Telecom & Wireless

As Apple iPhone 5S Wait Time Drops to Three Days, a Demand Problem?

When Apple Inc. (NASDAQ: AAPL) released the iPhone 5S, the time buyers had to wait to get new phones lasted as long as two weeks. The figure has dropped as low as three days. Apple is not telling whether the change is based on supply or demand.

Most analysis of the iPhone 5S claims that the smartphone has been a runaway success, while the new iPhone C has not. Apple, based on the remarkable intelligence of its management, fired up suppliers as fast as it could to meet the demand, obviously. Or, it left them alone if it did not need the phones.

An alternate theory is that Apple has always manipulated supply and demand. It was a trick Steve Jobs played well. Make the consumer believe that demand is great by constraining supply. He created a hunger by forcing people to wait in lines, and then wait online or at the stores of partners like AT&T Inc. (NYSE: T). He risked that some people would walk away and not buy the phone, or buy an alternative phone. Current Apple management may have decided to keep that tradition.

But Apple has a problem with playing the supply game now. Phones like the Samsung Galaxy are considered as good as or better than the iPhone. If customers cannot get an iPhone, they have an alternative. Jobs did not have to face that.

Of course, the biggest challenge Apple faces has nothing to do with the Jobs trick or constraints in supply. It is that the three-day wait for the iPhone is a sea change. People no longer rush to get the phone. When they can buy the Samsung, do they decide to wait for the iPhone 6? Apple will not say, but its next round of earnings will. In the meantime, it only takes three days to get an iPhone. Where are the lines for that?

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