From the looks of it, the iPhone 4 is proving to be a hit, even before the release of the device. Apple (s aapl) got 600,000 orders — despite a creaky website and a leaky (U.S.) partner, AT&T (s t). Whether it was the leaked device or just pent-up demand, or just simply impressive capabilities — Apple is going to make mucho dinero with this new phone.
Or will it? A report from Rodman & Renshaw analyst Ashok Kumar indicates that there are some dark clouds on the horizon, thanks to some problems in supplies of the IPS LCD display — the one which adorns the iPad and the new iPhone. (see iPhone 4: Retina Display) In a note to his clients, Kumar writes:
Low yields on the IPS LCD panel from LG Display have dramatically impacted the production volumes for iPhone 4. Our supply chain checks indicate that our earlier monthly shipment estimate of 4 million units have been reset by about half. The hope is that LG transition to Gen 5 LCD capacity by late summer could help alleviate the production bottleneck. Meanwhile there is a non trivial risk in the September quarter whereby demand for the legacy 3GS iPhone drops off faster than production can ramp up for the iPhone 4.
Hmmm…does this explain the 10-day delay in iPhone 4 shipments? Or is that just too much demand? The Counts of Cupertino tend to use cutting-edge technologies or make product decisions (great for consumers) that are sometimes challenged by the real-world realities of factories and productions.
They rely too much for parts on their part vendors. While it’s done well in the past to buy up vast quantities of parts such as memory chips, it might be difficult for the company (even with its vast resources) to corner the market on too many different components.
Actually, this makes me wonder if the runaway success of Apple’s many product lines makes the company susceptible to “too much of a good thing” problem.