor force is considered unemployable), let alone in one place?

    1. Part of the problem Steve Jobs identified was not just that all the cheap workers are overseas, but all the component manufacturers were, too.

      Meaning, it makes as little sense to ship the unassembled components to the US for final assembly by robots, as it does if they were assembled in the US by American hands.

        1. Fine, 95% percent of iDevice components are manufactured offshore. It’s not nothing, but it’s also not anything that would have it make sense to move assembly to the US.

          Which processors? Some of the major chips are done by Samsung foundries in Texas, but you know how motivated Apple is to get away to Samsung, and TSMC foundries are almost all in Asia.

  4. Even if assembled by robots, it would be easier and cheaper to do it in Asia.

    Because even robotic plants have to have supervising and fixing engineers, which are much cheaper there.

    Also, all the components except for, partially, SoC A6 and few others are made in Asia, so it is logistically more convenient to assemble there.

    1. DeRS, you are on the right track. Jobs said it himself, the US does not graduate enough engineers to supply Apple, let alone all the manufacturers leaving the US. It’s time heads are pulled out of the sand. Domestic technology firms, to meet their skilled worker needs, are importing that labor from countries that don’t specialize in liberal arts degrees.

      Before you even go there, to get a 1-HB work visa for a foreign worker, the US employer has to demonstrate that the skills required aren’t available in the US. The guidelines of proof are exacting, and the process can take up to 18 months.

      It is easier to move whole factories, than it is to get qualified labor in the US. Every year the US runs short on skilled, technical labor by more than 300,000 jobs (annual visa quota limitation).

    2. Also China has just opened 3 new universities to turn out engineers, they probably have a fair old percentage f the Worlds engineers and increasing. Meanwhile in the West some people seem to equate Engineers to train drivers. And they wonder why western kids thing science and engineering isn’t sexy.

  5. It’s always good when you can sell all that you can make. But it’s always bad when you can’t make enough of what people want. And since we are talking Wall Street and production it’s not good. It seems that Apple is having a particularly difficult time with this rendition of the iPhone. Certainly don’t want them to make a phone that is no better than anyone else’s. But they certainly need to do something about the manufacturing process and number of assemblers available. It takes time and I’m sure Tim Cook has been all over it for quite a while but it is a problem now. And it seems to be no short-term solution. I wonder how the supply will be for the iPad mini? I sure hope it’s better. It’s a fantastic problem to have when you make such great innovative products that you can’t produce enough for your customers. But Wall Street doesn’t always see it that way. It’s business. And that’s all Wall Street cares about. As they should. The next couple of months will be very interesting if you are an AAPL investor. What looked like to be a tremendous first quarter could be a little tricky now. But we won’t know that for sure until first quarter earnings report comes out in January. Right now it’s the fourth quarter earnings that gets reported next Thursday that’s up to bat next. I’m not looking for a homerun but a strong single to rightfield would be nice. Better up!

    1. Issues only exist because Apple Inc. decided to kick Samsung to the curb on the display side. As well, Apple Inc. is simply caught up in trying to stem competition by using the Courts. Move one, compete, innovate just like the automobile business does. Apple Inc. is staring to create more and more iHaters and even within its Cult!

  6. This all because WSJ had an unnamed official tell them that the phone 5 is difficult to make. Baloney..

    MDN if you believe this crap you have no standing to be critical of anyone much less Cook and apple management. Shyster is as shyster does.

    1. The shysters I mean are the guys in WS.

      First, maps.
      Then, scratches (by the way I have the 5 and I put it in my pocket with my keys. Nary a scratch.
      Then, production problems. Production problems cannot keep up with demand, not production being limited as in producing less than the iPhone 4(s).

      Baloney, just to cash in on the options and naked shorts.

  7. Can you say “stock manipulation”?

    I went to my local AT&T store last week in NJ for a 64 gb iPhone5. It was not in stock, but they had it shipped to me in 3 days. Is that really a serious supply constraint if you can get it in 3 freaking days?

    I also agree with Federico above. After a week in my pocket with keys, no scratches. The AT&T salesperson was playing up the “scratches easily” angle real hard in order to attempt to sell me a basic plastic case for $38.

  8. MDN Take: “Imagine if iPhones were assembled by robots in the United States. Well, maybe someday.”

    You mean like the prior U.S. plants that robotically assembled Macs (Freemont plant?) and it was still much less expensive to move the production overseas?

    Until you get the other production related costs down (facilities costs, energy costs, maintenance costs, etc.) even robotics work will be more expensive in the U.S.

  9. When the iPhone 5 was announced – one of my daughters was ready to buy – she has an old phone and had saved her money to get one (and she pays the phone/data plan). I tried for 2 weeks to get her a phone – all out in the apple stores in my area (denver area).

    I ordered the phone on October 4 – it is still ‘processing’ – and shows a ship date with delivery between November 5-9…..

    1. It is all spin just like Obama! Give me 4 more years he says and I will make it better. Apple simply holds back production and creates a backlog and then sells it as Oh My iPhones are selling at an unprecedented pace. Let’s what get uncovered in the next 6 months as Apple Inc. is about to get rocked hard!

  10. I was shouted down for pointing out that Apple’s outsourced production strategy involved far too much risk. I recommended that production be diversified, with more attention placed on effectiveness and store inventory responsiveness than merely trusting Chinese sub-manufacturers. Does the short-term profit maximizer crowd want to change their tune now?

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