AT&T resumes online iPhone sales to New York City residents

Posted:
in iPhone edited January 2014
AT&T has resumed taking iPhone orders from New York City residents through its website after blocking the sale of the handsets to New Yorkers this past weekend for reasons the carrier has been unwilling to explain in detail.



The sales suspension drew hundreds of headlines from technology websites on Monday, fueling suspicions that the move was yet another sign that the exclusive US iPhone carrier was unable to support the brunt of the handset's popularity in dense metropolitan areas.



That sentiment was fueled by a comment from an AT&T online customer service representative by the name of Daphne who told a journalist that the iPhone was no longer available for purchase online by New York City residents "because New York is not ready for the iPhone."



"[Your area doesn't] have enough towers to handle the phone," the rep added.



AT&T's corporate spokespeople would later say the sales blackout was a result of the carrier periodically modifying its promotions and distribution channels, while online service rep Daphne jettisoned her earlier explanation in favor of blaming the move on "increased fraudulent activity" in New York City and the surrounding areas.



In recent months, AT&T has come under fire from customers and larger rival Verizon Wireless, who've combined to charge the carrier in a series of lawsuits and television spots with making false promises regarding the capacity and reach of its mobile 3G network.



The Dallas-based firm has yet to provide a clear explanation for this weekend's sales stoppage.
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Comments

  • Reply 1 of 26
    AT&T didn't want handle the NY/NJ holiday iPhone traffic (or was trying to screw Apple over, which this I highly doubt.)



    The "fraud" and "NY can't handle the iPhone" excuses are ruses. As with fraud you don't cut off all sales, you just report it and don't deliver product. The iPhone only counts for 5% of AT&T total phones on their network, overload my ass. AT&T would love to have more $80 a month customers, even if they use twice as much bandwidth, and dump the $30 a month one's. If AT&T ran out of iPhones, you delay and reorder more from Apple. If the weather is bad you delay or drop ship directly from China.



    There is no excuse to cut off sales to a entire region during peak holiday sales, it's money, you get the money and work things out later. Especially a profitable monthly contract of $80 a month!





    In my opinion Apple wanted as much of the holiday traffic as possible in order to upsell any potential iPhone customer and AT&T couldn't handle volume in NY/NJ, so they made a arrangement. Stop the AT&T online iPhone sales in NY/NJ and that would drive traffic to Apple, either online or in person.



    http://en.wikipedia.org/wiki/Upselling





    It's either that or AT&T's web site was hacked/abused and that region turned off.



    I bet that will be the final lie in this drama.
  • Reply 2 of 26
    The local warehouse was probably out of stock.....had to wait for more to come in. Rumors have it that 4Q was another record quarter for iPhone sales.
  • Reply 3 of 26
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by noexpectations View Post


    The local warehouse was probably out of stock.....had to wait for more to come in. Rumors have it that 4Q was another record quarter for iPhone sales.



    That does seem most likely.
  • Reply 4 of 26
    geekdadgeekdad Posts: 1,131member
    I wonder how it took for them to start selling iPhones after Sir Steve called to say WTF?

  • Reply 5 of 26
    Quote:
    Originally Posted by noexpectations View Post


    The local warehouse was probably out of stock.....had to wait for more to come in. Rumors have it that 4Q was another record quarter for iPhone sales.





    Naw, take the sale, drop ship it directly from China. No need to warehouse.
  • Reply 6 of 26
    Quote:
    Originally Posted by noexpectations View Post


    The local warehouse was probably out of stock.....had to wait for more to come in. Rumors have it that 4Q was another record quarter for iPhone sales.



    Yeah, didn't the East Coast get a dusting of snow recently? Enough to snarl traffic?



    Or maybe the truck got stuck in the Midwest?
  • Reply 7 of 26
    Quote:
    Originally Posted by cvaldes1831 View Post


    Yeah, didn't the East Coast get a dusting of snow recently? Enough to snarl traffic?



    Or maybe the truck got stuck in the Midwest?





    Online orders are shipped to your location. If there is a weather issue it's just delayed delivery.



    You take the sale, even if its fraudulent, as not to kill the majority of the good sales. You can weed the bad ones out later if your overloaded. The criminals don't get squat if you don't deliver, but you get all their info and any victims info too. (stolen cc's etc)



    You don't stop sales to a major region of tens of millions of people unless either your screwing your partner or have a arrangement with them of some sort.



    I suspect AT&T didn't want or couldn't handle the flood of NY/NJ iPhone holiday customers and Apple did want it to increase sales of other items.



    AT&T don't have their story straight, which leads too even more suspicion.
  • Reply 8 of 26
    Quote:
    Originally Posted by MacTripper View Post


    Online orders are shipped to your location. If there is a weather issue it's just delayed delivery.



    I'm guessing that AT&T ships iPhones (or any of its other phones for that matter) to NYC customers from an online order fulfillment center that's based in the area.



    The truck I'm referring to is the one that delivers pallets and pallets of iPhones to the order fulfillment center, not the common carrier trucks (UPS, FedEx) that deliver to the consumer.



    My guess is that the order fulfillment center might have an "out of stock" situation for a couple of days due to a weather-delayed delivery and/or possibly to extremely high demand. The rumors of another blockbuster quarter for iPhone sales would tend to support this possibility.
  • Reply 9 of 26
    Quote:
    Originally Posted by cvaldes1831 View Post


    I'm guessing that AT&T ships iPhones (or any of its other phones for that matter) to NYC customers from an online order fulfillment center that's based in the area.



    The truck I'm referring to is the one that delivers pallets and pallets of iPhones to the order fulfillment center, not the common carrier trucks (UPS, FedEx) that deliver to the consumer.



    My guess is that the order fulfillment center might have an "out of stock" situtation for a couple of days due to a weather-delayed delivery and/or possibly to extremely high demand. The rumors of another blockbuster quarter for iPhone sales would tend to support this possibility.





    I understand, but you still take the order and work out the delivery (or fraud) issues later; the weather clears up, runways and roads cleared of snow, more product gets made, etc. So what if it's delayed a few days or weeks? You got their money (with fraud it could be returned), let them bitch and moan and tell them there's a delay with the weather, people understand.



    Stopping sales to the entire NY/NJ area? Then give a excuse the "network" can't handle the iPhone?



    Jesus, heads are going to roll over that one. That's AT&T puling some bullsh*t on Apple if true.





    If AT&T really can't handle any more iPhones, it's better handled with Apple and together they restrict sales in that region.



    If a customer wants a iPhone and can't get it at AT&T, they go to Apple right? It still gets on AT&T networks anyway!



    So you see how I arrived at my conclusion, especially since AT&T has RE-ENABLED online sales of the iPhone. So it's not a network overload issue at all.



    Apple wanted and AT&T didn't want, the online holiday traffic rush.



    Apple makes more in sales, either online or in house, through exposure to Apple's other items when a potential iPhone customer walks in the store. It's called upselling.



    http://en.wikipedia.org/wiki/Upselling





    According to a article, the iPhone counts for only 5% of AT&T's phones on their network. Overload my ass, AT&T would love to have all it's phone customers paying the high monthly fee's the iPhone commands.



    Heck, I use AT&T and pay only $15 a month. They would love to drop my ass for a $80 a month iPhone customer that uses twice as much bandwidth. They still come out ahead $50 a month.
  • Reply 10 of 26
    Quote:
    Originally Posted by geekdad View Post


    I wonder how it took for them to start selling iPhones after Sir Steve called to say WTF?





    No impact since AT&T knows it will not be the exclusive carrier and Sir Steve will be taking his iPhone to other US carriers...
  • Reply 11 of 26
    I am wondering when it became a requirement to explain yourself every move you make.



    Probably not the best answers, and the phone bank should be trained to not say anything. I have had several comments made to me from AT&T phone staff about their dislike of the relationship.
  • Reply 12 of 26
    Quote:
    Originally Posted by geekdad View Post


    I wonder how it took for them to start selling iPhones after Sir Steve called to say WTF?





    I could see someone in Apple probably did ask questions about this.
  • Reply 13 of 26
    Quote:
    Originally Posted by MacTripper View Post


    Apple wanted and AT&T didn't want, the online holiday traffic rush.



    I don't understand this. If AT&T really didn't want an online sales rush (which is a rather blasphemous idea during a struggling economic recovery), they would have shut down the system nationwide. That wasn't the case. It's not like New Yorkers are going to buy vastly more iPhones than people in L.A., Chicago, S.F., Boston, etc.



    Also, this localized outage actually took place this weekend, after the holiday. Christmas was Friday.



    No, if you apply Occam's Razor, it appears that the local metro NY order fulfillment center probably had an "out of stock" situation, whether it had to do with strong sales and/or a delay replenishment shipment.



    Whatever this Daphne person or the PR mouthpiece said was inconsequential. You don't think the AT&T people would really admit that they "ran out because we didn't realize how popular the iPhone is"? That would make them sound like even bigger idiots.
  • Reply 14 of 26
    Quote:
    Originally Posted by cvaldes1831 View Post


    I don't understand this. If AT&T really didn't want an online sales rush (which is a rather blasphemous idea during a struggling economic recovery), they would have shut down the system nationwide. That wasn't the case.





    No they restricted sales of the iPhone to the NYC/NJ area, which leads many to believe it's a network overload issue in that area. If that was the case, AT&T would have have Apple also stop selling iPhones in that area.



    Quote:

    Also, this localized outage actually took place this weekend, after the holiday. Christmas was Friday.



    Are you sure it wasn't before as well?, we only know about it now.



    Quote:

    No, if you apply Occam's Razor, it appears that the local metro NY order fulfillment center probably had an "out of stock" situation, whether it had to do with strong sales and/or a delay replenishment shipment.



    Yes but being 'out of stock' is a typical business problem, you still make the sale and wait for more inventory or let Apple iron out the issues by moving around stock from a slow sales area.



    Also if you have anything delivered from Apple before, you know it sometimes comes directly from China. AT&T can easily give the order to Apple, Apple drop ships it to your location, you take it in to a AT&T store for the activation. Online orders are shipped anyway, what difference does it make where it comes from Cupertino, Texas, a China factory or a warehouse in NY state?



    With local retail stores you need a local warehouse and inventory, with online sales you do not. It's shipped anyway and from anywhere, understand?







    Quote:

    Whatever this Daphne person or the PR mouthpiece said was inconsequential.



    I agree, they are told what to say, unless this person spoke her mind about AT&T can't handle the iPhone, then she's in very hot water, thus the changed story. Or another lie by management to cover up the first one. Which now they are in hot water because nobody believes them.





    Quote:

    You don't think the AT&T people would really admit that they "ran out because we didn't realize how popular the iPhone is"? That would make them sound like even bigger idiots.





    Cutting off sales to tens of millions of people because they ran out of stock certainly would make them idiots. Especially since the inventory delay would only be a few weeks at most and Apple can drop ship directly from China overnight if need be.



    Think for a minute, AT&T makes $80 a month gross from a 2 year iPhone contract, think they really just decide to cut off tens of millions of people because they ran out of inventory? Not.



    Cutting off all sales because of fraud is also being very idiotic, as you can't get the good customers out of the bunch and drop the bad ones.



    It could be that the AT&T website was hacked...
  • Reply 15 of 26
    Quote:
    Originally Posted by MacTripper View Post


    No they restricted sales of the iPhone to the NYC/NJ area, which leads many to believe it's a network overload issue in that area. If that was the case, AT&T would have have Apple also stop selling iPhones in that area.

    (post truncated for legibility)



    Apple did not stop selling in the NY area, neither online nor in their bricks-and-mortars stores. Besides, don't the Apple Stores (online + bricks-and-mortar) sell more iPhones than AT&T stores? Also, there is no evidence that other online retailers (I think you can buy them at Best Buy, maybe Walmart?) were instructed to halt NY iPhone sales.



    My guess is that AT&T iPhone sales can't drop ship from China.



    AT&T pays Apple a subsidy every time an iPhone is actually activated but Apple is probably selling the device at a wholesale price to their channel partners.



    AT&T buys the hardware from Apple and then resells in a traditional channel sales scenario. That way, AT&T's inventory becomes AT&T's liability, not Apple's. It's up to AT&T to manage supply to their retail operations, not Apple. Same with Amazon, Best Buy, Walmart, etc. Note that carrying inventory is a great motivator in encouraging sales.



    It is very curious that AT&T yanked the iPhone from the NY online customers, rather than simply indicate a delayed order fulfillment date.
  • Reply 16 of 26
    Quote:
    Originally Posted by cvaldes1831 View Post


    It is very curious that AT&T yanked the iPhone from the NY online customers, rather than simply indicate a delayed order fulfillment date.





    My thoughts exactly.



    Why wasn't things done up front like normal in cases like this?







    If it was a network overload issue, the ban would have stayed in effect. But now AT&T has re-enabled online iPhone sales to the affected region. So it's not that.





    The BS spilled by the customer service rep that the iPhone wasn't available in NY could have been a attempt to salvage a sale, she likely gets a commission. So she lies and sells anything she can after realizing the affected region was indeed not available for the iPhone. She was going by what her computer was telling her.





    It could be the AT&T site was hacked or a employee turned the affected region off maliciously, either with upper management approval or not.





    It's hard to find who and what's at fault here without more evidence. AT&T and Apple would both benefit in some fashion, AT&T would sell another phone and Apple would have sold a iPhone through it's online store with the chance to upscale, depending upon the tenacity of the customer.



    I don't think AT&T would purposely pull such a stunt, Apple would have them by their balls.



    So I suspect collusion.
  • Reply 17 of 26
    quinneyquinney Posts: 2,524member
    Any order/inventory system has to be coded to do something when it detects an out-of-stock condition. Returning a message to the customer telling them that the package is not available in their area seems entirely reasonable to me. I think it is quite possible that nobody yanked anything and that there was no nefarious intent in the NY/NJ online orders not going through. The only thing questionable is all the stories AT&T allegedly told to explain the denied orders. Either they don't want to admit that nobody was monitoring the inventory situation over the weekend, or they really do have their heads up their asses.
  • Reply 18 of 26
    Quote:
    Originally Posted by quinney View Post


    Any order/inventory system has to be coded to do something when it detects an out-of-stock condition. Returning a message to the customer telling them that the package is not available in their area seems entirely reasonable to me. I think it is quite possible that nobody yanked anything and that there was no nefarious intent in the NY/NJ online orders not going through. The only thing questionable is all the stories AT&T allegedly told to explain the denied orders. Either they don't want to admit that nobody was monitoring the inventory situation over the weekend, or they really do have their heads up their asses.





    If AT&T is not making 2 year, $80 a month, highly profitable iPhone online sales contracts because they temporary ran out of inventory, which can be filled in a few days or weeks, then they truly have their heads up their collective asses.



    It might very well be that Apple has a physical arrangement with AT&T, they only get and can sell what Apple gives them a ahead of time. If that's the case, then Apple has their collective head up their asses too. Because AT&T is selling other phones instead of theirs.



    But Apple and AT&T might have a arrangement along those lines, like AT&T has a contract with other phone makers to sell a certain amount of their products and Apple is going along with it by reducing inventory.



    Only Cupertino and Dallas heads know what the real deal is.
  • Reply 19 of 26
    Wow! They really added more towers fast!
  • Reply 20 of 26
    Quote:
    Originally Posted by MacTripper View Post


    It might very well be that Apple has a physical arrangement with AT&T, they only get and can sell what Apple gives them a ahead of time. If that's the case, then Apple has their collective head up their asses too. Because AT&T is selling other phones instead of th...

    (post truncated for legibility)



    Most likely Apple decides how many units they will allocate out to a given market/channel partner based on their manufacturing partner's production capacity. We know for a fact that iPhone 3GS supplies were constrained in the first few months of production.



    Let's say the factory can produce 10 million iPhones this quarter. Apple tells AT&T that they can have 100,000 units, Best Buy and Radio Shack can have 50,000 units, etc.



    AT&T plans according, distributing their 100,000 units across the country, but somehow they fell a little short at the NYC warehouse. Maybe there's a couple thousand extras in some Dallas warehouse that they tried to transfer over, but due to inclement weather, poor planning, etc., the truck missed delivering these pallets on Thursday afternoon (the 24th) and thus had to wait until this morning (Monday the 28th), thus causing an 'out of stock' situation.



    We'll never know for sure since most of these companies won't disclose details of their internal operations.



    Let's suffice it to say that based on AT&T's previous behavior, it isn't so far-fetched to see that their business acumen doesn't extend to Just In Time inventory management.
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