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Is Apple (NASDAQ:AAPL) facing Supply Constraints?

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Over four million pre-orders! Those were the headlines on magazines, news coverage and websites. Apple (NASDAQ:AAPL) made sure people knew it was still high in demand. On Monday, as per tradition, it was expected of Apple (NASDAQ:AAPL) to send out a press release, highlighting their figures and sales for the first weekend.

This year around, it’s not the demand that’s the issue, it’s the supply. Apple (NASDAQ:AAPL) could have easily managed to sell off all its iPhone 6 in its partner stores if it had enough supply. The lead time for the iPhone 6 is much shorter as compared to the iPhone 6 Plus. Figures also show that there is a huge difference in between usage of the iPhone and iPhone Plus. This could simply mean that due to its larger screen the iPhone 6 Plus wasn’t as easy to build as the smaller version.

History has shown over and over again, that every year with a new iPhone, the demand seems to be increasing and every time Apple (NASDAQ:AAPL) has been able to deliver. IPhone 4 had initial a demand of 1.7 million, the first weekend and went on to sell 4 million of them. Similarly Iphone 5s had over 5 million and iPhone 5c and 5s was 9 million. Analysts have no doubt that it would be a similar case this year around as well, despite the challenges of production.

Tracking devices like Fiksu and Chitika are being used to trace the iPhone 6 and 6 Plus usage but different geographical regions show different results, when being compared to last year’s 5 series. But these devices have helped determine potential sales. Apple (NASDAQ:AAPL)’s analyst Gene Munster has given an expectation of 6.5 million iPhone 6 and IPhone 6 Plus sales in comparison to the 5.5 million last year of iPhone 5s.

Munster also highlighted the fact that production has never been a problem for Apple (NASDAQ:AAPL). It produced 9 million iPhone 5c and 5s last year and this year much more is expected. He says a larger screen is nothing more than just a challenge. The challenge only brings a learning curve in the production process.

Ben Reitzes of Barclay’s has his fingers crossed at 7 to 8 million on iPhone 6 and 2 to 3 million on 6 Plus. Keeping in mind that China isn’t included, otherwise the figures could have easily gone up another 20 percent. He set these figures knowing that expectations are high but supply is limited.

As Toni Sacconaghi puts who is reputed to be the most unbiased analyst, it the iPhone 6 and 6 Plus sales could touch 7 to 9 million in reality but expectations are of 10 million at least. He believes these expectations can’t be attained due to strong supply constraints as compared to the previous years. China not being part of the launch yet and no low cost model as 5c from the past, many might disagree with Sacconaghi’s reasoning as the most prominent problem at this point seems to be manufacturing constraints only.

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