David Silverberg
Two and a half months after the launch of the Apple iPhone SE, the company still hasn't caught up with demand — a somewhat surprising issue for Chief Executive Tim Cook, whose noted strengths are in logistics and operations.
As of this week's annual Worldwide Developers Conference, U.S. Apple retail stores are still reporting two-plus-week wait times for new orders of the 4-inch iPhone SE. The handset launched in late March and supply has been constrained ever since.
In April, rumblings from Apple's supply chain claimed that Apple had increased orders for the iPhone SE, planning to build more than 5 million units in the quarter to keep up with demand. Those efforts, if accurate, don't appear to have paid off yet, with demand continuing to outstrip supply into the summer.
Consumer interest in the iPhone SE also remains greater than supply overseas, where customers also face similar wait times.
Apple's apparent inability to satisfy iPhone SE demand contrasts with the company's preparation for the launch of the Apple Watch last year, when shipping times had drastically improved just a few months after launch. While estimated deliveries were advertised at four-to-six weeks after the April 2015 launch, shipment waits had decreased to under a week by early June.
Earlier this year, Apple said iPhone SE demand is being driven by iPhone users who prefer smaller form factors, as well as switchers from other brands. Aggressive pricing is also driving sales with a $399 starting price for 16 gigabytes representing the lowest entry point for a new iPhone ever.
"We're thrilled with the response that we've seen on it," Cook said of the iPhone SE during his company's quarterly results conference call in April . "It's clear there's a demand there that's much beyond what we thought, which is why we have the constraint that we have."
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57 Comments
Why ding Cook on Logistics and Operations when what he really lacked was a Crystal Ball to know exactly how successful the SE would be? Now that they are getting to know more of what they need, I'm sure that logistics and operations knowledge is helping them close the gap faster than most people would. But what are you going to do when you get the mother of all 4in backlogs.
Sounds more like Cook should be praised for pursuing the SE in general.
I think the pricing is definitely the main thing driving sales. A lot of people will always buy the cheapest model, even if they have the means to buy the more expensive ones. I know a few people like that myself. One of them has at least a million dollars at their disposal, but always buys the cheapest iPhone. Now the cheapest phone is as fast as the most expensive, I don't even bother advising against it any more.
But I was assured this phone was uninteresting and uninspired and no one wanted it.
Apple don't want to sell too many of these as no doubt the profit margin is miniscule compared to the flagships. I suspect Apple wont up the se supply as it will likely impact the iphone 7 supply chain.
Hard to tell what this means, but it is surprising. Either demand is VERY strong, or something odd is happening. The more likely reason would seem to be very strong demand, any other ideas or explanations?