$AAPL Struggles To Meet Demand for iPhone 7 Plus

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While Apple CEO Tim Cook knew the company’s new iPhone 7 and iPhone 7 Plus would start selling immediately upon its release, he did not expect the latter to start selling as fast as it currently is. According to Cook, although the company is working to match the demand for the iPhone 7 Plus to the best of its ability, it might not meet the all the demand by the end of the year.

In an investor call discussing Apple’s fourth-quarter earnings Cook had this to say on the iPhone 7 and 7 Plus hitting the supply/demand equilibrium:

“It’s hard to say, I believe that on the iPhone 7 we will, on iPhone 7 Plus I’m not sure. I wouldn’t say yes at this point because the underlying demand looks extremely strong on both products but particularly on the iPhone 7 Plus vs our forecast going into the product launch.”

Hitting the equilibrium is imperative for Apple who is looking for its first return to sales growth in the first quarter this year. Like many companies, the holiday quarter is crucial for Apple, who has an even more special opportunity to capitalize seeing as though Samsung’s Galaxy S7 and Galaxy Note 7 are literally bursting into flames.

Apple has seen a decrease in iPhones sales over the years, mainly due to the oversaturation of the smartphone market. On top of this, Apple’s target market consists of those from the higher-end which does not bode well when other manufacturers are looking to compete by beating it at a lower price point. However, when asked about the Apple’s competitors CFO Luca Maestri said:

“We are supply constrained on the iPhone 7 and 7 Plus, when you talk about other competitors, it’s not particularly relevant to us right now because we are selling everything we can produce. When we look at all these things in totality, we think for the total company, we believe revenue is going to grow. We don’t get into specific product from a unit standpoint giving guidance. We feel very confidant for the trajectory of iPhone going forward.”

While Maestri may feel confident about the iPhone’s future, he cannot disregard the issues its supply constrain is causing right now. The iPhone 7 Plus has already seen immense delays in shipping due to the imbalance in supply and demand. With the end of the year just around the corner, Apple is furiously working to make as many iPhone 7 Plus phones as it can, and it is imperative that they find a way to make it work.

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