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iPhone Demand May Outpace Parts Suppliers

Thursday, January 25th, 2007 at 11:40 AM - by

Apple's iPhone has the potential to be a success, but the company may have issues meeting demand if parts suppliers aren't able to keep up with manufacturing needs. The holiday 2007 buying season is likely to put a strain on suppliers if they aren't prepared to ramp up production quickly, reports CNN.

Touch-panel and NAND Flash memory suppliers face the biggest risk of parts shortages - both are key components in the iPhone. The demand for Flash-based memory chips is growing since they are used in the iPod nano, iPod shuffle, cell phones, digital cameras, and other MP3 players. That demand increases the possibility of a supply shortage before the end of the year.

Merrill Lynch analyst Tony Tseng commented "Flash is the most possible sector that may face the [shortage] problem, and touch screens are also a niche product, so it might be another concern too."

Apple hopes to gain 1 percent of the cell phone market in 2008. Hitting that goal, however, may be based on parts availability, and not consumer demand.

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A guest said: (hide)

Thu Jan 25, 2007 1:36 pm

As far as Flash goes, Apple pre bought all its Flash needs out until I think the end of 2008.

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der passant said:

member since 06 Dec 2006 with 6 posts, unranked, send him a message or view his profile

Thu Jan 25, 2007 1:42 pm

Wow, a parts shortage and the iPhone is not for sale yet! lol

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A guest said: (hide)

Thu Jan 25, 2007 1:54 pm

This kinda sucks for the next-gen iPod as well. It will very likely use a touch screen and basically be an 'iPhone without the phone', as it were.

With the iPhone launch snarfing up all the unique parts that are needed for such a next-gen iPod, I guess we won't be seeing the touchscreen iPod of our dreams until nearly Christmas. Boo.

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nealg said:

member since 22 Mar 2006 with 123 posts, unranked, send him a message or view his profile

Thu Jan 25, 2007 2:21 pm

This is part of the silliness surrounding the iPhone. We have half the articles calling it a failure, the other half saying its a success and now someone talking about part shortages. And here we are, a couple of months away from its launch and still not knowing what the full feature set is going to be. It is all very amusing and leaves me wondering what will it be next?

Neal

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Rainy Day said:

member since 07 Jun 2005 with 607 posts, unranked, send him a message or view his profile

Thu Jan 25, 2007 4:02 pm

Neal, well at least somebody will be right in their predictions!

My money says that anybody betting against the iPhone is either a sucker, or a shill.

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macslut said:

member since 03 Sep 2004 with 61 posts, unranked, send him a message or view his profile

Thu Jan 25, 2007 6:03 pm

Flash shortage? Apple is predicting a need of 10 million flash modules between 4GB and 8GB through the end of 2008 for the iPhone. Apple sold 21 million iPods last quarter. While not all of those were flash based, a very large percentage were.

Not to mention that Apple invested in a ton of flash from Samsung.

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gslusher said:

member since 13 Nov 2002 with 2088 posts, unranked, send him a message or view his profile

Thu Jan 25, 2007 7:59 pm

Rainy Day wrote:
Neal, well at least somebody will be right in their predictions!

Good one, RD! It's a bit like psychics--make enough predictions (especially contradictory ones) and you're bound to get some right.

In his presentation at the TED (Technology Entertainment Design) conference, Michael Shermer of the Skeptics Society demonstrated a device that was sold for $900 or so to school systems. It consisted of a plastic block and a Radio Shack telescoping antenna. It was supposed to be a "dowsing rod." It could be "set" for different materials--in the schools' case, it was supposedly for marijuana. The school officials would walk down the halls with it and the "dowsing rod" would supposedly point to lockers that had marijuana. Shermer asked the rhetorical question, "Does it work? Yes, if you open enough lockers."

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