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  • bmw_654ci bmw_654ci Aug 4, 2009 3:34 PM Flag

    Kumar warns smartphones face a “looming supply/demand imbalance”

    There could be a lot more smartphones shipping this quarter and next. More than anyone is prepared to buy, writes Collins Stewart analyst Ashok Kumar in a note this morning. Kumar warns smartphones face a “looming supply/demand imbalance.” That’s because Motorola (MOT) and Palm (PALM) are ramping up their production of devices dramatically.

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    • That may be true but the IPhone is an exception. Everyone is buying it here in Atlanta. No contest between it and all the others..Have to stand in line to get it..

      • 1 Reply to lucky.ecv13
      • Yea, and some keep falling for the demand crises bs too while sitting on 2 million in inventory, roughly the same as the previous quarter but as long as they keep saying we can't make them fast enough the media mutts will keep printing it.

        Ben Reitzes - Barclays Capital

        Okay, thanks and with regard to the surge at the end of the quarter of iPhones, 5.2 million and you’re constrained on the 3GS, what is the inventory situation like? I mean, you were running at over a million, I believe, Tim, and how did you end the quarter on inventory? And how is the pent-up demand look though heading into the next one?

        Timothy D. Cook

        The iPhone channel inventory was flat sequentially, so it was approximately the same number from the beginning of the quarter and at the end of the quarter. And what that means obviously since we were selling a lot more units at the end, that we do not have a channel loaded with the number of units that we would like at this time and you can see that in terms of stock-outs on the 3GS.

        Ben Reitzes - Barclays Capital

        What’s that unit number, and then I’ll cede the floor here?

        Timothy D. Cook

        The unit number?

        Ben Reitzes - Barclays Capital

        Of inventory?

        Timothy D. Cook

        You know, consistent with what I’ve said before, you can do the math, but it’s about 1.83 million, just slightly over 1.8.

        Production for the quarter was in fact cut for both the old and new models from last quarter instead of increasing for the new 3gS.

        2. Recent downward adjustment by Apple to both new and existing iPhone build plans. ''Checks indicate that Apple recently cut back on the production of the new iPhone from an aggregate of 3.0 million to 2.5 million units, although it is still expected to be launched in late June; also we believe Apple has very recently lowered unit build forecast for the existing 3G iPhone by 15-20 percent.''

        Like Obama would say... Never waste a good crisis.

    • Kumar is FOS. Handset sales are down 40%. A minor subset called smartphones are growing share in the depressed cell phone market. It is no harder to ramp up a billion smartphones than a billion dumb phones and except the cost of the few gps, 3g RF, and added memory doesn't cost much more either. The same supply chain that supported sales before the recession and the decline in handsets sales are will support it today.

    • harold and kumar.. is he that joker?

    • Kumar has a major mistake in his premises: that this is a zero-sum game. The smartphone market is growing exponentially, so it is NOT a zero-sum game.

      However, his conclusion is correct: some vendors of "smartphones" will be shipping way more devices than customers will purchase. That's not because of a problem with market... it's a problem that their wares ROYALLY SUCK! The Apple iPhone is not amongst these. Expect them to ship a BUNDLE this Xmas.


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