More than 600,000 of Apple's new iPhone 4s were sold on the first day of pre-orders earlier this week. The volume was so great that AT&T had to suspend its online sales and Apple had to delay ship dates. Now an analyst reports the company is having difficulty getting enough touchscreens to meet demand.
Rodman & Renshaw analyst Ashok Kumar issued a research note on Friday in which he said the shortage means Apple has had to cut by 50 percent the number of iPhones it can deliver monthly from the original estimate of four million. Kumar said his report is based on information from Apple's supplier, LG Display Company, which he said is hoping to get up to the needed capacity by late summer.
Kumar noted that a similar shortage affected early shipments of the iPad, whose screens LG also makes. Both devices use a Retina display, which features a very high density of 78-micrometer-wide pixels, resulting in four times more pixels in a given area. IPS, or in-plane switching, technology in the displays enable a wider viewing angle than on regular LCDs, and the contrast ratio is four times that of previous models.
The launch of the iPad outside the U.S. was delayed by a month because of an inventory shortage. At the same time that there is too much demand and too little supply of the iPhone 4, there appears to be lessening demand for the previous model, the iPhone 3GS.
The iPhone 4 is scheduled to go on sale in stores on June 24, and the pre-orders started June 15. In-person pre-orders are being accepted at brick-and-mortar Apple and AT&T stores, Radio Shack, Best Buy, and some Wal-Marts.
"It was the largest number of pre-orders Apple has ever taken in a single day," Apple said, adding that it was "far higher than we anticipated, resulting in many order and approval system malfunctions."
1,000 Percent More
Apple noted that "many customers were turned away or abandoned the process in frustration." AT&T reported that its pre-order sales were 1,000 percent more than pre-orders for the iPhone 3GS in 2009.
Earlier in the week, Apple said it will ship iPhones purchased through pre-orders by July 2 instead of the original date of June 24, but it now indicates shipping by July 14.
There were reports that visitors to the AT&T site were seeing other customers' accounts during the iPhone 4 pre-order process. In addition, there were reports that, in some cases, customer information was accepted, but no pre-order was completed. AT&T told news media that it has not been able to duplicate the problems and that, in any case, revealed information did not include Social Security numbers, credit-card information, or call-detail records.
Posted: 2010-06-18 @ 7:42pm PT
To answer Jacob's question, Apple can afford to do this because they have no competition that can even generate this much buzz. They don't care how long it takes to get the phones out, because the demand is so strong and there's nothing out there that would even generate close to 600,000 in the first day. That's what happens in the free market, the strongest stay on top and lose the competitive edge, then they are knocked off their rocker by something they didn't see coming. It's already happening to Apple. They are running out of ideas.
Posted: 2010-06-18 @ 6:25pm PT
Just letting you know that the iPad does not have a retina display. Only the iPhone 4 does.
iPhone 4 has 78% of the pixels that are on the iPad. The iPad actually has a lower resolution than the first three iPhones at 132ppi. First three iPhones have 163ppi, retina display is 326ppi.
Posted: 2010-06-18 @ 5:47pm PT
Sorry Jacob, that's not the case. In fact, the problems they are having are causing people to cancel and start looking at the new Droid.
Apple did make a big mistake in underestimating the demand and it will cost them dearly.
Posted: 2010-06-18 @ 5:43pm PT
You are wrong. Most of the first days pre-orders will get their's on June 24. Some will get their's on July 2 and now July 14. You wrote all would get their's on July 14. WRONG
Posted: 2010-06-18 @ 5:39pm PT
I'm just happy that I know I'm one of those 600,000.
Posted: 2010-06-18 @ 4:59pm PT
How could a smart company like Apple not see something like this happening after what happened with the iPad launch? It kind of seems like they're doing this on purpose to try to make consumers think they want it more than they really do.