Wednesday, July 21, 2010, 06:45 am PT (09:45 am ET)
Apple unsure when it will be able to meet demand for iPhone 4, iPadAs Apple continues to face overwhelming demand for the iPhone 4 and iPad, selling every unit it can make, the company remains unsure when its production capacity can find equilibrium.
Both the iPad and iPhone 4 have been consistently sold out since each product launched last quarter. The company announced Tuesday that it has sold 3.27 million iPads thus far, while the launch of the iPhone 4 managed to sell 1.7 million handsets in its first three days of availability.
Apple executives were asked during the company's quarterly earnings conference call on Tuesday when they believe Apple will be able to produce enough hardware to meet consumer demand. Chief Operating Officer Tim Cook said he simply does not know.
"Currently we are still selling both of those products as fast as we can make them," Cook said. "So we are still quoting longer lead times than we'd like, and we're working around the clock to try to get supply/demand in balance. In the scheme of things, its' a good problem to have."
Cook said he doesn't view high demand as a "problem," ever, but he remains confident that the company will be able to increase capacity to meet consumer desire for the iPad. He indicated that Apple was genuinely surprised by consumer demand for the iPad, and initially was producing too few to meet the market demand that swelled and persisted after the device's April launch.
Apple has been "pleasantly surprised," Cook said, at how fast the iPad has sold to start. He said the product is not following a typical early adopter curve — it's quickly broken into the mainstream.
"I don't know how high is high," he said. "Our gut tells us that this market is very big. And we believe that iPad is really defining the market, and we want to take full advantage of it. And so we are investing enormous time and resource in increasing our capability in getting iPad out to as many people as we can."
As for the iPhone 4, it launched just two days before Apple's fiscal quarter concluded on June 26. He said the company is still ramping up and increasing volume, but there is not one specific thing that has stood in the way of ramping up production.
"It's just a matter of getting up the ramp," Cook said.
The COO also said that Apple does not create artificial product shortages in order to generate hype. Apple is truly struggling to meet consumer demand for its products, and would prefer to sell as many as it could.
"The demand for iPhone 4 is absolutely stunning," Cook said. "And we are working very hard to catch up with demand, and I can't predict when that will occur, but I can tell you that everyone is working very hard to do it."
On Topic: iPhone
- Report: iPhone 5s to soon account for 1 in 5 iPhones, 5c growth stagnant
- Russia's Megafon deal with Apple, Inc. guarantees sales of 750k iPhones over 3 years
- Pebble adds eBay, Evernote & Time Warner as latest smart watch app partners
- Apple continues to add share in U.S. smartphone market, now holds 42%
- iPhones much more likely to be stolen, less likely to be broken or need replacement