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iPhone 4 Pre-order Stoppages Won’t Hurt Sales

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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9 Responses to “iPhone 4 Pre-order Stoppages Won’t Hurt Sales”

  1. Johnny C Lately

    I think everyone wants this phone but many are forced to settle for Android due to carrier issues. Once iPhone becomes available across all the telcos sales will explode. The Retina Display alone is worth the upgrade for existing customers. It doesn’t hurt that the 4 is the world’s thinnest smartphone either.

    • Precisely, Apple will be overtaken by Androids sheer weight of numbers unless they go to the all the major carriers. 2011 is shaping up to be a crazy year.

      • AT&T hasn’t been doing itself any favors lately, however with both Sprint and now Verizon openly hinting at the end of “unlimited” plans, AT&T may not be as bad off.

  2. TodBradley

    not surprising, alot of people skipped out on the underwhelming 3gs, this is the 1st major revision since the 2G.

    besides who cares about preorders? what matters is total sales, we all know iPhone sales will drop off a cliff after a month. yes they will still sale the most but this 10x preorder in NO WAY means they will 10x total sales like the press (who wants Apple to succeed for their own interests) is trying to insinuate.