Why Apple, Inc.'s iPhone 6 Could Be Scarce at Launch


iPhone 6 mockups. Source: 9to5Mac.

Supply chain bottlenecks and inventory shortages are fairly normal occurrences for Apple . That storyline is nothing new for the Mac maker as it continues to pursue innovative new manufacturing processes or industrial designs in the quest for ever thinner and lighter devices.

Suppliers are "scrambling"
On Friday, Reuters reported that Apple's iPhone 6 could be running into some component shortages related to the display. Sources say that Apple was hoping to move from two layers of backlight film to one, which would allow for a thinner design.

But using one layer wasn't bright enough, so Apple reportedly had to go with the standard two-layer design. That change has cost the company valuable time throughout the summer, and suppliers are now "scrambling" to produce enough units ahead of the expected September launch. The downstream effects aren't certain though, and the issue may or may not affect Apple's launch timeline or how many it can produce ahead of launch.

Even if the iPhone 6 is scarce at launch, consumers are used to possibly having to wait around to get their hands on the latest iPhones.

A trip down memory lane
This situation is extremely common for Apple. It seems like every year, some crucial ingredient faces low yields or otherwise limits Apple's ability to produce enough to meet demand.

In 2012, it was the iPhone 5's in-cell touch display . That same year, Apple began using friction-stir welding , normally used in industrial aerospace applications, to make thinner iMacs. That led to significant iMac shortages, as Apple had introduced the new desktop months before it could begin shipping. That was the only quarter since 2005 that Mac unit shipments underperformed the broader PC market.

Last year, Touch ID sensor yields were reportedly low, which held back iPhone 5s sales. That's also one reason why Touch ID was not included in any 2013 iPad models. As yields have improved, the fingerprint technology is now expected in Apple's tablets this year. On top of that, Apple misjudged product mix demand, expecting more demand for the iPhone 5c. The company had to reallocate capacity to the iPhone 5s once it realized this, which also took some time.

The iPad Mini with Retina display was also expected to see some shortages last year, in part because Apple was trying to avoid buying panels from Samsung. At the last minute, Apple decided to bite the bullet and use Retina panels from its South Korean frenemy in order to improve supply.

All's not lost
Previous reports have suggested that Apple is preparing for an utterly massive iPhone 6 launch, ordering 70 million to 80 million units from its suppliers. Hopefully, this reported backlight issue doesn't threaten the magnitude of the launch.

The good news is that investors aren't fazed by the possibility of iPhone 6 supply constraints, with shares continuing to march higher. Investors have seen this same thing play out time and time again, and the important thing is that Apple customers are so loyal that delayed sales related to constraints aren't lost sales.

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The article Why Apple, Inc.'s iPhone 6 Could Be Scarce at Launch originally appeared on Fool.com.

Evan Niu, CFA owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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This article appears in: Investing , Stocks

Referenced Stocks: AAPL

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