Apple analyst Ming-Chi Kuo suggested earlier this week that limited supply restrictions could cost the company as much as 15-20 million in iPhone 14 Pro sales. Not just temporarily, he argued, but permanently: most of those sales will “go away.”
He’s not the only one to suggest this, and there are four arguments that can be made in support of the point of view – but I don’t buy any of them…
Let’s start with the facts, as best we can…
We know for sure that there is a huge gap between supply and demand for the iPhone 14 Pro. We know this because Apple said it, because Foxconn agreed, and because we can see it for ourselves, in the form of very visible disruption to production and very long wait times for orders. As early as mid-November, iPhone 14 Pro orders were showing delivery dates way too late for Christmas.
The exact size of the shortage is unknown – probably not even by Apple or Foxconn, because the situation is simply too volatile. We’ve seen production estimates drop by 6 million units on the low end, and 15-20 million units on the high end.
But whatever the exact number, there is no doubt that anyone who wants to get their hands on the iPhone 14 Pro within the next few weeks will struggle to do so. There is also no sign of any near-term improvement, and suggestions that the problems will continue into the new year also sound reasonable.
The argument that iPhone 14 Pro sales will “disappear”
But Kuo—who gave the most pessimistic estimate of lost production—went further. Not only was it a case of putting off sales until supply improved, but that, he noted bone From demand for the iPhone 14 Pro will “disappear”. Others have made similar arguments.
it’s not crazy There are four ways this could happen:
If I want X, and X is in short supply, I might decide instead to buy Y. This is the possibility firms fear when they are unable to meet current demand: they may lose out on those sales permanently, not just for now.
The deterioration of the economy
This is Ko’s argument. Both the United States and the United Kingdom are officially in recession (two consecutive quarters of negative GDP), and high inflation rates combined with wages lagging behind limit spending power around the world. If people can’t buy now, they may have a hard time buying later.
Christmas gift worker
This is an argument I’ve heard too. December 25th is a strict deadline for those who celebrate gift-giving. If someone cannot receive X by then, they may have to substitute Y.
Empty wallets, after Christmas
Finally, there is a noticeable tendency for people to overspend during the holidays, which makes money tight in January.
But I don’t buy that people won’t buy it
iPhone 14 Pro is the X in which there is no clear Y. If someone wants an iPhone, they want an iPhone, not an Android flagship. And if someone specifically wants a Pro model (as reviewers agree), the non-Pro iPhone 14 model isn’t an alternative either.
So I don’t buy that people will trade in the iPhone 14 Pro for something else, even if it’s a gift and it won’t be available on Christmas Day. I know that if someone were to buy me the iPhone I really want, I’d happily wait another week or two instead of giving me another one on the day.
I also can’t see recession or inflation having this kind of effect – losing “most” of 15-20m sales – in such a short timescale.
When and when people can’t get the iPhone they want, they may respond in a number of ways. They may place their order and wait. They may explore other suppliers, outside of Apple. As for gifts, they might be desperate enough to hit up eBay brokers. But what they are unlikely to do, in my opinion, is either to buy something else, or not to buy anything at all.
This is my opinion. Which one is yours? And if you are in this situation yourself, what is the solution? Please let us know in the comments.
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