Apple encountering US-wide iPhone shortage

[AppleInsider]

Checks with stores across the US show Apple to have been virtually devoid of iPhone stock for days, even at its online store -- and with signs that the company is aware of its widespread nature.

When AppleInsider contacted stores across the country, the answer was always the same: all stock of 8GB and 16GB iPhone models was completely sold out, and clerks were unsure of when their stores were receive more.

This included flagship outlets in Chicago, New York City, and San Francisco.

Staffers at some stores also appear to have been briefed ahead of time that other stores besides their own were also completely without supplies of the Apple handset. When contacting the Fifth Avenue store, the clerk noted that "all three New York stores" were without stock. At Miami's store at The Falls, one employee stated that supplies were "constrained" throughout all of Florida as well as in New York.

The sudden shortfall has been further confirmed by reports from AppleInsider readers. In several cases, their own investigations reported all stores in a given state running out, including Michigan, New Jersey, Pennsylvania, and Texas. Many if not all AT&T stores were also said to have run out of inventory.

Apple's online store for the US, usually a bellwether of overall supply, currently shows a 5-7 day shipping delay for iPhones regardless of model.

The latest check reveals a shortage that has only been exacerbated since it began last week on a smaller scale. International stores have fared better, though Apple France continued to show only the 8GB model as available. Austrian, Irish, and German stores list both models, though none of these currently allow customers to order the iPhone online.

Despite the pervasive issue, Apple has not provided an official explanation for its rapidly depleting iPhone offerings. The shortfall comes months ahead of new models predicted by analysts and is uncharacteristic for the modern incarnation of the Cupertino, Calif.-based electronics firm, which quickly recovered its inventories even from the initial iPhone shortage that followed the weekend after the product's launch in June 2007.

When pressed, one retail clerk in Las Vegas' Fashion Show Apple store would only venture that there was likely a mismatch between supply and demand.

"They're just popular," the worker said.

[ View this article at AppleInsider.com ]

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[drjjones]

Originally Posted by AppleInsider

Checks with stores across the US show Apple to have been virtually devoid of iPhone stock for days, even at its online store -- and with signs that the company is aware of its widespread nature.

When AppleInsider contacted stores across the country, the answer was always the same: all stock of 8GB and 16GB iPhone models was completely sold out, and clerks were unsure of when their stores were receive more.

This included flagship outlets in Chicago, New York City, and San Francisco.

Staffers at some stores also appear to have been briefed ahead of time that other stores besides their own were also completely without supplies of the Apple handset. When contacting the Fifth Avenue store, the clerk noted that "all three New York stores" were without stock. At Miami's store at The Falls, one employee stated that supplies were "constrained" throughout all of Florida as well as in New York.

The sudden shortfall has been further confirmed by reports from AppleInsider readers. In several cases, their own investigations reported all stores in a given state running out, including Michigan, New Jersey, Pennsylvania, and Texas. Many if not all AT&T stores were also said to have run out of inventory.

Apple's online store for the US, usually a bellwether of overall supply, currently shows a 5-7 day shipping delay for iPhones regardless of model.

The latest check reveals a shortage that has only been exacerbated since it began last week on a smaller scale. International stores have fared better, though Apple France continued to show only the 8GB model as available. Austrian, Irish, and German stores list both models, though none of these currently allow customers to order the iPhone online.

Despite the pervasive issue, Apple has not provided an official explanation for its rapidly depleting iPhone offerings. The shortfall comes months ahead of new models predicted by analysts and is uncharacteristic for the modern incarnation of the Cupertino, Calif.-based electronics firm, which quickly recovered its inventories even from the initial iPhone shortage that followed the weekend after the product's launch in June 2007.

When pressed, one retail clerk in Las Vegas' Fashion Show Apple store would only venture that there was likely a mismatch between supply and demand.

"They're just popular," the worker said.

[ View this article at AppleInsider.com ]

maybe we get new phones tomorrow? It's a Tuesday. All nicely stacked in pallets delivered at 8 am.. let's all fantasize together now. wahhoot 1st post

[parky]

Price cut perhaps?

[Restalot]

Perhaps all the inventory has been re-routed to Canada on an impending launch.

:end Fantasy

[MacVicta]

Wasn't there a lot of hoopla last month about an analyst who said Apple cut iPhone production?

[Feynman]

Yeah it's way to early for the 3G models.

What I see them doing is another price drop, cutting production of current models, and starting to clear inventory. Then ramping production of the new models in May, getting fresh stock of 3G models in the second week of June (WWDC Baby)!

[Ryuuzaki]

Well this kinda sucks. I'm going to the states in a month and I was gonna get an iPhone while I was there, =( Really hope that the shortage will be over by then. If not, hope the 3G comes out soon. I can't see it coming out till at least WWDC though.

[backtomac]

Why would Apple reduce the price on the iPhone when they already face a supply shortage?

[yulelog035]

Originally Posted by drjjones

maybe we get new phones tomorrow? It's a Tuesday. All nicely stacked in pallets delivered at 8 am.. let's all fantasize together now. wahhoot 1st post

I smell an April Fool's joke tomorrow.

[cameronj]

Originally Posted by Feynman

Yeah it's way to early for the 3G models.

What I see them doing is another price drop, cutting production of current models, and starting to clear inventory. Then ramping production of the new models in May, getting fresh stock of 3G models in the second week of June (WWDC Baby)!

You drop prices to clear inventory, not the reverse...

I find it hard to believe that this is clearing the way for 3G models, but its hard to imagine any other explanation. With company owned retail stores I can't imagine such a shortfall in production lacking a price drop or other stimulus.

[iFan]

I work at an AT&T store in Illinois and all of the Apple stores are out of iphones (at least the 16GB version) as well. My store has mysteriously been kept supplied, although we are pretty low, we have both versions in stock. I have noticed a lot less phones being shipped to us, though.

[one9deuce]

All three Apple Stores in Oregon are completely sold out of both models. With the iPhone version 2 now verified, this can't be a complete coincidence.

[JeffDM]

Originally Posted by cameronj

You drop prices to clear inventory, not the reverse...

I find it hard to believe that this is clearing the way for 3G models, but its hard to imagine any other explanation. With company owned retail stores I can't imagine such a shortfall in production lacking a price drop or other stimulus.

It may be possible that there is going to be a restyling, meaning that the existing models might not fit the new lineup very well.

There may also be supply problems for certain parts, or an unexpected run in demand.

[BRussell]

I don't see them dropping the original iPhone immediately after releasing the next generation anyway, so this most likely has absolutely nothing to do with new iPhones.

[GregAlexander]

Originally Posted by Feynman

Yeah it's way to early for the 3G models.

What I see them doing is another price drop, cutting production of current models, and starting to clear inventory. Then ramping production of the new models in May, getting fresh stock of 3G models in the second week of June (WWDC Baby)!

After these reports - I'm thinking the iPhone is about to split into 2 different product lines.

One of those lines we'll see very shortly. The other will include 3G and will be a few months away.

I wonder if GPS will be in these.

[VisualZone]

Originally Posted by yulelog035

I smell an April Fool's joke tomorrow.

Maybe. You do know when Apple was founded, right?

[TenoBell]

It may be possible that there is going to be a restyling, meaning that the existing models might not fit the new lineup very well.

Yeah I think this is more than likely. The past few years Apple has pretty consistently redesigned its mobile devices during a product refresh.

I don't see them dropping the original iPhone immediately after releasing the next generation anyway, so this most likely has absolutely nothing to do with new iPhones.

I would see Apple using the same design across all iPhones and simply dropping the price of the 8GB.

[Bageljoey]

Originally Posted by JeffDM

It may be possible that there is going to be a restyling, meaning that the existing models might not fit the new lineup very well.

There may also be supply problems for certain parts, or an unexpected run in demand.

Could be that they were fearing a freeze on demand before the impending 3G release so they are allowing supply to dwindle to nothing (free publicity) before a minor bump like a bit more storage or something (another burst of free publicity).
This has the advantage of keeping sales up before the big event and keeps the iPhone being reported in a positive light: "iPhone outsells supply!" and "Now with more storage!" sound a lot better than "Demand for iPhones stalls for a quarter."

With the initial price still quite high and customers limited to one carrier, the iPhone depends on hype to keep things going. I'm not saying that they are not worth it, just that they need something extra to overcome those two drawbacks.

[bwik]

Pretty interesting.

Apple might run dry for a whole month to flush out all inventory. I dunno. Sounds a little risky, but most buyers are likely to wait patiently. So it shouldn't sacrifice too many sales.

Only Apple is strong enough to keep people loyal even with no product to sell

[jmadlena]

Originally Posted by Bageljoey

Could be that they were fearing a freeze on demand before the impending 3G release so they are allowing supply to dwindle to nothing (free publicity) before a minor bump like a bit more storage or something (another burst of free publicity).
This has the advantage of keeping sales up before the big event and keeps the iPhone being reported in a positive light: "iPhone outsells supply!" and "Now with more storage!" sound a lot better than "Demand for iPhones stalls for a quarter."...

I agree entirely.

We know 3G is coming in 2008
We know WWDC (which would be an entirely likely event to release the 3G iPhone at) is in June
We know June is the one year anniversary of the iPhone

Since consumers know all of this (at least the ones perusing AppleInsider do), why would we buy an iPhone now, when a newer, faster model likely to have higher storage capacities (and some goodies we don't know about) comes out in 3 months?

We wouldn't. So, just like you said: they choose to manipulate their inventories to make it look like the iPhone is selling as quick as ever.

Clever, Apple. *Shifty eyes*

[Ireland]

It is April 1st guys.

[Mac Boi]

Me: Anonymous Retail Employee

Apple Store where I work out of all iPhones

Tomorrow Tuesday

Prediction: New iPhones, but NOT 3G.

[mdriftmeyer]

Selling out of supplies is always good for the stock.

[MacTel]

Originally Posted by one9deuce

All three Apple Stores in Oregon are completely sold out of both models. With the iPhone version 2 now verified, this can't be a complete coincidence.

But, with iPhone firmware 2.0 being corporate friendly and coming in June corporations may be stocking-up for roll-out. AT&T does have the right to cater to their large business customers. Or Apple is going to introduce iPhone in five fruity colors.

[Constable Odo]

Well, how is it that those two crooks working in the Apple store in Salem's Rockingham Mall were able to get their hands on 330 iPhones to sell on the Black Market. Maybe there is lot more theft going on that Apple isn't aware of.

It's seems very strange that there is a shortage of iPhones in Apple stores, yet AT&T has plenty in stock. Why don't purchasers just go to the AT&T stores instead.

I hope the author isn't trying to turn this into a iPhone refresh rumor.:lol:

[drjjones]

They would never let stock dwindle without a reason, April 1 , 1976 is establishment day for Apple April 1 is their anniversary . New phone has to be comin tomorrow , er, today .

[melgross]

Originally Posted by mdriftmeyer

Selling out of supplies is always good for the stock.

I wish that were true, but it simply means less sales for the quarter.

[melgross]

Originally Posted by drjjones

They would never let stock dwindle without a reason, April 1 , 1976 is establishment day for Apple April 1 is their anniversary . New phone has to be comin tomorrow , er, today .

I hope that's the case.

[drjjones]

Hon Hal , the producer of the 3rd generation of iphone is ready to ship with the nod of Apple . This is the new quote on the Fidelity investment site just put up at 11:37 pm yesterday. I bet Steve nodded yesterday . Boy is the stock gonna go up today . They quote the Dow Jones Newswire .

[melgross]

Originally Posted by drjjones

Hon Hal , the producer of the 3rd generation of iphone is ready to ship with the nod of Apple . This is the new quote on the Fidelity investment site just put up at 11:37 pm yesterday. I bet Steve nodded yesterday . Boy is the stock gonna go up today .

We know they got the nod to build, I haven't read that they are shipping. In fact, the article I read said that they would be building in May.

I hope you're right, I'm ready to move now.

[cameronj]

Originally Posted by Constable Odo

Well, how is it that those two crooks working in the Apple store in Salem's Rockingham Mall were able to get their hands on 330 iPhones to sell on the Black Market. Maybe there is lot more theft going on that Apple isn't aware of.

It's seems very strange that there is a shortage of iPhones in Apple stores, yet AT&T has plenty in stock. Why don't purchasers just go to the AT&T stores instead.

Maybe the unlockers are getting more organized? When you buy one at the ATT store, don't you have to activate it then and there or do they let you buy two and leave?

[melgross]

Originally Posted by cameronj

Maybe the unlockers are getting more organized? When you buy one at the ATT store, don't you have to activate it then and there or do they let you buy two and leave?

You can do it at home. But Apple seems to be where most people want to buy their phone. I suppose it's cooler to buy there.

[hillstones]

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.

[drjjones]

Dow Jones Newswire is who Fidelity Investments is quoting

[GregAlexander]

Originally Posted by MacTel

Or Apple is going to introduce iPhone in five fruity colors.

Oh s***. Perhaps you are right.

Apple announces the 3G iPhone, beautiful in black, slightly better hardware all round and inbuilt GPS. Due June.

Alongside this, the updated cheaper 2G iPhone, same slightly better hardware all round, still 2G, inbuilt GPS, in five fruity colours.

Somehow the "in five fruity colours" makes the positioning of a non-3G iPhone alongside a 3G iPhone seem MUCH more likely. And I already thought it plausible.

[Phone-UI-Guy]

IMHO this all started with the release of the SDK. My guess is that demand is outstripping supply due to the enormous interest in the SDK and Version 2.0 of the firmware. Developers are getting the phones to develop software and test on the hardware. The users now know that Enterprise VPN, Wifi, Exchange, 3rd Party Native Apps, etc. are all coming. It is no longer a guessing game. Seeing this feature lineup on the iPhone will drive many more people to the phone.

I have been using an iPhone, but it has sucked not being able to get on the wifi at work, or to VPN to get to corporate systems. Those are non issues in firmware 2.0. So why not buy a phone now so you have it when the firmware hits?

Phone-UI-Guy

[urbansprawl]

This is kind of exciting.

First of all, the phones sold by AT&T have been purchased from Apple by AT&T, correct? In that case, if Apple is about to do something big, they have cleared out their inventory and AT&T is responsible to take care of their inventory. Not Apple's responsibility.

April 1st is obviously a sentimental day for Apple. Maybe something big will happen.

Certainly 3G/iPhone 2.0 firmware is married to WWDC. It would be very shocking for them to release this far ahead of time, and would give more selling time to meet that 10 million mark, but the product might be immature and obviously developers wouldn't be ready for App store yet.

Just waiting for the Apple Store to go down...

[TBaggins]

Originally Posted by Feynman

Yeah it's way to early for the 3G models.

Bingo. We haven't even yet seen any FCC approval for a 3G iPhone yet, and it wouldn't be for another six weeks after that that 3G models would start to show up.

Thing is though, Apple would likely need to ramp down production of the current model upon FCC approval* and/or announcement of the 3G model, not upon the 3G model actually showing up. Because a lot of ppl are going to wait to buy once they know that the new model's coming in six weeks (or whatever).

Either that, or you do a price cut on the current model upon FCC approval/announcement of the new model, if you need to keep the sales volume up. But if current supply conditions are related to the new model coming, then it sure looks like Apple did not opt to go the price cut route.


* note that Apple can't keep FCC approval of a 3G iPhone secret, said approval becomes public at a certain point in the process. What they can do, and have done, is to keep the interval of time between public knowledge of the approval and the launch of an iPhone model as short as possible.


.

[Otrain82]

May the Lord bring new iphones into the mix. I pray that the kindness of the Father will grant me this prayer...

[GregAlexander]

Originally Posted by TBaggins

Thing is though, Apple would likely need to ramp down production of the current model upon FCC approval* and/or announcement of the 3G model, not upon the 3G model actually showing up.

I would agree, IF the reports of NY drying up a few days ago had been followed up today by "nah, they've got some in now". Apple slowing down deliveries, moving high stock stores inventory to low stock stores, etc. But not stopping NY entirely...