Apple has solved its iPhone 5 supply problems - just in time
Ship times hit 2 weeks Tuesday and a spot check found it at 9 out of 10 of Apple stores — FORTUNE — Despite stock-outs, production hiccups and Foxconn worker unrest, it looks like Apple (AAPL) will have an iPhone 5 available …
Context & Ripple Effects
Foxconn attributed the initial shortage to the iPhone 5’s complicated design in October, while saying productivity was improving. Apple’s online delivery estimate then fell from three to two-to-three weeks by November 12, indicating that the production constraint tied to the design was easing before retail inventory caught up.
With Apple devices leading a Nielsen holiday wish-list survey, availability entering the holiday period matters more than a routine shipping update. The reported two-week delivery estimate and stock at nine of 10 Apple stores turn improving factory output into sales-ready inventory.
First-order effects
- Apple can serve more iPhone 5 buyers through both its online store and retail locations, reducing the purchase delay created by the earlier shortage.
- Foxconn’s improving productivity is translated into retail replenishment, despite the worker unrest that accompanied iPhone 5 production.
Second-order effects
- Apple’s holiday sales opportunity becomes less constrained by product allocation and more dependent on converting the demand reflected in the earlier reduction in online wait times into purchases.
- Foxconn must sustain output beyond clearing the initial backlog: wider store availability requires a steadier flow of replacement inventory across Apple’s retail network.
Third-order effects
- The iPhone 5 episode shows how a complex handset design can make launch availability depend on contract-manufacturer execution, not solely on demand or retail distribution.
- If this pattern persists, Apple’s product launches will be judged increasingly on whether manufacturing capacity reaches stores early enough to capture seasonal demand.
The trend: Smartphone launches are becoming supply-chain execution tests, with design complexity and assembler productivity determining how quickly demand becomes revenue.