June Quarter iPad Unit Sales (Archive)

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    Posted: 13 May 2011 01:17 AM #16

    Big picture question.  What is the ballpark ?

    Low estimate: 7 million or so ?
    Highest : 10 m.

    Any dissenters ?  Does anyone believe the story of iPad parts shortages… Such that it would cause sales to be below, say, 7.5 million ?

         
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    Posted: 13 May 2011 01:34 AM #17

    I love (as in HATE!) the iPad parts shortage rumors that Tim Cook put to bed a few weeks ago.

    The world we live in…or is it, the people who live in the world we live in.

    I don’t see iPad 2 as ever being as big as the iPhone market despite the very fast start.  8 million plus sold in fiscal Q3 would be just fine.  I doubt the competition could manage half that sold.

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  • Posted: 13 May 2011 02:12 AM #18

    Mav - 13 May 2011 04:34 AM

    I love (as in HATE!) the iPad parts shortage rumors that Tim Cook put to bed a few weeks ago.

    The world we live in…or is it, the people who live in the world we live in.

    I don’t see iPad 2 as ever being as big as the iPhone market despite the very fast start.  8 million plus sold in fiscal Q3 would be just fine.  I doubt the competition could manage half that sold.

    What competition?

         
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    Posted: 13 May 2011 02:33 AM #19

    You know.  The tablets with an app store that has…maybe 500 apps?

    Lack of competition aside DT, what’s your thoughts on the Digitimes vs. Tim Cook fight?  Who’s right?  That AAPL may have traded down on the the weakest kind of rumors is a testament to the intelligence of humanity.

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    Posted: 13 May 2011 02:45 AM #20

    C’mon now, Robert. <g> We can show at least a little respect for Moto, Sammy & ViewSonic. They’re doing the best they can. Maybe Xoom and the 7” Tab are dead in the water, but I’m sure the channel will be stuffed with a good number of 10” Tabs for the month of June. Throw in all those no-name sub-$200 clones and I’m sure the research firms can justify 1 or 2 million shipped for the current quarter.

    Mav, who has 500 tablet-optimized apps? You might get to 200 Honeycomb apps if you count widgets & wallpapers.

         
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    Posted: 13 May 2011 02:51 AM #21

    I’m doing Android Market the same favor as Steve Jobs did when Honeycomb had 16 apps. 

    I ran a search for “Honeycomb” and got 450 hits.  wink

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  • Posted: 13 May 2011 03:21 AM #22

    Drew Bear - 13 May 2011 05:45 AM

    C’mon now, Robert. <g> We can show at least a little respect for Moto, Sammy & ViewSonic. They’re doing the best they can. Maybe Xoom and the 7” Tab are dead in the water, but I’m sure the channel will be stuffed with a good number of 10” Tabs for the month of June. Throw in all those no-name sub-$200 clones and I’m sure the research firms can justify 1 or 2 million shipped for the current quarter.

    Mav, who has 500 tablet-optimized apps? You might get to 200 Honeycomb apps if you count widgets & wallpapers.

    As I said: What competition?

    Ship all the product you want, but reorders are the matter that counts.

         
  • Posted: 13 May 2011 03:31 AM #23

    Have you all seen the reports from China about supply chain constraints?

    http://www.digitimes.com/news/a20110511PD216.html

    There are some interesting details about the inability to get the new Foxconn- Chengdu manufacturing plant ramped up due to shortages of personnel and materials.  The result may be that production quantities may be constrained to that which can be produced at the Shenzen plant.

    DigiTimes has had a spotty record in the past with the accuracy of their Apple production “news” and “rumors”, but this data does seem plausible.

    If this info were all true, how would this affect your estimates of iPad2 build quantities for the June quarter?

         
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    Posted: 13 May 2011 03:37 AM #24

    Like I said: who are gonna believe?  Tim Cook or Digitimes?

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  • Posted: 13 May 2011 04:33 AM #25

    What if the ability to reach $26B+ comes more from the iPhone blowing past expectations (again), and the iPad2 remains constrained in production quantity? The iPhone4 has a much more mature manufacturing history, and arguably can ramp up in production faster/easier because of its maturity. I don’t see the DigiTimes article as necessarily refuting TC’s statements, but perhaps tempering the exuberance that we all have for the iPad2’s actual production numbers.

    I think Cook left a lot of room for ambiguity and uncertainty as to the potential for future supply disruptions as fallout from the Japan disaster (no pun intended) continues to unfold.

    In reference to Q’s about the impact of the Japanese Tragedy during Q&A:
    (COO) We did not have any supply or cost impact in our fiscal Q2 as a result of the tragedy
    (COO) We currently do not anticipate any material supply or cost impact in our fiscal Q3

    In the first statement, it was merely pointing out that the events in Japan happened too close to the reporting deadline to have a material impact on the numbers.

    In the second statement, “currently” gives wiggle room for conditions to change or new information to emerge since April 20.
    “material supply” - what does that mean? Does it imply there are enough parts for Q3 and the cause of any moderation in iPad2 production ramp up would be elsewhere (such as personnel shortages, or inability to get second factory in Chengdu on line at full capacity?), or, could it be construed that the shortages in materials might not hit in full effect until Q4?

    I know this is all like trying to read tea leaves, and anyone’s guess is probably as good as another when trying to parse words like this, but I’m trying to put into context how and why everyone’s iPad2 numbers for the recent quarter were all below reality and extrapolate that forward to the possibility that we may be disappointed again for iPad2 numbers in the next quarterly report. (As much as I want to see them fly away higher).

    I work at a school district and have ordered some iPad2’s for the district on April 1st, and they still have not arrived. I suspect education orders may not be given as high priority as retail orders, but it is now six weeks and the order still has not been fullfilled. I just checked and it is now estimating the order to ship next week - which would mean seven weeks from order till fulfillment.

         
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    Posted: 13 May 2011 04:45 AM #26

    Tovar, forgive me if I’m being presumptuous but maybe you haven’t listened in on as many CCs as I have (at least 25+ as I recall, maybe 35+).  Apple has a very, very practiced style of communicating during CCs.  They are consistent and they are consistently cautious-sounding.  This is as definitive a statement as you will get from Cook/Apple that no, Japan will not have any impact (cost/supply wise, rev impact is $200M) in fiscal Q3.  Cook can’t say “not a chance” because that’s the nature of Apple conservatism and SEC overzealousness in the wrong places.  He did say “we’re not sure about Q4.”  You shouldn’t look any closer than fiscal Q4 for supply chain concerns.

    We agree on avoiding iPad overenthusiasm.  I was on the low end of all estimates and still overshot.  But I strongly disapprove of taking shady rumor sources over a person who may be the best supply chain guru that ever lived.

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  • Posted: 13 May 2011 04:53 AM #27

    One angle I would be curious to explore is the effect of production ramp up speed and the sheer quantities of gadgets being produced and vs. the timeline for rolling out a new product - such as the iPhone 5.

    As production numbers get larger and larger - exponentially, it requires a longer time to ramp up production to meet those numbers. Are we approaching a point where 12 months is not long enough time for the ramp to catch up with demand before the next iteration of the product is released ?

    Is there some sort of “law of large numbers” which would indicate that the larger your production numbers, the longer your cycle time needs to be before you bring out the next generation device? It takes time to retool a production line, and to train employees on the new manufacturing/assembling techniques, and this time is finite and can’t be accelerated. Yet, we have had a pattern where Apple releases iPhones on an annual basis.

    IPhone4’s take months before appearing in certain other countries/markets, and so it could be half a year or more after launch before some of the other markets begin to receive their first product. That doesn’t leave much production time to fill the demand for these newly opened “markets” before the next generation device comes out.

    Because of the sheer popularity of Apple’s products, could they be forced to extend the production run just to meet the initial demand for the existing generation product, before they release the next generation product?

    I would anticipate that this same dynamic would apply to iPad production as well. And one problem with the switch from one generation’s product to the next is the loss of manufacturing efficiency during the transition period which we experienced in the iPad1-iPad2 transition.  I suppose with two manufacturing lines (Chengdu and Shenzen), they could keep the former generation producing at full capacity at one plant as they make the switchover to the next generation product at the other plant to ensure that at least one plant is operating at peak efficiency to boost production numbers. Then keep manufacturing the older generation devices for the later opening markets until the other plant has hit its stride with producing the new generation device.

         
  • Posted: 13 May 2011 05:16 AM #28

    @Tovar

    Is there some sort of ?law of large numbers? which would indicate that the larger your production numbers, the longer your cycle time needs to be before you bring out the next generation device? It takes time to retool a production line, and to train employees on the new manufacturing/assembling techniques, and this time is finite and can?t be accelerated. Yet, we have had a pattern where Apple releases iPhones on an annual basis.

    Designing the next generation device and ramping up production are not the same business…. But the time required for both is not a function of the anticipated production volume.
    the rational of your post looks flawed to me.

         
  • Posted: 13 May 2011 06:00 AM #29

    I’m not first hand experienced with this of course, but the process presumably goes: 1. start up and debug the first line producing the new product 2. rapidly transition other product lines. 3. Run down channel inventory of old model; switch over to new model. Suppliers will be doing the same sort of thing at the same time.

    Apple is already doing transitions like this at run rates of millions per month. I can’t see a big reason for tens of millions to take much longer. Apple’s biggest cash commitment is to suppliers, enabling them to build whatever production facilities it takes, without major risk or cashflow implications.

    In terms of the total process from conception to mass production, there must already be 3 generations in development at the same time (iphone 5, iPhone 6 etc); customers only see the shipping products.

         
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    Posted: 13 May 2011 10:34 AM #30

    Tovar - 13 May 2011 07:53 AM

    One angle I would be curious to explore is the effect of production ramp up speed and the sheer quantities of gadgets being produced and vs. the timeline for rolling out a new product - such as the iPhone 5.

    As production numbers get larger and larger - exponentially, it requires a longer time to ramp up production to meet those numbers. Are we approaching a point where 12 months is not long enough time for the ramp to catch up with demand before the next iteration of the product is released ?

    Is there some sort of “law of large numbers” which would indicate that the larger your production numbers, the longer your cycle time needs to be before you bring out the next generation device? It takes time to retool a production line, and to train employees on the new manufacturing/assembling techniques, and this time is finite and can’t be accelerated. Yet, we have had a pattern where Apple releases iPhones on an annual basis.

    IPhone4’s take months before appearing in certain other countries/markets, and so it could be half a year or more after launch before some of the other markets begin to receive their first product. That doesn’t leave much production time to fill the demand for these newly opened “markets” before the next generation device comes out.

    Because of the sheer popularity of Apple’s products, could they be forced to extend the production run just to meet the initial demand for the existing generation product, before they release the next generation product?

    I would anticipate that this same dynamic would apply to iPad production as well. And one problem with the switch from one generation’s product to the next is the loss of manufacturing efficiency during the transition period which we experienced in the iPad1-iPad2 transition.  I suppose with two manufacturing lines (Chengdu and Shenzen), they could keep the former generation producing at full capacity at one plant as they make the switchover to the next generation product at the other plant to ensure that at least one plant is operating at peak efficiency to boost production numbers. Then keep manufacturing the older generation devices for the later opening markets until the other plant has hit its stride with producing the new generation device.

    If you want to further your knowledge here are couple detailed research papers on production ramp that I think cover most of the issues International product transfer and production ramp-up; a case study from the data storage industry and Learning and Process improvement during production ramp-up