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Apple Ramps iPhone Production, Activation Still an Issue
Sunday, August 3rd, 2008 at 4:00 PM - by John Martellaro
Apple customers have been waiting in line lately at 7:30 in the morning for a trickle of iPhones, and Apple may not have been on course to meet its sales goals. According to TechCrunch on Monday, Apple has asked Foxconn to ramp iPhone production to 800,000 per week.
With about 140 days left before Christmas and iPhones trickling into Apple stores and sold out by early afternoon, its possible that Apple wouldnt even meet its goal of selling four million more iPhones in the rest of the year.
Thats the number theyd need to add to the 6 million iPhones 2Gs already sold to meet its goal of 10M in 2008. One problem has been the time it takes to get through the early morning lines, pre-qualification, voucher management, occasional AT&T Foundation Account Number (FAN) flag removal, then in-store activation.
This reporter recently spent 72 minutes buying an iPhone 3G. While the purchase, unboxing and activation at the Macintosh/iTunes station only took 12 minutes, from the arrival time in line, 7:35 am, to departure from the store was well over an hour. One part of that delay was the FAN flag, a business account flag, that AT&T has put on even some personal accounts. Current customers must call AT&T from the Apple store line to have that flag removed before they can buy an iPhone 3G. So if youre upgrading, bringing that old iPhone along is a good idea.
With an estimated 50 to less than 100 iPhones arriving each day at U.S. stores and the time it takes customers to get though the lines, the sales throughput could very well be less than the 4 million iPhones needed for Apple to makes its goal.
According to an Apple source cited by TechCrunch, Apple has asked Foxconn, its exclusive manufacturer in China, to ramp up production to 800,000 units per week, about 40 million units per year.
Thats very close to the estimate Piper Jaffrays Gene Munster has given for Apples worldwide iPhone sales in 2009. If that 800,000 number is correct, Apple will have no trouble blasting through even the most generous analyst estimates of 12-15 million iPhones sold in 2008. That is, if Apple can get the lines in the retail stores moving fast enough.
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