Monday, September 24, 2012

Can Apple Inc. (NASDAQ:AAPL) Sustain the Demand for its iPhone 5?

Apple Inc. (NASDAQ:AAPL)’s iPhone 5 has managed record draws with people lining up overnight to but the lest device from the company.

Two million phones were already sold out in advance orders and the demand for the phone on the second day of its sales is unflagging.

But now a serious question arises. Can the company feed that demand? Does it have a robust supply base?

There have been reports that U.S. network carrier Sprint had said that on the East Coast (in the United States) stores had been constrained to keep up with the demand as their stock of iPhones had been sold out, just hours after it went on sale.

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Sprint executives expressed themselves as happy with the response.

While eager customers generally throng the Apple stores, there are others who prefer to go to the outlets of carriers, which offer more stores, lesser waiting time and also better deals on the phones.

All this demand has prompted Piper Jaffray analyst Gene Munster to estimate that the iPhone 5 will sell between 6 and 10 million units in the launch weekend itself.

To answer the question about the supply issue, there are reports that supplies may lag demand.

A Bloomberg report, quoting Barclays, said that Apple's supply may not be able to keep pace with the unprecedented demand chiefly due to the shortage in supply of components.

It may be recalled that prior to the launch there were reports that Sharp, which makes the LCD display screens, had a production problem which was delaying the dispatch of the screens to Apple's assembling factories.

While the success of the iPhone 5 is assured, the coming days will test Apple's ability to meet the continued demand.

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