This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Apple Facing the Great iPhone Shortage

SAN FRANCISCO -- Apple's (AAPL) flagship retail store in downtown San Francisco is usually filled with shoppers trying to get their hands on the company's latest products, including the iPhone.

That's a problem now. The best that buyers interested in the iPhone can do is play with the models on the floor.

A representative at the San Francisco store said they have run out of iPhones for sale and don't know when the next shipments are coming in.

The San Francisco store isn't the only outlet experiencing shortages. Apple's 8GB and 16GB iPhones are reportedly out of stock at most Apple retail stores in the U.S.

iPhone Shortage - The CTIA Reaction

Meanwhile, shoppers trying to get their hands on the iPhone at Apple's online store are being told it will take five to seven business days to ship the phones to them. Analysts say that response is equivalent to being out of stock. The phones reportedly are available at Apple stores in the U.K, France and Germany.

The sudden lack of availability of iPhones at Apple stores in the U.S. could mean the company is preparing to launch the 3G version of the device, two Wall Street analysts say.

The thinking is that Apple could be drawing down upon the current inventory of iPhones in preparation for the launch of a new product in a bid to get its latest models out into the stores and ensure that older phones don't end up cannibalizing sales of a newer version.

Shaw Wu, an analyst with American Technology Research, an independent research firm, says the iPhone is likely to undergo a product transition sometime in June and July, about a quarter earlier than expected.

Meanwhile, Toni Sacconaghi, an analyst at Bernstein Research, says in a research note that the current inventory shortage at Apple stores seems to be selective. Sacconaghi, whose firm makes a market in Apple shares, says Apple's partners continue to sell the products and the current versions of the iPhone are going strong in in Europe, which is viewed as a bigger market for 3G phones.

Sacconaghi says a more likely explanation is that the supply of iPhones to its partner AT&T (T) could have been slowed or disrupted in recent weeks by production difficulties, resulting from component shortages.

Two weeks ago, Sony Ericsson, a joint venture between Sony (SNE) and Ericsson (ERIC) reported that a component shortage contributed to its lower-than-expected sales last quarter. Sacconaghi says Apple could be facing similar issues.

A prolonged stock-out of the iPhones could hurt Apple badly. Sacconaghi says each week Apple's U.S. stores are out of stock will mean 20,000 to 40,000 units in lost sales.

It's a greater problem for Apple in the current quarter. For the March quarter, the average Apple store was out of stock for about a week or less, leading to a loss in sales of up to 20,000 units, he says.

Apple shareholders remained unconcerned as analysts debated reports of a widespread shortage in the availability of iPhones at Apple stores.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs