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Apple is Pleased with FOXConn’s 100 Production Lines producing 500,000 iPhone 5S every DAY 7-days a week or 3,500,000 iPhones/Week, equating to 15,208,334 iPhones/Month. Here is the Back-Story. ๐ŸŽ๐Ÿ“ฒ๐ŸŽ๐Ÿ“ฒ๐ŸŽ๐Ÿ“ฒ๐ŸŽ๐Ÿ“ฒ๐ŸŽ

November 27, 2013

๐ŸŽ Apple is Pleased with FOXConn’s 100 Production Lines producing 500,000 iPhone 5S every DAY 7-days a week or 3,500,000 iPhones/Week, equating to 15,208,334 iPhones/Month. Here is the Back-Story. Apple’s manufacturing partner, Foxconn, is pumping out a record number of new iPhones, Lorraine Luk at the Wall Street Journal reported.

๐ŸŽ A Foxconn executive tells Luk, "We have been churning out about 500,000 iPhone 5Ss everyday, the highest daily output ever."

๐ŸŽ The FOXconn executive also says that Foxconn has 600 employees working on each iPhone 5S production line, which is higher than the normal 500 employees per line on the iPhone 5C for example. "Although the market had concerns over demand for the new iPhone before its launch, our Zhengzhou siteโ€™s production capacity for iPhones has continued to grow over the past two years," says FOXconn.

๐ŸŽ Extrapolating these numbers would indicate that each of the 100 production lines, containing 600 employees per production line, delivers 5,000 iPhone 5S per day. Since the iPhone 5S is more complex in assembly, likely due to the Finger-Print Identification components among other complexities.

๐ŸŽ Foxconn has ramped production of the 5S, and cut-back production of Apple’s new iPhone 5C in accordance with the "balancing act" that Apple Tim Cook’s team manages daily. Remember Tim Cook has been and remains Apple’s "Master of the Supply Chain." Editorially speaking, there has been a lot of chatter about how terrible the 5C is selling.

๐ŸŽ Remember on the first launch Week of the New iPhone 5S/5C, for the 9 Million units sold in only 3 DAYS, 1/3rd of them were the iPhone 5C. Therefore 3 Million iPhone 5C were sold, about 1.0 Million 5C/Day, is a Significant figure. For its Launch weekend, September, 2013, and subsequent weeks, Apple could not accurately predict the ratio of 5S/5C’s. Weeks later, Apple continues to re-balance the 5S : 5C production levels to meet demands globally. Apple is a Master of keeping Inventory Turns very fast, like 90x/year, so that iPhone inventories don’t fill retail shelves.

๐ŸŽ As a result, the wait-time for a 5S has fallen significantly, and is now generally in-stock for retailers. Apple analyst Gene Munster says 90% of the iPhone 5S models are in stock at U.S. stores.

๐ŸŽ As Tim Cook warned at his recent Investor Conference Calls, analysts should not extrapolate based on only one fact-pattern. The fact that the 5C production was trimmed, was not a signal that 5C’s were not selling, as selling a Million/Day iPhone 5C is not terrible for sure. However, since this was Apple’s first shot at releasing TWO iPhone Models on the same Day, balancing the production levels was a live experiment. Once demand-levels were established, then fine-tuning production levels is appropriate.

๐ŸŽ Also, in light of the information above with FOXconn’s production levels, and recalling that Apple desires to develop alternate Production Alternatives, so that it is not solely-dependent on FOXconn’s capabilities. Therefore if we hear of FOXconn production being trimmed, it may be a result of Apple testing one or more other Assemblers, taking the full-load off of FOXconn. It seems that the Market-Analysts get their "wires-crossed" and are a bit quick in making unwarranted assumptions.


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