I’ve been reading a significant amount of backlash agains the iPad mini event focusing specifically on the lamentable lack of the “one more thing” moments of old. The typical banter has something to do with leaks coming from places that Apple has a hard time monitoring (China), and that it does everything it can to keep things hush hush in a world in which money talks, and loudly. My main point of contention with this sentiment is that it implies that Apple can’t keep anymore secrets about its new products.
I think that’s a silly idea.
Consider, for a moment, the scale of manufacturing that has to be brought to bear in order to manufacture products for Apple on the scale we are currently seeing. It has to be massive, and requires the coordinated efforts of millions of people, literally. From product inception, design, fabrication, and manufacture, there are literally millions of people involved, taking care of everything from the actual design and sourcing of raw materials to the shipping to your doorstep. Truth be told, their job isn’t even over when you have the product in your hands; they still have to support it and continue developing new software. The human life energy devoted to the manufacture and support of a single iPad is immense.
As such, consider the original iPhone, first introduced in January of 2007, but released in June of the same year. That’s a 6-month gap from introduction to purchase. In contrast, iPhone 5 was revealed on September 12, went on pre-sale two days later, and was available for retail purchase one full week after the introduction, on September 19th. The full implication of that is that Apple’s manufacturing machine has to be at work for months before the device truly sees the light of day. In short, more human beings (see above) are aware the device exists for more time before the general public can purchase the device.
With the original iPhone, Apple had the luxury of producing prototypes and testing them in relative seclusion. Apple no longer has that luxury because it works on some of the tightest schedules a person can conceive of.
Think about it; If Apple wanted to prototype a totally new product using in-house fabrication today, they could do it. They could show a working device to a room full of awed spectators who had no idea that such a thing existed, but they wouldn’t be able to put it in your hands until months later, and that isn’t something that Apple wants to do–they want you to make a decision and strike while the iron is hot.
So when you’re done watching the reveal of a new Apple products from another Apple device that’s barely a month old, remember that things weren’t always this way. You can’t manufacture your cake and be surprised by it, too.
Amidst growing concerns that Foxconn’s factories won’t be able to keep up with demand, Apple’s stock is dropping rapidly.
A slowdown in Foxconn’s manufacturing may have a negative impact on its future supply of Apple products. According to JMP Securities, “(Foxconn) growth decelerated from 84% (year over year) in the month of December to 37% in January and then again to 26% in February.”
The reasons for this deceleration are not known, but the slowdown is concerning enough that JMP has downgraded its outlook on Apple from “Market Outperform” to “Market Perform.” This unfavorable assessment is not based on the quality of Apple’s products, but on Foxconn’s ability to deliver Apple products in a timely manner.
This comes in the midst of a practically complete and total sellout of Apple’s new iPad 2, which is a follow-up to the most quickly-adopted consumer device ever made, and Barrons’ recent price target update of $450.00.
BTIG Research analyst Walter Piecyk today raised his price target on shares ofApple (AAPL) to $450 from $375, concluding that the iPad will probably generate $24 billion in revenue this calendar year, which is $4 billion more than he’d originally expected, and which, as he puts it, “would represent more than 20% of revenue for a product that is less than two years old.”
I am amazed that the stock is taking a hit amidst the Foxconn news, but I can see why it’s important for the business to actually put product in the hands of folks who want it. For anyone who’s still on the fence, it’s probably a good time to start. After all, if you’d have gotten into the game back in 1997, you’d be able to buy lots and lots of iPads. (via)