Supply of Apple iPhone 7 Shy of Demand, Again

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Apple Inc. (NASDAQ: AAPL) will not have enough iPhone 7 units as the phone launches. This happens virtually every time a new iPhone launches, and it is either bad management or a PR trick Apple uses with regularity.

Bloomberg reports:

When hordes of customers line up Friday to buy the iPhone 7 on its first day on sale, many risk walking away empty-handed because, more than in previous years, Apple Inc. has not made enough of the devices to meet demand.

Customers who haven’t pre-ordered the larger iPhone 7 Plus models will be unable to buy them in Apple stores Friday, the company said earlier this week. The 5.5-inch-screen model boasts a dual back-facing camera system, and analysts said inadequate supply of components for that feature has held up manufacturing.

When the iPhone 5 launched on September 21, 2012, Apple had a nearly identical problem.

Is the shortage created by Apple management or a sign of poor supply chain control? Only a few people know the real answer. It would seem that Apple’s underestimation of demand in the past would teach management a lesson. Even if only one supplier of components is too blame, Apple should have had explicit control over production of every part of the smartphone.

On the other hand, there have been persistent rumors over the years that shortages make ownership of the iPhone an early privilege, and buyers who may not have wanted one want it all the more. And a product that runs out so quickly can only be one that is ridiculously successful.