Supply constraints threaten iPhone sales, analysts warn Sometimes, being popular has its drawbacks. Just ask Apple.

Apple's iPhone is one of the most popular smartphones in the world, and its latest iteration – the 4S – is expected to be the company's best selling version yet. However, as consumers prepare for the holiday season, many are finding difficulty in procuring one of the prized mobile phones, according to Fortune.

Apple's supply chain, which current chief executive Tim Cook helped to completely overhaul, is a global behemoth. Cook completely reworked the firm's logistics division during his tenure as chief operating officer, helping to orchestrate new deals with manufacturers and improve efficiency.

The company's more streamlined supply chain helped drive procurement cost reductions. Cook also improved the company's strategic sourcing and was instrumental in helping Apple increase profit margins. Still, the world's most valuable technology company has faced unprecedented demand for the iPhone this year, and Rodman & Renshaw analyst Ashok Kumar contends demand will likely outstrip supply.

"Layering on the estimated 4 million iPhone 4S that were manufactured (but not shipped) in the September quarter, overall iPhone shipments in the December quarter could come in around 30 million units or below street estimates," he said in a note to clients.

Shares of Apple have fluctuated since cofounder Steve Jobs died in early October, but some investors are concerned the company could report depressed earnings as a result of the supply chain disruptions. In its last quarterly financial report the Cupertino, California-based product giant missed analysts' expectations for the first time in at least six years, according to Bloomberg.

For its part, Apple contended that speculation among consumers about whether the firm would release a new iPhone contributed to lower sales in its last quarter. Apple, which is notorious for its conservative fiscal projections, said its fiscal earnings in the current quarter would surpass analysts' expectations.

However, the iPhone is a critical component in Apple's product arsenal, and hiccups in its supply chain could negatively impact the company's revenue. Apple works with manufacturers throughout Asia, and Cook acknowledged in October that flooding in Thailand affected some of the company's suppliers.

Considering Apple sold 16.24 million iPhones in the December quarter in 2010, analysts' inflated expectations underscore how Apple has perennially smashed financial projections. Susquehanna analyst Jeff Fidacaro forecasts Apple will sell between 29 and 34 million iPhones during its current fiscal quarter. If correct, that would place year-on-year sales growth between 79 and 101 percent.

Not too shabby.




 
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