Being unable to match the demand of your consumers, is not a situation that businesses often encounter. Usually, it is the other way around. However, when you are Apple and the product in question is the iPhone 7, well, anything can happen. At an investor call discussing Apple’s fourth quarter earning, CEO Tim Cook said that the iPhone manufacturer may be unable to meet demand by the end of the year.
Addressing investor questions about whether a supply and demand equilibrium would be established in the near future, the Apple CEO appeared to be uncharacteristically unsure.
It’s hard to say. I believe that on iPhone 7 we will, on iPhone 7 Plus I’m not sure. I wouldn’t say yes at this point because the underlying demand looks extremely strong on both products but particularly on the iPhone 7 Plus vs our forecast going into the product launch.
This surge in demand can be attributed to various reasons. An important one of which is the fact that Samsung’s champion in the fight has already left the arena — read exploded — leaving iPhone 7 series as the only option for people looking to buy high end flagship phones. Sure, Google Pixel has arrived on the scene as well, but Apple still has the advantages of an early start.
Apple has not been privy to growth in recent quarters and indeed, the company looking for its first return to sales growth in the first quarter this year.
It’s very hard to gauge demand when you’re selling everything you’re making, so we’ll find out more through the quarter but we’re confident enough to give you guys guidance that we’re returning to growth this quarter, which obviously feels very good for us.
And very good is just about the right word. Despite all its huge sale volumes, Apple was in fear of stagnation. Growth had slowed since past few quarters and the forecasts for this year weren’t too great either — considering the fact that iPhone 7 was touted as quite similar to its predecessor.
Amid such conditions, Samsung’s unexpected exit from the arena along with a sudden surge of interest in the iPhone 7, have proved to be nothing short of a a godsend for the company. However, it is now a question of whether the company is able to fully utilize it to its advantage.
Speaking on the topic, Apple CFO Luca Maestri said,
We are supply constrained on 7 and 7 Plus, when you talk about other competitors it’s not particularly relevant to us right now because we are selling everything we can produce. When we look at all these things in its totality, we think for the total company, we believe revenue is gonna grow. We don’t get into specific product from a unit standpoint giving guidance. We feel very confident for the trajectory of iPhone going forward.
So here is where the company stands at present. Demand exceeds supply by huge margins, particularly for the iPhone 7 plus. The company is trying its best to churn out as many devices as it can, however, there can still be weeks long delays between ordering and receiving you iPhone 7 plus. Reading between the lines of Tim Cook’s investor call statements, it appears as if the conditions are likely to persist for some time yet.