Apple’s Product Inventory is Getting Better, But You Still Can’t Stock Up on iPhones

From almost the very beginning of the novel coronavirus outbreak, it seemed clear that it was going to have an impact on Apple’s massive Chinese supply chain, and we saw the results of that as AirPods Pro quickly became scarce, along with supplies of various iPhone models.

This was an outcome to be expected as factories and Apple Stores closed and iPhone sales plummeted in China, and even after the Chinese government began allowing major plants like Foxconn to reopen, it still took time before workers started showing up again.

By late February, however, Apple CEO Tim Cook maintained that China was ”getting the coronavirus under control” and it seems that we’re beginning to see the fruits of that as inventory of some of Apple’s most popular products are slowly returning back to their more typical levels.

Lead Times Slowly Getting Better

According to a new report by analyst Gene Munster of Loup Ventures, who has been tracking lead times of four key Apple products since last month, supply has been steadily improving over the past two weeks.

As of March 17, the iPhone, which Munster notes accounts for around 52% of Apple’s revenue, now has a lead time for the 64GB iPhone 11 models of 2.0 days, as compared to a peak fo 6.7 days on March 4. Similarly, AirPods Pro and second-generation AirPods have reached an average of 7.4 days as compared to 10.6 days.

These numbers still aren’t great compared to the products actually being in warehouses ready to go, but they show a trend that things are getting better and that Apple should soon be able to keep up with demand — at least as well as it usually can.

However, Munster also notes that it’s “impossible to know” whether lead times have improved due to better supply or are simply a result of Apple products being in lower demand as the company shutters its stores worldwide. Munster guesses that most of the improvement is coming from the former, however.

Our guess is the majority of the lower lead times are related to the restart of production in China, and a minority of the improvement is from softening global demand.

After all, the main factor impacting these lead times has been the closure of almost all of Apple’s Chinese supply chain, and the supply curves seem to follow those dates very closely. By comparison, while the closure of Apple’s retail stores will weaken demand slightly, the products are still sold by other retailers, many of whom remain open even in the midst of the COVID-19 pandemic, not to mention Apple’s own online store.

Controlling Supply and Demand

Meanwhile, it seems that Apple wants to make sure that there are enough of its products to go around for everybody in the midst of these challenges. A separate report by CNBC notes that Apple has begun limiting the number of iPhones that can be purchased by any one customer to “two devices per model per person” with similar limits being applied to the new iPad Pro and MacBook Air models announced this week.

The iPhone restriction applies across all current models from the iPhone 8 to the iPhone 11 Pro Max, but it’s being applied to each specific model, so a customer wouldn’t be prevented from buying two iPhone 11 devices and another two of the iPhone 11 Pro.

While the iPhone and iPad Pro are limited to two devices per customer, the limits for the new MacBook Air and Mac mini are five per customer. Apple’s AirPods Pro also seem to be restricted to two devices per customer, although there are no limits on the second-generation AirPods, nor on older iPad models. These limits aren’t noted anywhere on Apple’s website, but they are being enforced during the checkout process.

While the move probably won’t affect too many customers, as CNBC notes there are legitimate reasons why some may want to purchase more than one of the same device, such as software developers doing testing or small businesses purchasing them for staff (the limits likely won’t apply to larger companies, which usually don’t purchase their products directly from the Apple store).

In addition to ensuring that Apple maintains enough inventory for customers, it’s also likely that the company wants to prevent the kind of profiteering that may come at a time like this. With Apple’s physical retail stores closed around the world right now, it’s conceivably possible that unscrupulous resellers could purchase up large quantities in order to sell them for a profit in areas where they’re otherwise unavailable or difficult to obtain for other reasons.

This isn’t the first time that Apple has enforced purchasing limits on some of its products, and in fact the company makes it clear on its Retail Store Purchase Policies page that it reserves the right to do so from time to time.

Comment

Given the popularity and/or supply constraints of some of our products, Apple may have to limit the number of products available for purchase. Trust us, we’re building them as fast as we can.

In fact, back in the days when Apple used to roll out its iPhone launches more slowly across different countries, it was commonplace for customers to be limited to purchasing only two iPhones, with Apple going so far as to request ID from buyers to enforce these limits. Grey market resellers still found ways around this — fake “customers” were often paid to stand in line and buy products — but Apple’s goal in those days was ultimately the same as it is now, to preserve stock for legitimate customers rather than allowing it to be gobbled up by those trying to take advantage of scarcity.