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Monday, August 04, 2008, 10:00 am
Apple already building iPhones at rate of 40 million a year?
Apple is reportedly testing the limits of its overseas manufacturing facilities in order to keep up with demand for the new iPhone 3G, with production already cranked nearly sevenfold compared to the first-generation model.Foxconn, the company's Taiwanese handset and iPod manufacturer, has recently ramped production of the new iPhone to 800,000 units per week, says TechCrunch, citing a person "close to Apple with direct knowledge of the numbers."
The build rate is said to be "above current full capacity" for the Foxconn facilities alloted to Apple's handset business, which has led to concerns that quality control may suffer. At the current rate, Apple stands to produce more than 40 million iPhone 3Gs over the course of twelve months.
That paces well ahead of analysts' estimates (1, 2, 3) and early reports that suggested Apple's initial iPhone 3G orders spanned only 25 million units through the expected lifespan of the product.
TechCrunch believes Apple's initial order was actually 40 million units over the course of the first twelve months, but is now hearing that "those numbers are being revised upwards sharply."
Apple said it sold 1 million iPhones in the first 72 hours the new iPhone 3G was put on sale, but has not provided an updated sales tally since. The iPhone is currently on sale in 23 countries, with 20 more expected to be added on August 22nd, and another 30 by the end of the calendar year.
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Previous Comments View All
The build rate is said to be "above current full capacity" for the Foxconn facilities alloted to Apple's handset business, which has led to concerns that quality control may suffer. At the current rate, Apple stands to produce more than 40 million iPhone 3Gs over the course of twelve months.
Was it not a couple of years back when there were "sweatshop" allegations of Foxconn and the manufacturing of iPods? The heck with 'QC' if the manufacturer is said to be "above current fill capacity", what about the employees?! Will this be "Sweatshop, the Sequel". If Apple meant what it said, when it said, "Apple is committed to ensuring that working conditions in our supply chain are safe, workers are treated with respect and dignity, and manufacturing processes are environmentally responsible, then maybe Apple should pay a surprise inspection every now and then for the welfare of the supply chain's employees...
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Where did Apple go wrong with their forecasting? Or maybe they've just discounted the mainstream for so long that when they join it (subsidised phones, latest technology) it puts all their models out of whack.
And it's definitely bad. Apple should be taking advantage of the positive environment for their phone to build momentum, which they need against the companies that compete with them. People who might have switched from some other product but couldn't buy may be lost forever.
It would be great if Apple sold 100 million phones next year, but they may have done themselves in with their strange pessimism.
Apple is very conservative with their forecasting. They cited several real issues that could affect their results, like the US economy. During a Presidential election quarter, where the press is going to be hammering the economy to make the situation more favorable to the democrat, this is advisable.
If Apple had crossed the 5 million sold line with the iPhone3G, I'm sure we'd have heard about it by now. They were very quick to tout the 1 million sold the first weekend, I'm sure they'd want to broadcast the next milestone as well.
Where did Apple go wrong with their forecasting? Or maybe they've just discounted the mainstream for so long that when they join it (subsidised phones, latest technology) it puts all their models out of whack.
And it's definitely bad. Apple should be taking advantage of the positive environment for their phone to build momentum, which they need against the companies that compete with them. People who might have switched from some other product but couldn't buy may be lost forever.
It would be great if Apple sold 100 million phones next year, but they may have done themselves in with their strange pessimism.
All of this forecasting must be based mostly on international sales, because the United States market is mostly a zero-sum game.
I guess I'm wrong. I find it amazing that that many people are willing to undertake the onerous contractual and provider obligations "buying*" an iPhone implies, especially in the current economy.
(*It's not ever really your phone, since you can't install your own software on it, or use it with any GSM provider. It's Apple's or AT&T's phone--you're merely leasing it.)
Apple's disastrous planning will simply ramp their increasingly poor quality control issues, abundantly visible on their own discussion forum, to the iPhone.
Just stand in line at the Genius Bar for yet another repair, as I have many times (2 Airport Extremes, two MacBooks, two Airport Expresses, one wireless keyboard, a constantly disappearing Apple TV and wireless router in the Airport Utility) in the past 12 months, and listen to the litany of like issues from your fellow customers in the queue. Then read the discussion boards. These are not isolated incidents.
QC issues? Can you say Leopard? Apple TV? Apple Airport Extreme? iPhone 2.0 software? Just about any wireless product they make? Not one of these was ready for prime time when released, as Apple migrated to the MSFT model of "let the customer do the debugging for us".
Trust and brand equity take years to build and months to destroy, and Apple seems unaware of the fact that trust, once lost, is seldom regained.
No company's stock trading at over 30 times future earnings, making consumer discretionary products which no one needs when the alternative is putting bread on the table while the world heads for a depression, is remotely a buying opportunity.
While the Reality Distortion Field can support the stock with hype when times are good, it has yet to be proved as a workable model in a depression - something neither Apple or any of its customers have experienced.
Add a star CEO, with no visible succession planning, who's health issues have been amateurishly obfuscated by the marketing department, and you have a stock trading at under $100 twelve months hence.
...... while the world heads for a depression.....
Really.... that's a pretty strong forecast!
On what basis do you say that?
Apple is growing fast, they already sitting on $20.8 billion in cash, not to mention microsoft is only holding $23.8 billion
http://www.businessweek.com/magazine...mpaign_id=yhoo
Where did Apple go wrong with their forecasting? Or maybe they've just discounted the mainstream for so long that when they join it (subsidised phones, latest technology) it puts all their models out of whack.
And it's definitely bad. Apple should be taking advantage of the positive environment for their phone to build momentum, which they need against the companies that compete with them. People who might have switched from some other product but couldn't buy may be lost forever.
It would be great if Apple sold 100 million phones next year, but they may have done themselves in with their strange pessimism.
I agree that they have most likely lost sales due to the interruption in the supply chain, but I also think they can stem the losses with a quick supply chain refill. If this short supply carries into September or October, then I think it spells trouble
Apple stock at this level of around $155 is such a great buying opportunity, it's incredible. I am pretty sure that we will be over $200 by the end of the year. Over 30% profit growth, incredible new products, new revenue streams, $21 Billion in cash, no debt makes this a company I love owning. The iPhone sales are going to take Wall Street by total surprise. This may well be the last opportunity to get in at this level.
We've heard this all before...yet the stock continues to get punished because of conservative estimates.
Wall Street is a crap shoot at best. Personally I'd love to see APPL at $200+ but I'd be surprised if it ended at $180 by year's end, given the state of the economy.
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Apple stock at this level of around $155 is such a great buying opportunity, it's incredible. I am pretty sure that we will be over $200 by the end of the year. Over 30% profit growth, incredible new products, new revenue streams, $21 Billion in cash, no debt makes this a company I love owning. The iPhone sales are going to take Wall Street by total surprise. This may well be the last opportunity to get in at this level.