Customers line up in the early hours on Friday, September 21 at the AT&T store in Glendale, California, hoping to get a new iPhone 5. Apple wound up selling million, but Wall Street didn't care.
Apple absolutely killed it this weekend, selling over five million iPhones in three days. But for Wall Street, it wasn't enough. The company's stock, which had risen above $700 a share, fell to about $690 today.
Expectations for iPhone 5 sales may have gotten out of hand. They fell a million shy of what some analysts seemed to think was possible.
Worse, as the Wall Street Journal suggests, Apple may have hit a sort of "speed limit" on production:
Another theory is that Apple may have reached a theoretical limit to how many products can be produced in a specific window of time. Tom Dinges, an analyst at IHS iSuppli, said Apple historically began production of new iPhones in mid-August, a little more than a month from the release date. But, he said, the company may have shortened that production schedule to control information leaks that could come from suppliers.
"For the major opening weekend, we're close to the limit," Mr. Dinges said. "Unless they're willing to widen the manufacturing window, maybe we have seen" the limit for how many units Apple can deliver without more production lines.
Mr. Dinges noted that Apple would need to have roughly half a million iPhones produced per day at a minimum to meet some analyst expectations of 50 million iPhones to be sold during the holiday quarter.
There was some concern that a riot at a Foxconn factory in China would take some iPhone production offline, but Foxconn says that any interruptions will be temporary (this is all still troubling, as Foxconn earlier saw a wave of suicides). As I've written, Foxconn pretty much has to march to Apple's tune, even as the tech giant forces down profit margins for its Chinese supplier.