Apple's iPhone Shortage? Just Clearing The Decks For 3G

Apple iPhone
Manuel Balce Ceneta
Apple iPhone

Here we go again: rumors swirling of iPhone shortages, supply constraints, manufacturing issues, and other sky-is-falling doomsday scenarios swirling around Apple and the product that should guide revenue and growth for the next generation.

All this when there may be a more simple explanation: Innovation and evolution continue in Cupertino, so why would you still be manufacturing older models that no one will buy when new versions are just over the horizon?

Here's the deal: several months back, sources told me that a 3G version of Apple's iPhone would be available by May or June based on what Asian manufacturing partners were gearing up for. Devices that would replace current iterations of the iPhone and a version that addresses one of the key criticisms of iPhone: that it's a Ferrari stuck in EDGE gridlock on AT&T's inferior data network.

This news has been making the rounds on the web since then. Now, we get word from Piper Jaffray's Gene Munster that a spot check of 20 Apple retail stores nationwide have no iPhones in stock. There are reports that lead times for ordering the devices from Apple online are between five and seven days.

So Apple shares take a hit based on this news because there's skittishness that Apple isn't merely clearing the decks of older inventory to make room for a new 3G version, but that something far more insidious is at work instead: manufacturing issues, supply problems, you know the drill.

Folks, we're in April. May is just around the corner. Same with June. Apple's worldwide developer conference is on June 9 in San Francisco. It stands to reason that if a new 3G iPhone is on the way, then why in the world would Apple continue to manufacture and then stock older versions that would just collect dust on store shelves?

I would argue that the supply constraints are actually good news; that Apple won't be left with a huge amount of unsold inventory as it makes the transition to 3G. I was in Vegas the last couple of days, listening to all the rumors and news about new 3G phones on the way. The Samsung Instinct from Sprintwas cool; word that Research in Motion's new BlackBerry will also go 3G was the talk of the town. Apple's iPhone must go there too. And it will. Soon. Maybe even sooner than we think.

But to suggest that a supply shortage now is an indication of deep problems with Apple's iPhone misses the point of what's happening throughout the sector. The wildcard is that Apple curtails production of older iPhones and then is unable to meet crushing demand for the new 3G version. That could be a problem, but that's a long shot.

Today seems like another case of sell first, and ask questions later.

Questions? Comments?