Not Even These 2 Hiccups Can Hold Back the iPhone 5

The iPhone 5 has now officially launched. Analyst estimates for launch weekend sales reach as high as 10 million units, including the 2 million preorders that Apple (Nasdaq: AAPL  ) already booked. With the new model starting at $650 retail pricing, we're talking about potentially $6.5 billion in sales this weekend for the iPhone maker.

That being said, the company still saw some hiccups running up to the launch. Do investors have anything to be worried about?

The calendar year is not a baker's dozen, except in France
In France it's common for companies to pay a thirteenth month of salary, almost as if you were heading down to your local bagel shop and ordering up a baker's dozen. Apple does not adopt this practice in the country, and local labor unions that represent roughly 25% of Apple Store employees in the area made a number of demands of Cupertino, including the aforementioned baker's dozen year.

Union leader Thomas Bordage encouraged disgruntled employees that weren't happy with Apple's practices to protest at the popular Opera location in Paris on iPhone 5 launch day in order to have the greatest impact.

Opera Apple Store in Paris. Source: Apple.

Apple has nearly 1,000 employees for its retail stores in the region, and only about handful of protestors actually made it out to the demonstration. According to a Reuters report, most of the protestors were actually former workers of independent distributors that were shuttered amid competition from Apple's own stores. Only three of the demonstrators were Apple employees.

As far as iPhone 5 sales went, they were mostly uninhibited. The protests took place at a distance from the entrance and customers were still able to get in and get their hands on the device, although one buyer said it was "spoiling the party a little."

Apple is no stranger to bad press over labor practices, although the controversy in its Asian supply chain is much more of a concern than a couple hundred disgruntled employees. For context, in the U.S. Apple employs over 27,000 workers at its retail locations, compared to the 1,000 throughout France.

Mission impossible
According to The Wall Street Journal, the day before the release, Japanese carrier partners were burglarized and the thieves made off with nearly $100,000 worth of iPhone 5 units. Three retail stores of Apple's carrier partners were robbed, with varying quantities taken.

Local police said that a total of 191 units were stolen between the three robberies, causing some of the locations not to open on Friday as planned. Authorities believe the robberies were unrelated and not part of a grander scheme.

Stolen iPhones certainly can't spell good news for Apple, but ultimately we're talking about less than 200 units on a weekend that will be measured in millions. I don't think investors will be disappointed if Apple reports 0.0002 million units less than they were expecting.

Bigger fish to fry
Instead of these minor hiccups, investors should be more concerned with these two things that actually could hold back broader iPhone 5 supply: Qualcomm's (Nasdaq: QCOM  ) newest baseband chips and the new in-cell displays supplied by Sharp, Japan Display, and LG Display (NYSE: LPL  ) . Ripples throughout Apple's supply chain related to these technologies have much more potential to limit unit sales if crucial ingredients are hard to come by.

The company is already on the receiving end of major user backlash over its decision to ditch Google (Nasdaq: GOOG  ) Maps in favor of its own in-house offering, going as far as to issue a formal statement reassuring the masses that it will get better over time. Meanwhile, Big G quietly smirks on the sidelines.

The introduction of the iPhone 5 is an event Apple investors have been looking forward to for months. The stakes are high and the opportunity is huge, so to help investors understand this epic Apple event, we've just released an exclusive update dedicated to the iPhone 5 launch. By picking up a copy of our premium research report on Apple, you'll learn everything you need to know about the launch, and receive ongoing guidance as key news hits. Claim your copy today by clicking here now.

Evan Niu, CFA owns shares of Qualcomm and Apple. The Motley Fool owns shares of Apple, Google, and Qualcomm. Motley Fool newsletter services recommend Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2027198, ~/Articles/ArticleHandler.aspx, 8/22/2014 12:34:51 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement