Will the Iphone 5 Demand Exceed Supply?

Only available on StudyMode
  • Download(s) : 54
  • Published : May 1, 2013
Open Document
Text Preview
Apple recently released their next yearly IPhone update, aptly named The IPhone 5. As usual, like every year, the IPhone is expected to either sell out, or at least sell in the millions. Some economist/experts are questioning whether demand will exceed supply. To support their claims, many analysts would look at previous IPhone release trends, which included absurdly long lines at Apple Stores, a high influx of pre-orders on the online ITunes Store, and the obsession of people who "must" get the newest and fastest tech in the world. Apple will likely sell nearly increase their yearly sales by 100%. In 2011, Apple averaged $17 million per quarter sales of IPhones. Analysts expect a quarterly sales figure of $35 million. That $35 million figure encompasses sales of all IPhones, not only the IPhone 5. The IPhone 5 has been one of Apple's most aggressive rollouts to date, with availability in 31 countries in September, and over 100 countries by the end of the year. Foxconn (they make the processors and boards) has had some recent labor issues. Like last year, when a few incidents of workers committing suicide because of low wages and subpar working environments, this caused a shortage in IPhone 4s'. A month ago, news reports surfaced that Foxconn employees went on strike due to working conditions, overtime without compensation, and inadequate training of using chemicals in the production process. The article states that Apple may have trouble keeping up with the initial demand because of component shortages, such as displays and processors.

In referring to quantity demanded, it will always be at its highest on the released date/days, but will falter in a couple months once the early majority get their devices. This influx of high demand will likely cause a shortage of IPhones. The supply situation should be balanced with demand by the holiday season. Now, according to the article, it seems supply won't meet demand, which is not normal for...
tracking img