April 1st has historically been a significant day for Apple releases, so this would tie in with the theory that the iPhone is about to get bumped.
I can't work out how though ! A straight price drop doesn't make sense because you don't need new inventory for that. Bumping the models to 16Gb and 32Gb doesn't make sense either, because you'd want to keep the current stock of 16Gb models high. Flash memory isn't in shortage, so that can't be the issue, and it feels too early for a 3G model (which I'm expecting in June) - plus there's no media event scheduled AFAIK
It's also very un-Apple like to allow such an important product to run dry in the middle of it's lifetime, so supply constraints can't be the issue. If there'd been a fire at the iPhone factory, I'm sure we would have heard about it.....
They misread the market. They cut orders in January based on slower than expected December sales. In fact they should have realized that fewer people will give a phone as a gift because of the contract involved - and that the market is unlike a ipod or mac.
3G in June. Iphone (2,Lite,Nano??) in September.
--Actually they should re-consider the September launch based upon of the seasonality of phones. Launch Iphone Nano or Iphone Lite prior to august when parents are getting phones for high schoolers and college kids
Apple Stores may not have any, but AT&T have plenty. Simi Valley and Northridge were sold out. Simi Valley told me to call back in a few days. Northridge referred me to an AT&T Store. I called the AT&T store in Valencia CA and they had plenty of the 16 GB models and I picked up two of them.
My experience 10 days ago a bit different in your area. Apple Northridge had no iPhones, the two closest AT&T stores had no iPhones. I got the last 16gb one in stock at Apple Canoga Park that afternoon.
You know of course that since we just bought 16gb phones that once the 14 day return period is expired 32gb phones, or the new 3g models will be released. That's been my experience with every Apple product I've bought in the last 3 years. Not sure to laugh or cry at that. ;-)
It doesn't have to be 3G or more memory. It could be a minor tech spec change (10% faster processor or 20% longer battery life would do).
Apple does that when they have minor revision to their Macbooks. Why would iPhone be different?
Recent deals of refurbished iPhones is another indicator.
I think the revision will focus on either battery - something not big enough to make a big splash in the press, but greatly improves the end-user experience so it shouldn't wait.
Apple Stores may not have any, but AT&T have plenty. Simi Valley and Northridge were sold out. Simi Valley told me to call back in a few days. Northridge referred me to an AT&T Store. I called the AT&T store in Valencia CA and they had plenty of the 16 GB models and I picked up two of them.
They let me buy two of them and leave. We provided our phone numbers since we are already existing AT&T customers just so he can update our account info, but we activated them at home with iTunes and within a few minutes, both phones were active and our old Moto phones were deactivated.
I've been waiting to respond today to see what happens, but now it's almost 4:00 pm, and there's no news. If there were to be news, it would normally have been releases early in the day, so it's likely safe to say that there won't be any today.
But at least the markets are up nicely, with Apple at this moment (real time quote) being at $149.19
Apple's 2nd quarter earnings conference call is on the 23rd of this month. if they don't fix this issue soon, they (and their stock that has been rising recently) will get whacked upside the head by the analysts.
Apple's 2nd quarter earnings conference call is on the 23rd of this month. if they don't fix this issue soon, they (and their stock that has been rising recently) will get whacked upside the head by the analysts.
macworld is now advertising iphones at $649. 16 gig , voice and video capture and playback, gsm and edge, same size , im etc, told ya,. 3rd generation iphone, but not 3 g
macworld is now advertising iphones at $649. 16 gig , voice and video capture and playback, gsm and edge, same size , im etc, told ya,. 3rd generation iphone, but not 3 g
Something like that certainly makes sense. Apple couldn't begin to sell another phone that would require FCC approval [which a 3g one would] until after it had been approved [and outed beforehand on the FCC website].
They can however sell a new model with changes to non-FCC scrutinized items, memory changes, camera changes, etc. would all be fair game.
macworld is now advertising iphones at $649. 16 gig , voice and video capture and playback, gsm and edge, same size , im etc, told ya,. 3rd generation iphone, but not 3 g
Apple simply doesn't make stock disruption mistakes! I am sure they have a system put in place where they analyse sales on a weekly basis.
It cannot be a publicity stunt either, the bottomline is too dear for the company and they believe in sales pushed (free) marketing, not marketing caused by lack of sales.
This is only hear-say but it seems quite plausible that a new 3G model may very well be already approved by the FCC since Apple has now well established need the for secrecy before the FCC.
Man, it's gotta be new iPhones and the reason why they're letting go of inventory is that they're coming up with a whole line of new models, thus replacing the current EDGE phone with a smaller cheaper model, maybe the clamshell one. Maybe the 3G model arrives in stores in May or June while this new EDGE model gets out sooner.
Remember Jobs doesn't want to be in the same position when he discounted the iPhone price again. But if he repackages old technology into a new casing he can sell it cheaper with no booing what-so-ever..
If this is true, management wise, we may now understand the current iPhone was a guinea pig, testing the waters so to speak, and so was the iPod Touch. The market's reaction was so amazing that they are now adapting their plans to a full scale assault on the market.
Hint: watch Apple TV go up the same route, from a 'hobby' gadget - man, that was April 1st joke he pulled on some of us - to a full fledged business too, the 4th leg of Apple's chair, it is happening already. See, what's the USB port for?
Why would Apple move their presumable plans so forward and not wait for June?! Because, dear fellow Apple lovers, that's what a brilliant & assertive company does and we who watch Apple kindda know that its reaction to an on-going recession is to move forward with innovation & proactiveness, to beat the market. That is also the reason why they are always so conservative with their guidance, so that they can beat the market!
Apple is all about being creative, would they not to be so management wise?!
Gene Munster and Toni Sacconaghi continuously discount the role of international demand in iPhone sales. They do this primarily because they have a very America-centric view of the world in which this 5% tail wags the dog. Not in cell phones.
This is the issue. The customer-satisfaction numbers you see for iPhone in the US are no different internationally, in some cases they are much higher because the price ($399 and $499 is seen as perfectly reasonable, particularly in emerging markets used to paying higher premiums on US prices for BlackBerry and high-end Nokia phones).
Demand for iPhones outside the United States is out of control and has reached the point where it has started to impact Apple's normalized supply chain projections. It's okay to have a delta of, say, 100,000 units or so per year between actual and forecast. International demand is driving that delta upwards of 1 million. That's a whole different ball game for component sourcing, quality control and production ramp-up and some things are starting to come unstuck, even for a finely managed company like Apple.
What's driving this?
1. Free, out-of the box -ready, GUI-based network unlock solutions like Ziphone and iLiberty. Confidence in these unlock systems has grown significantly over time as technical expertise required to use them has fallen.
2. A large, very organized procurement mechanism for iPhones, particularly into Russia, Eastern Europe, India and China. There are people who go from store to store buying iPhones and aggregating them for export to "resellers" overseas.
3. Proliferation of Wi-Fi penetration and the recognition that in GSM countries, iPhone works simply and well enough. Wi-Fi hotspot usage is growing significantly around the world and the iPhone's superior web browser is taking full advantage to maximize customer experience. It's the right product at the right time for the macro-trend.
4. The iPhone is relatively cheap to emerging market customers used to paying $500 for a BlackBerry and a cheap US Dollar makes it an even better deal. For example in Russia, at $499, a16GB iPhone translates to around 12,000 Rubles. An 8GB Nokia N95 costs $815 or 20,000 Rubles. The value-for-money perception with iPhone is absolutely huge.
5. Zero or minimal compatibility issues on GSM Networks. I have used my iPhone with SIM cards from 32 different networks in Europe and developing countries. It works seamlessly. The iPhone is a quad-band GSM phone, meaning that it supports all four major GSM frequency bands, 850 and 1900 MHz bands which are used in the Americas, and 900 / 1800 MHz bands used in most other parts of the world, making it compatible with all major GSM networks worldwide. 2 billion people around the world use GSM phones.
To give you an idea of international demand; There are Nigerians shipping more than 500 phones a week from New York to Lagos and Nigeria is a third world country. The EDGE internet works perfectly, albeit just as slow, there and data is very, very cheap at $5 per 100 MB of usage.
"Data-driven" analysts like Munster and Sacconaghi get misled by the laziness of long-distance US-chauvinist analysis into making market projections based on perfunctory GDP per capita statistics and "population living on less than dollar per day" figures. They look at the wrong data because they think the world works in the same way everywhere. This weak analysis disregards latent middle and upper income demand in developing countries.
If you define a potential user as someone who can afford to pay twice as much for an iPhone and double what an AT&T subscriber pays per month, there are at least 7 million potential iPhone users in Nigeria, 9 Million in South Africa, 80 Million in India, 25 Million in Russia, 25 Million in Brazil, 8 Million in Indonesia and 100 Million in China. Not all of them will be users but just 5% of this number is way more than 10 million. Considering mobile phones are some of the most universally adopted products on the planet, a good GSM phone reaches Iran and Iraq much faster than people on Wall Street can ever imagine.
From research I'm conducting. we have conservative numbers of grey market as follows:
Russia 2000-4000 phones/week
China 4000 -6000 phones/ week
Demand from Western Europe is slower but still significant, averaging anything from 2000 -3000 units/week from New York and other big cities with international airports. Now, not all the phones shipped from New York are bought in NYC but the export pattern is clear and very strong.
I have completely ignored the cash-flush Middle East where Dubai has always been a world-leading port in grey market clearing and forwarding for consumer electronics.
Conservatively speaking, something is sucking 15,000-20,000 iPhones/week out of the United States. If this phenomenon is coinciding with steadily growing adoption among US customers, suddenly the slack Apple had is drying up.
Many of the millions of visitors coming to the United States every month are going back with a packed iPhone in their luggage. They are not likely to buy it at an AT&T store because the requirements are inconsistent (some stores were requiring SSNs and activation), queues are long (people with a limited window to get back to the airport), lack of other Apple products and accessories and simply, AT&T stores are not landmarks.
Oh, well maybe it's just version 2.0 coming out soon.
May be you are right. I think Apple might have underestimated demand based on the 2 iPhone limit imposed over the Holiday. Once they removed this restriction, the demand probably more than doubled due to people shipping them overseas.
May be you are right. I think Apple might have underestimated demand based on the 2 iPhone limit imposed over the Holiday. Once they removed this restriction, the demand probably more than doubled due to people shipping them overseas.
However, we might all be wrong
The two-unit limit is still there, even for credit card purchases. My friend from China just bought 2 last week. He was planning to buy 4.
Gene Munster and Toni Sacconaghi continuously discount the role of international demand in iPhone sales. They do this primarily because they have a very America-centric view of the world in which this 5% tail wags the dog. Not in cell phones.
This is the issue. The customer-satisfaction numbers you see for iPhone in the US are no different internationally, in some cases they are much higher because the price ($399 and $499 is seen as perfectly reasonable, particularly in emerging markets used to paying higher premiums on US prices for BlackBerry and high-end Nokia phones).
Demand for iPhones outside the United States is out of control and has reached the point where it has started to impact Apple's normalized supply chain projections. It's okay to have a delta of, say, 100,000 units or so per year between actual and forecast. International demand is driving that delta upwards of 1 million. That's a whole different ball game for component sourcing, quality control and production ramp-up and some things are starting to come unstuck, even for a finely managed company like Apple.
What's driving this?
1. Free, out-of the box -ready, GUI-based network unlock solutions like Ziphone and iLiberty. Confidence in these unlock systems has grown significantly over time as technical expertise required to use them has fallen.
2. A large, very organized procurement mechanism for iPhones, particularly into Russia, Eastern Europe, India and China. There are people who go from store to store buying iPhones and aggregating them for export to "resellers" overseas.
3. Proliferation of Wi-Fi penetration and the recognition that in GSM countries, iPhone works simply and well enough. Wi-Fi hotspot usage is growing significantly around the world and the iPhone's superior web browser is taking full advantage to maximize customer experience. It's the right product at the right time for the macro-trend.
4. The iPhone is relatively cheap to emerging market customers used to paying $500 for a BlackBerry and a cheap US Dollar makes it an even better deal. For example in Russia, at $499, a16GB iPhone translates to around 12,000 Rubles. An 8GB Nokia N95 costs $815 or 20,000 Rubles. The value-for-money perception with iPhone is absolutely huge.
5. Zero or minimal compatibility issues on GSM Networks. I have used my iPhone with SIM cards from 32 different networks in Europe and developing countries. It works seamlessly. The iPhone is a quad-band GSM phone, meaning that it supports all four major GSM frequency bands, 850 and 1900 MHz bands which are used in the Americas, and 900 / 1800 MHz bands used in most other parts of the world, making it compatible with all major GSM networks worldwide. 2 billion people around the world use GSM phones.
To give you an idea of international demand; There are Nigerians shipping more than 500 phones a week from New York to Lagos and Nigeria is a third world country. The EDGE internet works perfectly, albeit just as slow, there and data is very, very cheap at $5 per 100 MB of usage.
"Data-driven" analysts like Munster and Sacconaghi get misled by the laziness of long-distance US-chauvinist analysis into making market projections based on perfunctory GDP per capita statistics and "population living on less than dollar per day" figures. They look at the wrong data because they think the world works in the same way everywhere. This weak analysis disregards latent middle and upper income demand in developing countries.
If you define a potential user as someone who can afford to pay twice as much for an iPhone and double what an AT&T subscriber pays per month, there are at least 7 million potential iPhone users in Nigeria, 9 Million in South Africa, 80 Million in India, 25 Million in Russia, 25 Million in Brazil, 8 Million in Indonesia and 100 Million in China. Not all of them will be users but just 5% of this number is way more than 10 million. Considering mobile phones are some of the most universally adopted products on the planet, a good GSM phone reaches Iran and Iraq much faster than people on Wall Street can ever imagine.
From research I'm conducting. we have conservative numbers of grey market as follows:
Russia 2000-4000 phones/week
China 4000 -6000 phones/ week
Demand from Western Europe is slower but still significant, averaging anything from 2000 -3000 units/week from New York and other big cities with international airports. Now, not all the phones shipped from New York are bought in NYC but the export pattern is clear and very strong.
I have completely ignored the cash-flush Middle East where Dubai has always been a world-leading port in grey market clearing and forwarding for consumer electronics.
Conservatively speaking, something is sucking 15,000-20,000 iPhones/week out of the United States. If this phenomenon is coinciding with steadily growing adoption among US customers, suddenly the slack Apple had is drying up.
Many of the millions of visitors coming to the United States every month are going back with a packed iPhone in their luggage. They are not likely to buy it at an AT&T store because the requirements are inconsistent (some stores were requiring SSNs and activation), queues are long (people with a limited window to get back to the airport), lack of other Apple products and accessories and simply, AT&T stores are not landmarks.
Oh, well maybe it's just version 2.0 coming out soon.
I think not.
Tantrum, your text is brilliant, really, you should mail it to [email protected], Apple is in deep need of analysis like yours! Oh, I guess they must know why they have ran out of stock
Well, either way it is brilliant for Apple!
I wonder if you think much the same way regarding the recent MacBook Air shortages? I believe it must be selling like hot cakes too!
Comments
I can't work out how though ! A straight price drop doesn't make sense because you don't need new inventory for that. Bumping the models to 16Gb and 32Gb doesn't make sense either, because you'd want to keep the current stock of 16Gb models high. Flash memory isn't in shortage, so that can't be the issue, and it feels too early for a 3G model (which I'm expecting in June) - plus there's no media event scheduled AFAIK
It's also very un-Apple like to allow such an important product to run dry in the middle of it's lifetime, so supply constraints can't be the issue. If there'd been a fire at the iPhone factory, I'm sure we would have heard about it.....
This is a mystery then.
3G in June. Iphone (2,Lite,Nano??) in September.
--Actually they should re-consider the September launch based upon of the seasonality of phones. Launch Iphone Nano or Iphone Lite prior to august when parents are getting phones for high schoolers and college kids
Apple Stores may not have any, but AT&T have plenty. Simi Valley and Northridge were sold out. Simi Valley told me to call back in a few days. Northridge referred me to an AT&T Store. I called the AT&T store in Valencia CA and they had plenty of the 16 GB models and I picked up two of them.
My experience 10 days ago a bit different in your area. Apple Northridge had no iPhones, the two closest AT&T stores had no iPhones. I got the last 16gb one in stock at Apple Canoga Park that afternoon.
You know of course that since we just bought 16gb phones that once the 14 day return period is expired 32gb phones, or the new 3g models will be released. That's been my experience with every Apple product I've bought in the last 3 years. Not sure to laugh or cry at that. ;-)
It doesn't have to be 3G or more memory. It could be a minor tech spec change (10% faster processor or 20% longer battery life would do).
Apple does that when they have minor revision to their Macbooks. Why would iPhone be different?
Recent deals of refurbished iPhones is another indicator.
I think the revision will focus on either battery - something not big enough to make a big splash in the press, but greatly improves the end-user experience so it shouldn't wait.
Apple Stores may not have any, but AT&T have plenty. Simi Valley and Northridge were sold out. Simi Valley told me to call back in a few days. Northridge referred me to an AT&T Store. I called the AT&T store in Valencia CA and they had plenty of the 16 GB models and I picked up two of them.
They let me buy two of them and leave. We provided our phone numbers since we are already existing AT&T customers just so he can update our account info, but we activated them at home with iTunes and within a few minutes, both phones were active and our old Moto phones were deactivated.
Pasadena
Sherman Oaks
Glendale
The Grove
All Sold Out. FYI...
Perhaps all the inventory has been re-routed to Canada on an impending launch.
:end Fantasy
Well, look at the bright side: By the time it gets released in Canada, it'll cost only $99!
But at least the markets are up nicely, with Apple at this moment (real time quote) being at $149.19
Apple's 2nd quarter earnings conference call is on the 23rd of this month. if they don't fix this issue soon, they (and their stock that has been rising recently) will get whacked upside the head by the analysts.
Uh oh...... good observation.
macworld is now advertising iphones at $649. 16 gig , voice and video capture and playback, gsm and edge, same size , im etc,
Something like that certainly makes sense. Apple couldn't begin to sell another phone that would require FCC approval [which a 3g one would] until after it had been approved [and outed beforehand on the FCC website].
They can however sell a new model with changes to non-FCC scrutinized items, memory changes, camera changes, etc. would all be fair game.
macworld is now advertising iphones at $649. 16 gig , voice and video capture and playback, gsm and edge, same size , im etc,
Uhh. Okay. Link?
It cannot be a publicity stunt either, the bottomline is too dear for the company and they believe in sales pushed (free) marketing, not marketing caused by lack of sales.
This is only hear-say but it seems quite plausible that a new 3G model may very well be already approved by the FCC since Apple has now well established need the for secrecy before the FCC.
Man, it's gotta be new iPhones and the reason why they're letting go of inventory is that they're coming up with a whole line of new models, thus replacing the current EDGE phone with a smaller cheaper model, maybe the clamshell one. Maybe the 3G model arrives in stores in May or June while this new EDGE model gets out sooner.
Remember Jobs doesn't want to be in the same position when he discounted the iPhone price again. But if he repackages old technology into a new casing he can sell it cheaper with no booing what-so-ever..
If this is true, management wise, we may now understand the current iPhone was a guinea pig, testing the waters so to speak, and so was the iPod Touch. The market's reaction was so amazing that they are now adapting their plans to a full scale assault on the market.
Hint: watch Apple TV go up the same route, from a 'hobby' gadget - man, that was April 1st joke he pulled on some of us - to a full fledged business too, the 4th leg of Apple's chair, it is happening already. See, what's the USB port for?
Why would Apple move their presumable plans so forward and not wait for June?! Because, dear fellow Apple lovers, that's what a brilliant & assertive company does and we who watch Apple kindda know that its reaction to an on-going recession is to move forward with innovation & proactiveness, to beat the market. That is also the reason why they are always so conservative with their guidance, so that they can beat the market!
Apple is all about being creative, would they not to be so management wise?!
This is the issue. The customer-satisfaction numbers you see for iPhone in the US are no different internationally, in some cases they are much higher because the price ($399 and $499 is seen as perfectly reasonable, particularly in emerging markets used to paying higher premiums on US prices for BlackBerry and high-end Nokia phones).
Demand for iPhones outside the United States is out of control and has reached the point where it has started to impact Apple's normalized supply chain projections. It's okay to have a delta of, say, 100,000 units or so per year between actual and forecast. International demand is driving that delta upwards of 1 million. That's a whole different ball game for component sourcing, quality control and production ramp-up and some things are starting to come unstuck, even for a finely managed company like Apple.
What's driving this?
1. Free, out-of the box -ready, GUI-based network unlock solutions like Ziphone and iLiberty. Confidence in these unlock systems has grown significantly over time as technical expertise required to use them has fallen.
2. A large, very organized procurement mechanism for iPhones, particularly into Russia, Eastern Europe, India and China. There are people who go from store to store buying iPhones and aggregating them for export to "resellers" overseas.
3. Proliferation of Wi-Fi penetration and the recognition that in GSM countries, iPhone works simply and well enough. Wi-Fi hotspot usage is growing significantly around the world and the iPhone's superior web browser is taking full advantage to maximize customer experience. It's the right product at the right time for the macro-trend.
4. The iPhone is relatively cheap to emerging market customers used to paying $500 for a BlackBerry and a cheap US Dollar makes it an even better deal. For example in Russia, at $499, a16GB iPhone translates to around 12,000 Rubles. An 8GB Nokia N95 costs $815 or 20,000 Rubles. The value-for-money perception with iPhone is absolutely huge.
5. Zero or minimal compatibility issues on GSM Networks. I have used my iPhone with SIM cards from 32 different networks in Europe and developing countries. It works seamlessly. The iPhone is a quad-band GSM phone, meaning that it supports all four major GSM frequency bands, 850 and 1900 MHz bands which are used in the Americas, and 900 / 1800 MHz bands used in most other parts of the world, making it compatible with all major GSM networks worldwide. 2 billion people around the world use GSM phones.
To give you an idea of international demand; There are Nigerians shipping more than 500 phones a week from New York to Lagos and Nigeria is a third world country. The EDGE internet works perfectly, albeit just as slow, there and data is very, very cheap at $5 per 100 MB of usage.
"Data-driven" analysts like Munster and Sacconaghi get misled by the laziness of long-distance US-chauvinist analysis into making market projections based on perfunctory GDP per capita statistics and "population living on less than dollar per day" figures. They look at the wrong data because they think the world works in the same way everywhere. This weak analysis disregards latent middle and upper income demand in developing countries.
If you define a potential user as someone who can afford to pay twice as much for an iPhone and double what an AT&T subscriber pays per month, there are at least 7 million potential iPhone users in Nigeria, 9 Million in South Africa, 80 Million in India, 25 Million in Russia, 25 Million in Brazil, 8 Million in Indonesia and 100 Million in China. Not all of them will be users but just 5% of this number is way more than 10 million. Considering mobile phones are some of the most universally adopted products on the planet, a good GSM phone reaches Iran and Iraq much faster than people on Wall Street can ever imagine.
From research I'm conducting. we have conservative numbers of grey market as follows:
Russia 2000-4000 phones/week
China 4000 -6000 phones/ week
Demand from Western Europe is slower but still significant, averaging anything from 2000 -3000 units/week from New York and other big cities with international airports. Now, not all the phones shipped from New York are bought in NYC but the export pattern is clear and very strong.
I have completely ignored the cash-flush Middle East where Dubai has always been a world-leading port in grey market clearing and forwarding for consumer electronics.
Conservatively speaking, something is sucking 15,000-20,000 iPhones/week out of the United States. If this phenomenon is coinciding with steadily growing adoption among US customers, suddenly the slack Apple had is drying up.
Many of the millions of visitors coming to the United States every month are going back with a packed iPhone in their luggage. They are not likely to buy it at an AT&T store because the requirements are inconsistent (some stores were requiring SSNs and activation), queues are long (people with a limited window to get back to the airport), lack of other Apple products and accessories and simply, AT&T stores are not landmarks.
Oh, well maybe it's just version 2.0 coming out soon.
I think not.
May be you are right. I think Apple might have underestimated demand based on the 2 iPhone limit imposed over the Holiday. Once they removed this restriction, the demand probably more than doubled due to people shipping them overseas.
However, we might all be wrong
Tantrum:
May be you are right. I think Apple might have underestimated demand based on the 2 iPhone limit imposed over the Holiday. Once they removed this restriction, the demand probably more than doubled due to people shipping them overseas.
However, we might all be wrong
The two-unit limit is still there, even for credit card purchases. My friend from China just bought 2 last week. He was planning to buy 4.
http://blogs.barrons.com/techtraderd...t/?mod=BOLBlog
Hopefully a 3G model by June. *crosses fingers*
.
Gene Munster and Toni Sacconaghi continuously discount the role of international demand in iPhone sales. They do this primarily because they have a very America-centric view of the world in which this 5% tail wags the dog. Not in cell phones.
This is the issue. The customer-satisfaction numbers you see for iPhone in the US are no different internationally, in some cases they are much higher because the price ($399 and $499 is seen as perfectly reasonable, particularly in emerging markets used to paying higher premiums on US prices for BlackBerry and high-end Nokia phones).
Demand for iPhones outside the United States is out of control and has reached the point where it has started to impact Apple's normalized supply chain projections. It's okay to have a delta of, say, 100,000 units or so per year between actual and forecast. International demand is driving that delta upwards of 1 million. That's a whole different ball game for component sourcing, quality control and production ramp-up and some things are starting to come unstuck, even for a finely managed company like Apple.
What's driving this?
1. Free, out-of the box -ready, GUI-based network unlock solutions like Ziphone and iLiberty. Confidence in these unlock systems has grown significantly over time as technical expertise required to use them has fallen.
2. A large, very organized procurement mechanism for iPhones, particularly into Russia, Eastern Europe, India and China. There are people who go from store to store buying iPhones and aggregating them for export to "resellers" overseas.
3. Proliferation of Wi-Fi penetration and the recognition that in GSM countries, iPhone works simply and well enough. Wi-Fi hotspot usage is growing significantly around the world and the iPhone's superior web browser is taking full advantage to maximize customer experience. It's the right product at the right time for the macro-trend.
4. The iPhone is relatively cheap to emerging market customers used to paying $500 for a BlackBerry and a cheap US Dollar makes it an even better deal. For example in Russia, at $499, a16GB iPhone translates to around 12,000 Rubles. An 8GB Nokia N95 costs $815 or 20,000 Rubles. The value-for-money perception with iPhone is absolutely huge.
5. Zero or minimal compatibility issues on GSM Networks. I have used my iPhone with SIM cards from 32 different networks in Europe and developing countries. It works seamlessly. The iPhone is a quad-band GSM phone, meaning that it supports all four major GSM frequency bands, 850 and 1900 MHz bands which are used in the Americas, and 900 / 1800 MHz bands used in most other parts of the world, making it compatible with all major GSM networks worldwide. 2 billion people around the world use GSM phones.
To give you an idea of international demand; There are Nigerians shipping more than 500 phones a week from New York to Lagos and Nigeria is a third world country. The EDGE internet works perfectly, albeit just as slow, there and data is very, very cheap at $5 per 100 MB of usage.
"Data-driven" analysts like Munster and Sacconaghi get misled by the laziness of long-distance US-chauvinist analysis into making market projections based on perfunctory GDP per capita statistics and "population living on less than dollar per day" figures. They look at the wrong data because they think the world works in the same way everywhere. This weak analysis disregards latent middle and upper income demand in developing countries.
If you define a potential user as someone who can afford to pay twice as much for an iPhone and double what an AT&T subscriber pays per month, there are at least 7 million potential iPhone users in Nigeria, 9 Million in South Africa, 80 Million in India, 25 Million in Russia, 25 Million in Brazil, 8 Million in Indonesia and 100 Million in China. Not all of them will be users but just 5% of this number is way more than 10 million. Considering mobile phones are some of the most universally adopted products on the planet, a good GSM phone reaches Iran and Iraq much faster than people on Wall Street can ever imagine.
From research I'm conducting. we have conservative numbers of grey market as follows:
Russia 2000-4000 phones/week
China 4000 -6000 phones/ week
Demand from Western Europe is slower but still significant, averaging anything from 2000 -3000 units/week from New York and other big cities with international airports. Now, not all the phones shipped from New York are bought in NYC but the export pattern is clear and very strong.
I have completely ignored the cash-flush Middle East where Dubai has always been a world-leading port in grey market clearing and forwarding for consumer electronics.
Conservatively speaking, something is sucking 15,000-20,000 iPhones/week out of the United States. If this phenomenon is coinciding with steadily growing adoption among US customers, suddenly the slack Apple had is drying up.
Many of the millions of visitors coming to the United States every month are going back with a packed iPhone in their luggage. They are not likely to buy it at an AT&T store because the requirements are inconsistent (some stores were requiring SSNs and activation), queues are long (people with a limited window to get back to the airport), lack of other Apple products and accessories and simply, AT&T stores are not landmarks.
Oh, well maybe it's just version 2.0 coming out soon.
I think not.
Tantrum, your text is brilliant, really, you should mail it to [email protected], Apple is in deep need of analysis like yours! Oh, I guess they must know why they have ran out of stock
Well, either way it is brilliant for Apple!
I wonder if you think much the same way regarding the recent MacBook Air shortages? I believe it must be selling like hot cakes too!
Cheers from Portugal, Europe!