Friday, 31 August 2012 11:12

Sharp Screen Shortage Will Help Apple Build Hype And Demand For The iPhone 5

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Although not surprising in the least, there are numerous articles expressing concern and shock at the fact that Sharp, a supplier of display panels to Apple, is having a rough time keeping its commitments. Wed talked about some of the moves Sharp has taken in the past few months to keep investors happy; including actually giving details on the production cycle dates. This is something that in the past (under Steve Jobs) would never have happened. Now with Cook at the reins things are different and many companies that are facing financial troubles are using their connection to Apple as a flag to either entice investors or to keep them.

The big question now is; will the delays at Sharp hurt the sales and impact of the iPhone 5 that is supposed to be launched next month? We actually doubt that it will. One of the reasons that Apple has traditionally done very well in initial sales is demand. If they can get demand up (through compelling features or rumors of shortages) they are doing well. If you look back over just about every iPhone/iPad launch you will find a rumor about possible supply issues. These rumors allow Apple to launch the products in stages and claim inventory issues and massive demand when they report the limited amount of information they do.

If anything not being able to get the next iDevice is likely increase interest in the product and generate the feeding frenzy that Apple wants and builds with their marketing hype. This public supply issue is actually good news for Apple as there is not much that is really going to be new about the next iPhone. You are getting features that have been on the market for more than two years in a device that is supposed to be cutting edge. Many analysts are already questioning the success of Apple’s next product even with their recent positive verdict in the US court system. Apple has to begin to at least try to innovate to make their products desirable to the public. As was pointed out in court Apple knows that many people buy their competitors’ products because of the larger screens, better specifications and also to get the latest and greatest features (according to Apple’s own internal marketing research).  The problem is that they have not managed to do this since the first iPhone; each new generation has been a minor refresh on the old product.

Apple cannot rely on the court ruling or product bans of Samsung devices either. As one expert put it; a consumer that does not buy a Samsung phone does not automatically equal an iPhone sale. So while some may tell you that this shortage will hurt Apple sales, it really will help them to build demand and hype which the current list of rumored features has failed to do.
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