Apple Inc. (NASDAQ:AAPL) set a record for iPhone sales in its first weekend, producing more than 5 million iPhone 5 sales – though still under many analysts’ lofty expectations of 6 to 10 million units – and many retail stores ran out of their on-hand supply before the weekend was even finished. Was the company not prepared for such a demand?
Well, yes and no. Apple Inc. (NASDAQ:AAPL) as a company might have been ready enough to announce Sept. 21 as the launch date of the iPhone, but it seems that a couple of companies in the supply chain may not have been ready. There is a report that the main source of the shortage of iPhones comes from the two companies contracted to make the new touch-cell display – where the display and touchscreen are innovatively combined into a single layer – with one, Sharp, having so much trouble mitigating defective displays that it delayed producing the displays until after the iPhone launched. That has seemed to put the onus of production on one company, LG Display.
At this point, there is no mention of any other supply issues, but possible supply limitations had been described by some analysts in the weeks leading up to the launch, and at least in one aspect that seemed to come true. Despite those rumblings, many analysts predicted as many as 10 million units would be sold on the first weekend, with 6 million being a “worst-case scenario.” Despite setting sales records, posting a number that was below the “worst-case,” Apple Inc. (NASDAQ:AAPL) stock fell more than 1.3 percent Monday and began Tuesday’ trading day at about $690 a share, down from more than $700 just before the launch.
Despite the initial-weekend disappointment, there are still high expectations in general for Apple Inc. (NASDAQ:AAPL), especially with the iPhone 5 due to launch in 22 more countries this Friday. While investors may have bought into the initial “disappointment,” many long-term holders of the stock – like hedge-fund manager Julian Robertson of Tiger Management – will likely be expecting strong returns over the next several months.