Recently reports have surfaced that Apple has reduced the orders for parts to make the iPhone 5. There are three theories as to why Apple has taken this action. 1. The iPhone 5 is not selling as well as they had hoped. 2. They have designed a way to produce the iPhone 5 more efficiently. 3. Apple is preparing to roll out another product in the Spring. All three theories have a basis in corporate strategy, each with very different implications.
Is the iPhone 5 not selling as well as Apple had hoped it would sell? The iPhone 5 broke records for opening weekend sales, selling over five million units. However analysts were disappointed because some had predicted that over ten million units would be sold in the first weekend. Were the analysts a little over zealous in their estimates? Forecasting accurate sales numbers can make or break a company. It is also one of the hardest numbers to figure out. How can we expected to predict the future? We’d like to believe the consumers will act in a predictable way, but obviously human behavior is unpredictable. What this all boils down to is that if Apple had over estimated their original sales forecast numbers then it would make sense that they would be tapering off orders for parts to produce the iPhone 5.
Has Apple designed a way to produce the iPhone 5 more efficiently? Jay Yarrow from Business Insider described a theory as “Apple may have put in a bigger manufacturing order under the assumption that the iPhone 5 was going to be hard to make. Turns out it’s not that hard to make, so Apple can cut its order.” Again an important part of creating and maintaining a business strategy would be to accurately predict the resources you will need to produce your product so that you don’t over buy or under buy.
Is Apple planning a new product rollout in the Spring? Apple has recently moved from rolling out products once a year to doing new product rollouts twice a year. This is a significant change in strategy for Apple, and we have to question whether or not it is a good idea for Apple to roll out products at double the pace. Should we follow the old adage “If it ain’t broke, don’t fix it?” Or is it important to try to keep pace with new strategies and try new things?