iPhone 7, iPhone 7 Plus Launches To Be Marred By Supply Constraints

Apple’s iPhone 7 and 7 Plus will go on sale on Friday, and hordes of customers are expected to line up to buy the device on its first day of availability. However, many of them will be left disappointed as they will have to return home empty-handed. Apple has reportedly made fewer devices than it did in previous years, and hence, it won’t be able to meet demand, reports Bloomberg.

Supply constraints to mar the launch

Apple said earlier this week that people flocking to its stores on Friday without placing a preorder for the device will not be able to buy them. The iPhone 7 Plus comes with a dual back-facing camera system, for which the company is running short of components, according to analysts.

An analyst at Creative Strategies, Ben Bajarin, said, “We had known for some time that dual lens parts would be constrained at launch, nobody across the board is shipping these components in volume. The fact that all iPhone 7 Plus models are constrained is a sign of the supply chain.”

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Apple markets the iPhone so well that it has become a ritual to see iPhone buyers waiting outside its stores to buy the latest handsets. However, expectations for the iPhone 7 line, which was unveiled last week in San Francisco, have been muted. This time the iPhone maker won’t disclose the initial weekend sales numbers for the new models, thus leaving analysts guessing at early demand.

Apple stock rising consistently

Meanwhile encouraging demand for Apple’s newest iPhone put the stock on a strong growth track, clobbering short-sellers who had bet against it. Late Wednesday, the company announced that it had sold out the initial quantities of the iPhone 7 Plus globally, pushing its stock further up.

Apple stock surged 12.9% over four days in April 2014 after the company increased its share buybacks and reported better-than-expected quarterly results. Also the credit for the gains in the Dow Jones Industrial Average this week goes entirely to Apple. If there had been no change in Apple this week from last Friday’s close, then the Dow on Thursday would have been down by 0.1% and wouldn’t have gained the 0.3% it has recorded, notes Reuters.

On Thursday, Apple shares closed up 3.4% at $115.57. Year to date, the stock is up almost 8%, while in the last year, it is up more than 1%. In the last five days, the stock is up almost 10%.