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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: XoFruitCake who wrote (132588)	4/30/2012 5:59:46 PM
From: Cogito	Respond to of 213172

Fast rollout is a 2-edge sword. It distorted the data for subsequent quarter and hence it is very easy to overbuild inventory and end up with a situation where they may have to cut price to clear the inventory. They also pay a big upfront cost to build up the capacity for the launch and then has to pay to idle those capacity (and all the supplier too). I think Apple has very good visibility as far as near-term demand goes, and they run the tightest supply lines in the business. Their feed into inventory in Q2 was driven partly by the fact that they started the quarter below their target numbers, and also by the fact that they expanded their distribution channel during the quarter, ending up with more outlets at the end. If we were to see declining sales and a buildup of inventory quarter after quarter, it would be time to worry about that. By the time demand for the iPhone 4S slackens, manufacturing will already be ramping up for the iPhone 5. Tim Cook is the best operations guy in any business, anywhere. We don't have to worry about his not understanding the component markets, or not being able to manage manufacturing.