Don’t expect the shipping delays for the latest iPhone to go away anytime soon.
Foxconn, Apple’s chief manufacturing partner, is apparently still struggling to keep up with demand for the iPhone 5, despite recent claims from Apple that production has improved significantly.
“It’s not easy to make the iPhones,” Foxconn’s chairman Terry Gou said at a business forum on Wednesday, according to Reuters. “We are falling short of meeting the huge demand.” Gou also reportedly said that, “We just can’t really fulfill Apple’s requests.”
While Gou didn’t go into the specifics, a previous report from an anonymous Foxconn executive pinned the slower production on the complicated design process that makes the iPhone 5 thinner and lighter.
Concerns about supply constraints for the latest iPhone have plagued Apple’s stock for more than a month, ever since Apple reported lower-than-expected opening weekend iPhone 5 sales — a fact that the company suggested was due to limited supply rather than limited demand.
Apple’s stock has declined from a peak of $705.07 a share the day the iPhone 5 hit shelves to about $573 a share when the market opened Wednesday, which has cut the company’s market cap by more than $100 billion.
During Apple’s fourth quarter earnings call last month, CEO Tim Cook tried to reassure investors that the supply issue was improving.
“Our output has improved significantly since earlier this month,” Cook said on the call. “I’m very, very pleased with the progress that we’ve made there; I’m pleased with the current level of output in what is the largest volume ramp in Apple’s history.”
Clearly, it will be a while yet before the supply constraints for the new device go away. As of Wednesday, Apple’s website lists shipping delays ranging from three- to four weeksfor the new phone.
Apple’s stock was down nearly 2% to $570 a share in early trading Wednesday.news source: