The first several chapters of the book have dealt with demand, elasticity and supply. When we speak of demand and supply, we shouldn’t overlook the issues that seem to be swirling around the release of Apple’s new iPhone 5. These represent real-world supply and demand issues. According to Bloomberg Businessweek, Apple is suffering from a supply shortage due to the popularity of the new iPhone, or too high of demand. According to their article, there are several factors that are restricting supply. The first is the new ‘in-cell screen technology’ which requires a more painstaking process to manufacture than the previous technology that was utilized by Apple in former versions of the iPhone. This appears to be causing a bottleneck in the production of iPhones, however, the article goes on to say that other issues at hand involve other technologies that are also emerging and evolving, one of them being the LTE or long-term evolution chips that power the phone. According to Qualcomm, they are reporting ‘constrained’ supplies due to the new manufacturing process.
While there may be issues with supply, the demand doesn’t seem to be far enough ahead of the supply to require alarm as several news agencies are reporting. Apple, by their own account, has shipped over 5 million phones during the first three days of production, with orders to ship many more. According to Bloomberg, they are projected to sell over 170 million phones in the next year. The shipment of over 5 million phones in the first three days seems a bit absurd to state that there are serious restrictions on supply. On top of this, it doesn’t seem like there are too many people crying that the new iPhone is just not available. Everyone who orders a phone receives an expected delivery date. Furthermore, Apple is very good about taking care of its customers and following through on their promises. I say to be able to keep up with demand in the fashion that only Apple can do, is remarkable. Any management team that can deliver that kind of supply, under the conditions that Apple routinely does, should not only be applauded, but also replicated to the success of that business.