Rumor Raises Number of iPhone Manufacturing Contracts to 17 Million

Yesterday morning, Forbes reported a rumor in a local Taiwanese newspaper claiming that Taiwan's Quanta Computer has received an order to build 5 million Apple (AAPL) iPhones with deliveries starting in September. If we add that to Hon Hai's rumored 12 million iPhone contracts, that brings us up to 17 million contracted through 2008, or nearly double Steve Jobs' desire to grab 1% of the global cell phone market.

Our speculation: this makes a ton of sense to us. It's not that Hon Hai isn't doing a great job manufacturing iPhones (at least so far as we know), but rather that Apple is planning for strong holiday demand and ramping up manufacturing capacity to serve it. No matter how good your manufacturing partner is, there are always unexpected glitches in production, so having multiple manufacturers reduces supply risk.

Full disclosure: the author owns Apple shares at the time of writing.

Comments

[bradah]

If this is true and demand stays high......AAPL will see $200 within a year IMO.
However, I'll be setting my trailing-stop-limit-or... just in case there are any major dips.

Any thoughts on when there might be a 2-for-1 split?

2007 May 30 09:35 AM

[shagghie]

No need to split a stock like APPL. It is already a volatile stock, and splitting on encourages more. Right now what apple needs are serious investors that see the long term potential for its product and distribution lines.
Splitting a stock wouldn't help a bit. I'd rather see the stock go to 500 in 4-5 years, and still have a healthy P/E at that...

2007 Jun 06 12:48 PM