Join        Login             Stock Quote

Apple (AAPL) iPhone 5 Demand Tough for Foxconn to Cope With

 November 07, 2012 12:22 PM

(By Balaseshan) Apple Inc.'s (NASDAQ: AAPL) iPhones assembler Hon Hai Precision Industry, the entity of parent Foxconn Technology Group, is finding it hard to cope with the massive demand for iPhone 5 units, according to a Reuters report.

As reported by Reuters, Foxconn Chairman Terry Gou admitted, "It's not easy to make the iPhones. We are falling short of meeting the huge demand".

But, according to the Wall Street Journal, Gou said Foxconn is shipping "far fewer" iPhone 5 models than Apple requested on quality control issues. Gou declined to say which of the phone's design features has caused production issues and how long it will take for those issues to be solved.

[Related -Fusion-IO, Inc. (FIO): Can Fusion-IO Q2 Results Cheer Street?]

Analysts have reported Foxconn expanded production of the iPhone 5 to its other unit, Foxconn International Holdings (FIH), which typically makes non-Apple products, to address the shortfall. However, Gou declined to comment on brokerage reports saying that FIH had taken on some production.

Following the launch, The Wall Street Journal reported an executive saying the iPhone 5 is "the most difficult device that Foxconn has ever assembled. To make it light and thin, the design is very complicated."

On September 24, Apple said it has sold over five million of its new iPhone 5 - the thinnest and lightest smartphone ever - in the first weekend after the launch, breaking the previous record of four million held by the iPhone 4S.

[Related -Google Inc (GOOG): Why Nest Labs Deal Is A Wakeup Call For Apple Inc.?]

Apple said iPhone 5 demand exceeded the initial supply and while the majority of pre-orders have been shipped to customers, many are scheduled to be shipped in October.

"While we have sold out of our initial supply, stores continue to receive iPhone 5 shipments regularly and customers can continue to order online and receive an estimated delivery date. We appreciate everyone's patience and are working hard to build enough iPhone 5s for everyone," said Tim Cook, Apple's CEO.

In addition, as previously expected by BMO Capital Markets analyst Keith Bachman, Apple guided the first quarter below the Street view as the tech giant is experiencing supply constraints related to iPhone 5, making it difficult to cater to the huge demand.

AAPL is trading down 3.01 percent at $562.76 on Wednesday. The stock has been trading between $363.32 and $705.07 for the past 52 weeks.



Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageTackling China's Debt Problem: Can Debt-Equity Conversions Help?

China’s high and rising corporate debt problem and how best to address it has received much attention read on...

article imageWill Job Growth Kill The Bear-Market Signal For Stocks?

It’s all about jobs now. Actually, it’s always been about jobs. But the stakes are even higher—perhaps more read on...

article imageAutomating Ourselves To Unemployment

In this current era of central planning, malincentives abound. We raced to frack as fast we could for the read on...

article imageFed: Waiting For June… Or Godot?

The Federal Reserve left interest rates unchanged yesterday, as widely expected. But the possibility of a read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.