Apples New Thin Display Adding to IPhone 5 Supply Shortfall

We all know the IPhone 5 is the hottest item to have right now, but how has this IPhone differed from those of the past? This time around Apple decided to design the phone with a thinner, lighter touch screen. This however, lead demand to outstrip supply on the IPhone big debut weekend. This is the first time Apple is using in-cell screen technology whose components are made by LG and Japan Display Inc. This new technology change was the first time since 2010 and helped sell over 5 million new phones in just three days.   The problems arose due to the fact that they needed to produce a lot of product and get it to all their distributors and this more than likely did have some impact on the quality of the phone. The IPhone accounts for 2/3 of Apples profit and a successful debut was critical this time around.

It has been a challenge for LG to keep up with the demand for parts since Japan Display has not yet started shipping out their products due to quality changes they are still working on. As one analyst put it “Apple is struggling to keep up with demand”. This is a huge problem for Apple who relies on its suppliers to be able to keep up with the demand from their customers.

Many analysts are saying these constraints will be short lived due to the fact that Apple spends so much money on these components they will be the first in line to have orders placed and shipped. Apple is these companies best customer and they will do whatever they can to make sure they keep up with Apples demand for parts. The problem now arises if Foxconn Technology Group in China will have the labor needed to be able to keep up with demand when it comes to actually assembling the phones and shipping them out to stores around the world.

6 thoughts on “Apples New Thin Display Adding to IPhone 5 Supply Shortfall

  1. When reading this it makes me wonder if Apple is truly having troubles attempting to keep up with demand. Apple has always seemed like a company that will do what ever it can to create artificial demand. Weather this is a real or artificial supply issue it only seems like it will increase the preceived vale of the new phone, once again making Apple the winner.

  2. Although Apple is faced with unprecedented demand for the new iPhone 5, selling out its first wave of phones in stores and pre-orders, I believe it is the manufacturers of the iPhone’s components that are more unprepared for this new demand level. The Foxconn factory has been plagued with controversy since the original iPhone (suicides, underage labor, mini-riots), and this new demand level will surely put a strain on their existing situation. In addition, you are right with the fact that Apple is always “first-in-line” when it comes to receiving screen components from manufactures like LG and Japan Display Inc. Often times, Apple puts in such a large order that it leaves other phone companies in the dust, having to wait months to receive their orders upon Apple’s order being filled. All in all, I feel Apple is doing all it can to supply enough phones to fill demand; it is the component manufacturers that seem to be more unprepared to deal with the unprecedented volume. As well, other phone companies don’t have a single phone that can alone match the demand of Apple’s singular iPhone so it seems Apple will take the proper steps to ensure stable supply levels in the future.

  3. Apple is on top of its game every year with the new releases of the Iphone. During the release of the Iphone 4S the phones pre-orders sold a million phones in the first 24 hours. The iphone 5 sold 2 million during the first 24 hours. That is a 1 million unit increase. Apple is gaining so many customers each year that I do agree part manufacturers cant keep up with Apples demand.

  4. With such a high demand for these iPhones, I wonder if companies can truly keep up with today’s demand. It seems that Apple is producing their new products too quickly for companies to replenish their quantity of supplies for Apple. With this in mind, I feel that with the release of a new phone every year, Apple is placing extreme pressure on the industry and although demand for the iPhone will not die down any time soon, the demand for their supplies will always be at an extreme level.

  5. I found it shocking that Apple couldn’t keep up with the demand. They anticipated selling about 10 million iphones the first weekend. For a company that knows how “hot” their products are, I’m surprised they were not prepared. I agree with the comment above me, that they are releasing products too fast before they can replenish their quantity of supplies. As a huge apple follower, I’m finding myself replacing my apple items on a yearly basis. Even as a customer I can’t keep up.

  6. I think apple does a pretty good job of making sure their suppliers will be able to keep up with the demand of their cell phone. Apple obviously does forecasting, even though forecasting is never accurate. Their forecasting is probably pretty close to the actual demand of the phone. I understand with Foxxconn and the issues the plant is having with strikes and other complaints, causes an unexpected problem for apple. But I have done a lot of research on apple in the past about their suppliers and found that in events like the one currently happening with foxxconn they tend to have a back up plan. If one plant cannot produce what is needed then they move to another supplier to keep up with the demand. If suppliers fail to produce what apple demands, Apple normally drops them as a whole.

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