14 DAY TRIAL // As every year goes, 2014 saw Apple again struggling to cope with the demand for its newest handsets. According to a survey conducted by investment bank Piper Jaffray, things have improved on the production lines, but the yield rates are still behind demand.
In a research note published this week and handed to investors and various media outlets, leading Apple analyst Gene Munster, of Piper Jaffray, estimated that demand for the iPhone 6 and iPhone 6 plus remains as strong as ever. In fact, customers are craving the newer smartphone even more than they did the 5S last year.
Size matters
Speaking on behalf of his firm, Munster noted in this week’s research note, “We conducted a survey of 1,004 US consumers. Of those looking to purchase a smartphone in the next three months, 50% said they plan on purchasing an iPhone vs. 47% in September, following the iPhone 6 announcement.”
So demand is not only strong, it's actually on the rise. But that’s only half of the story. According to the Apple analyst, “By comparison, demand for the iPhone decreased from 50% in Sep-13 to 44% in Dec-13 following the iPhone 5S launch. Overall we believe this shows that consumers are extremely interested in the larger screen iPhone 6, a testament to the strength of the current upgrade cycle.”
The gist of it is that, yes, size matters. Apple fans have been waiting for the larger-screen iPhones for more than two years, while Samsung has been capitalizing on Apple’s self-imposed delay with an army of Android devices, all featuring screens that went well beyond Apple’s 4-inch mark.
But these numbers also serve as explanation for the situation reported by the BBC in Asia.
Supply chain checks
Munster tells investors that things are improving in the supply chain. Apple’s partners in the Far East are churning out more and more iPhone 6 devices each month, leading to 77.6 percent availability of the handset in stores. This compares to 56.1 percent two weeks ago, Munster said.
As you might have already guessed, that's still not enough to fulfill the actual demand from end users worldwide. Which is why Pegatron workers are slaving away to improve shipping quotas.
Take the good with the bad
As you might recall, a documentary aired by the BBC this week revealed the practices employed by Pegatron – an iPhone assembler – to keep the yield rates high and the workers committed to finishing their daily quotas for fear of being replaced by someone else.
The documentary cast a bad light on Apple, whose CEO and top executives said they were “deeply offended” by the Panorama special, and that the Cupertino company was doing more than anyone in the industry to ensure fair treatment for the people assembling all its hardware products, not just the iPhone.
