Tuesday, June 29, 2010

Will #iPhone 4 Supply Chain Woes Drive #Apple Users Away?

Apple has not been able to deliver enough iPhone 4's to satisfy demand, plus early reports claim reception is worse than with previous model. Look for frustrated users to start turning to alternative Android models if Apple doesn't correct the problems soon. R.C.J.

Here is what iSuppli says about the iPhone 4's woes: Apple Inc.’s difficulties in satisfying the massive demand for the iPhone 4 are raising questions about the company’s management of the supply chain and prompting frustrated customers to consider competitors’ smart phones, according to iSuppli [which] estimates that Apple in 2010 will ship 21.7 million iPhone 4s, representing 51 percent of the 42.6 million iPhones Apple is expected to ship during the year. Releasing a new phone every June since 2007, when the first iPhone launched on the market, Apple has risen very quickly from virtually zero presence to become the No. 3 smart phone player, ranking just below Nokia Corp. and Research In Motion Ltd. (RIM)—both of which have enjoyed much longer runs in the wireless field. Nokia, responding to the threat of the iPhone 4, recently reorganized its business units. Meanwhile RIM, its share of the market also under assault, is working on a highly anticipated update of its operating system. The huge early demand for the iPhone 4, however, has come at some cost to Apple. Logging 600,000 units on the first day that the product first became available for pre-ordering, the Apple Store and partner carrier AT&T Inc. very quickly became overwhelmed, prompting both to stop taking orders just one day after the pre-order was available. In addition to the order freeze, consumers reacted with dismay to Apple’s repeated pushback of its online pre-order shipment date—first from June 24 to July 2—and then further back to July 14....
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