Global demand for Apple’s (s aapl) iPhone 4 continues to outpace supply, with Japan’s Softbank late last week ceasing to take pre-orders for the new handset and O2 saying it will limit initial sales to existing customers. Both carriers are following in the footsteps of AT&T (s t), which after experiencing 10 times the number of pre-orders than for the iPhone 3GS, shut down the pre-order process — an exercise in frustration for many — within a day. Apple’s online store is still taking orders, but indicates that the phones won’t ship until July 14. But the delays won’t hurt sales of iPhone 4 over the long term.
With an estimated eye-popping 600,000 units pre-sold, it seems safe to call iPhone 4 a success since pent-up demand will only continue to grow as Apple builds more handsets for those who missed out on the first batch. Supply could continue to be an challenge over the short term, as analyst reports indicate a production yield issue on the small IPS LCD panel, but LG, which supplies the panel, expects to solve the issue within 90 days.
Apple’s reliance on third parties for handset parts is no different than any other mobile device seller, and issues like that of the LCD production prompted Om to ask if Apple has a “too much of a good thing” problem. Indeed, analysts fear that demand for last year’s iPhone 3GS will drop off faster than supply can ramp up for iPhone 4, which would limit second-quarter handset sales for Apple.
Even if that happens, however, once the iPhone’s supply catches up with demand in the third quarter, I wouldn’t be surprised to see Apple hit a new high in quarterly handset sales, breaking the current record of 8.75 million sold during in the first three months of 2010. What remains to be seen is if the iPhone 4 will help Apple in the war against Google (s goog), which saw more Android phones move than iPhones during that period. Google doesn’t manufacture the devices, but instead relies on various original equipment handset makers — even if one or two face supply chain issues, there are dozens more that can build smartphones in mass quantities.
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