Still in short supply, iPhone 5 heads to India then China

The iPhone 5 may be fresh out of stock almost everywhere, but Apple is continuing its plan to bring the device to more countries.

Apple's newest smartphone is reportedly set to go on sale in India on Nov. 2, according to a report in India's Economic Times on Friday. But it's not the only big country Apple's planning to launch in soon: on Apple's earnings call on Thursday, CEO Tim Cook told investors that the device would hit China sometime before the end of the year. That Apple plans to fill orders in those two populous countries –at the same time that it's still weeks behind fulfilling orders in the U.S. and elsewhere — leaves little hope that Apple will catch up on backorders anytime soon.

The Economic Times report claims that the iPhone 5 launch had been pushed back in India, but that Apple is beginning to stock iPhone 5 inventory at several retail partners in the country in time for a launch next week. "A November 2 launch is certain and the stock is expected to start arriving at the master distributors Redington India and Ingram Micro within next two to three days" and pre-ordering will kick off in the next day or so, according to unnamed sources quoted by the Times.

A month after launch the iPhone 5 is for sale in 31 countries. But the wait is three to four weeks for a new device at many carriers and retailers, including Apple itself.

There are two issues plaguing iPhone 5 supply: intense demand coupled with a tricky manufacturing and building process. The company sold 5 million of the phones the first weekend it was available, but could likely sell more if it wasn't having trouble getting them out of the factories in China. The builder of the iPhone 5, China's Foxconn, says it's the "most difficult device Foxconn has ever assembled." The complicated design reportedly requires extreme precision when it comes to assembly.

Even when asked directly, Cook refused to say on the earnings call yesterday whether Apple would bring its iPhone supply in balance with demand by the end of 2012, which coincides with the all-important holiday sales period:

I'm not projecting whether supply/demand will balance, I'm saying I'm confident we'll be able to supply quite a few [iPhone 5 units] during the quarter. But I can't tell when that balance occurs, i can't say. Demand is very robust.

That answer was certainly not a "yes." The holidays plus India coming on board will be one challenge, but China is an even bigger beast. The country and its surrounding region represented 15 percent of Apple's revenue in the last fiscal year, or about $24 billion. Apple's products are in extremely high demand there — this is the country, after all, in which customers rioted and threw eggs at an Apple Store when it didn't open on time for iPhone 4S sales earlier this year.

Apple has repeatedly reminded us that this is the company's fastest rollout of a product yet. But that rollout hasn't been without problems that could potentially sour customers on the brand if forced to wait weeks or months for something they've paid for. Granted, having outsize demand for your latest product is a problem most companies would kill to have.

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Original Page: http://gigaom.com/apple/still-in-short-supply-iphone-5-heads-to-india-then-china/

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Regards,

Derik Chan