Lack of 5G Apparently Not Deal-Killer for iPhone 11, as Apple Reportedly Boosts Production
Reports of unexpectedly high demand for the iPhone 11 were borne out Saturday in New York when we canvassed stores in search of the iPhone 11 Pro.
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At the West 14th Street Apple store, we were able to play with demo models of the three series 11 iPhones but were told we’d have to join a line of more than 30 customers hoping to score one from dwindling inventory. A screen shot of other Apple Store locations in the New York area showed the model we were looking for -- a 256 GB iPhone Pro in midnight green was sold out in six locations -- and supplies were in low single-digit in three more. The saleswoman cautioned that a yellow icon with an exclamation point next to stores likely meant “by the time you’d get there, they’d be gone.”
We tried a Verizon Wireless authorized retailer, where the only iPhone 11s in stock were waiting for customer pickup. We were told there we could order the 11 Pro and pick it up in six days. We called a Verizon company store and were told the green version of the 11 Pro would be back in stock in November. That store only had the base 11 model in stock, opposite of what larger trends showed.
Nikkei reported last week Apple told suppliers to boost production of the 11 series by up to 10 percent, or 8 million units, on “unexpectedly higher demand.” Nikkei said the surge in orders was largely due to customer preference for the entry-level 11 model, starting at $699 -- with dual cameras, not the three of the higher two models -- and that Apple had slightly revised down orders for the flagship Pro Max, starting at $1,099. Shortages in New York focused on the higher-end models, we found.
Seeking Alpha analyst Bill Maurer questioned whether Apple is boosting production to get more phones into stores before Dec. 15, when Section 301 List 4B tariffs are to take effect on smartphones and other products. Other factors could be in play, too, Maurer said Monday, noting Apple's initial production run didn't necessarily account for one less model being sold this year. Apple didn’t respond to questions.
Before Apple's Sept. 10 launch of the iPhone 11 trio, analysts predicted little customer interest in the latest series of iPhones because it was widely reported the handsets wouldn't be 5G-capable (see 1909090016). Bluesea Research said then the rollout of new 5G models by other manufacturers and associated marketing “can reduce the desire to upgrade by existing Apple customers in this cycle,” along with the expectation that Apple’s 5G iPhone will come next year.