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Apple (AAPL) Solving iPhone 5 Supply Issues

 November 21, 2012 10:58 AM

(By Balaseshan) Despite iPhone 5 production issues, Apple Inc. (NASDAQ: AAPL) is expected to improve the supply of the smartphone in the midst of the holiday season.

According to a report on Apple Insider, Piper Jaffray analyst Gene Munster and his team have conducted store checks and supply analysis at 100 Apple Stores in the U.S., and found the supply of AT&T and Verizon models has "significantly improved," while Sprint units remain readily available.

In addition, Apple has improved the availability of the smartphone to twp weeks now, compared with a Nov. 15 listed shipping time of two to three weeks, and a Nov. 10 shipping time of three to four weeks. Apple's estimated shipping times are often seen as a sign of how well the tech giant is able to keep up with demand, according to Apple Insider.

[Related -Apple Inc. (AAPL): How Q1 Earnings Will Fare?]

Meanwhile, Munster's checks of Apple's stores found "dramatic improvements in availability," as Tuesday night the AT&T model was available at 82 percent of stores and the Verizon model at 72 percent of stores. The Sprint iPhone 5 was also in stock at 92 percent of Apple Stores, according to Apple Insider.

Following the launch of the smartphone, 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."

[Related -Apple Inc. (AAPL): iPhone Trending into Another Carl Icahn Disappointment?]

According to a Reuters report, iPhones assembler Hon Hai Precision Industry, the entity of the parent Foxconn Technology Group, was finding it hard to cope with the massive demand for iPhone 5 units since the Sept. 21 launch.

Analysts have earlier reported that Foxconn has expanded production of iPhone 5 to its other unit, Foxconn International Holdings (FIH), which typically makes non-Apple products, to address the shortfall. However, Foxconn Chairman Terry Gou declined to comment to the Wall Street Journal on brokerage reports.

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

AAPL is trading down 0.16 percent at $559.99 on Wednesday. The stock has been trading between $363.32 and $705.07 for the past 52 weeks.



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