Apple’s long-awaited iPhone 5 was released in September 2012, but Apple has now landed in trouble with manufacturer Foxconn, admitting that it cannot keep up the demand for the phone.
With Apple shares already dipping, this is a major concern for the company’s investors.
Design and Component Issues
The Chinese company, Foxconn, manufactures the popular iPhone, but has recently stated that it is shipping fewer than necessary to meet demand due to design issues and problems with some components.
Some of the issues are due to the iPhone 5’s larger screen and the lightening component, but Terry Gou, Foxconn’s chairmain, refused to offer any more details about the problem.
5 million iPhone 5s were sold on the first day it was released, and since then, the demand for the phone has increased but Apple is currently unable to fulfill demands.
The online store for Apple shows that there is a delay by as much as four weeks for customers placing an order, which can be a letdown for many customers who were looking forward to the phone.
Apple individually selects every company that makes and provide components for their products. One part may be supplied by various companies, but this creates delays due to inconsistencies in deliveries.
Apple also has tough demands, and all iPhones must be made exactly the same with microscopic inconsistencies. While this is better for consumers in the long run, it does mean a longer wait; are consumers willing to wait?
iPhone 5: High Competition from Other Brands
On top of the manufacturing problems, Apple is under strong competition from other companies, including Samsung, Nokia, and even Amazon.com. Despite making a claim against Samsung for patent violations, and winning on the majority of accounts, Samsung’s phones are still in high demand.
Google is set to release the Nexus 4 on November 13, 2012, which will also be strong competition for the iPhone 5. While the Nexus 4 is not as good as the iPhone 5 in some areas, it is much more affordable for many. Will Google prove to be strong competition? Will people prefer to opt for the Nexus 4 instead of waiting a month for an iPhone 5? Only time will tell.
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