Is Apple being just a tad too careful about not overbuilding for its launches of late? It kind of falls into step with their overly conservative guidance.
And if Apple is guilty of being too conservative on its builds, isn't that kind of purposefully creating a shortage?
Do you really think a million per month is too conservative to the point of guilt? Hindsight is easy, would a sane person really think that in foresight?
Let's give some credit where it is due here. Tablets were a tough sell, they've been around for over a decade and a half. No one else has been able to get wide consumer acceptance, it was the domain of enthusiasts and a few professional niches. I recall analysts have pegged the combined market for tablet computers this year to be about 3-3.5 million. Apple has already hit that ballpark with just their own product in only three months, and there are still just over five months left in the year. With more still rolling out in new countries. I would hate to be involved in the logistics of keeping production lines supplied.
What happened to the response "are you nuts?". That seemed like a better answer to the suggestion that Apple creates a shortage for hype. They are having to crank out 1 million phones a week. That's hard for any single company to maintain.
Correct. Now imagine having to crank out 52 million iPhones, per year. That would require new manufacturing. Perhaps the US should see an opportunity to bring it home?
Well, Apple doesn't "officially" create product shortages, but they continually underestimate consumer demand at every single product launch which is basically the same thing. Had they waited to launch the iPhone 4 another month everyone would have received one.
Correct. Now imagine having to crank out 52 million iPhones, per year. That would require new manufacturing. Perhaps the US should see an opportunity to bring it home?
I really wish people would stop with the "Apple should just start manufacturing in the U.S." stuff.
I believe strongly in U.S. manufacturing and do my best to buy American (I paid over 3x for a patio table to get an American one. I spent weeks looking for a good American fishing rod. I quit a job because it was clear that upper management was driving for us to import everything from China). But it's not an arbitrary decision to manufacture in the U.S. A company can't just say "we're going to manufacture in the U.S.").
The entire infrastructure is stacked against U.S. manufacturing. Materials costs are higher here. Labor is vastly higher (even non-union shops. If you've got Union employees, the difference is astronomical). Environmental laws drive up the price. Legal issues. Insurance costs. Taxes. Rent. Everything is much, much higher in the U.S. Exchange rates favor imports. For some products, manufacturing in the U.S. could double your costs - or more.
There are a few businesses where it can make sense - if you manage it properly. But for something like a phone being manufactured in the tens of millions, it's not going to happen - until the infrastructure changes. Write to your Congressman and Senators. Where you can, buy American. And stay away from Walmart (about 1/2 of everything on their shelves is imported, most of that from China).
If the playing field is leveled, there's a chance for U.S. manufacturing to make a comeback. But in the current environment, it's suicide for most high volume consumer goods manufacturers.
Working for AT&T I can tell you making artificial demand, Would not be a good idea, iv seen customers been talked in to other phones due to fear of a 3 week wait. Esp the one who have a damaged phone and need something now
It's hard to believe some jackass would seriously ask a question like that and even expect an honest answer. A lot of companies must be trying to create a lot of hype lately. Even the Android smartphones (HTC EVO and DroidX) are experiencing delays so that must mean that are trying to copy Apple by creating more product hype. What company would be stupid enough to hold back products when people are standing there with cash in hand? I must admit, iHaters are a truly stupid breed of humans.
In my opinion, there is no reason why there should be a shortage. Apple can simply release the phone later in the year when they have produced enough to supply the demand. Instead, it chooses to release the phones when it hasn't produced enough. If the white iphone is not available until a month after the other iphone is released, it shouldn't be announced. That is hype, artificial hype. But that's what apple does and what makes it so successful.
And if Apple is guilty of being too conservative on its builds, isn't that kind of purposefully creating a shortage?
I don't think so. Manufacturing capacity is expensive, and I'm sure Apple's manufacturers will have clauses in the contracts that holds Apple to buying a certain number per month so they can justify the capital spend to make that capacity. If Apple planned to build way more than they could sell, they would end up with a bunch of product sitting in warehouses that has to be written down in the accounts each quarter.
Along with that, Apple are more than likely to base their capacity requirements on what they think the ongoing demand will be, not the demand in the first few weeks/months when demand is bound to be higher than an ongoing basis. There is no point in paying a fortune to have capacity for say, 5 million phones per week, if that's only going to be the demand for the first 4 weeks, then demand is going to be 1 million per week. You'd then have capacity to build 4 million per week sat doing nothing - very wasteful.
In my opinion, there is no reason why there should be a shortage. Apple can simply release the phone later in the year when they have produced enough to supply the demand. Instead, it chooses to release the phones when it hasn't produced enough. If the white iphone is not available until a month after the other iphone is released, it shouldn't be announced. That is hype, artificial hype. But that's what apple does and what makes it so successful.
I don't want to repeat what I wrote just above, but this is similar to just producing too many. Once you've made something, you've effectively paid for it and if it's just sat on a shelf, it's like having money under the mattress rather than in the bank earning interest (though I concede I'd be better off had I stuck my money under the mattress over the past 3 years!)
Apple is lying or else must be the worst supplier ever seen. If Apple is not creating artificial shortages why do they release it much later in other countries and start of with a handful of copies. In Belgium only a few could get a hand on the iPhone 3G and 3GS for months, so why not start selling when you have enough supply. You should think Apple would have learned from previous rollouts but no, again in Belgium there will be only a very limited supply of iPhones available. In the Netherlands the pre-sale was already halted after a few hours which just shows Apple is doing the same shit as they did with previous releases! The iPhone is the only product that I know that get's rolled out in such small quantities except for limited edition stuff.
If we can't even order an iPhone 4 how would they know how much they need to build.
If they're not creating shortages, then explain this. Forget the major products....why is a company with the resources (read cash) of Apple UNABLE to keep SIMPLE accessories available? Even from the Apple store (online) there are intolerable delays in Apple iPad cases and camera connector kits!!!
I'm an SPR certified Apple Specialist and my store has seen 3 cases and five connector kits (before this week)
The entire infrastructure is stacked against U.S. manufacturing. Materials costs are higher here. Labor is vastly higher (even non-union shops. If you've got Union employees, the difference is astronomical). Environmental laws drive up the price. Legal issues. Insurance costs. Taxes. Rent. Everything is much, much higher in the U.S. Exchange rates favor imports. For some products, manufacturing in the U.S. could double your costs - or more.
I guess for the cars Toyota, Honda, etc. make, the costs must be *really* prohibitive in Japan (although they also have shipping it across the Pacific Ocean). My Ford/Mazda is made in Michigan, but mostly because it's really a Ford Fusion tricked out right (unlike a Pontiac G6 I drove recently). Remember, folks, *Japan* is also sending a bunch of manufacturing to China, too.
One of the oddly Apple kept secrets is their pre-shpping product testing (and, yes, you folks with the DOA units wonder about it). If they could be more like Dell (no post assembly testing), they could shovel junk like they do out the door in greater volume.
While on the subject of phones, why are U.S. analysts projecting increased sales if Apple adds someone else other than AT&T? If they aren't producing enough *now*, how could they fill that *additional* demand?!
Apple has never produced an overstock of anything in the past 13 years.
Quote:
Originally Posted by PaulMJohnson
I don't want to repeat what I wrote just above, but this is similar to just producing too many. Once you've made something, you've effectively paid for it and if it's just sat on a shelf, it's like having money under the mattress rather than in the bank earning interest (though I concede I'd be better off had I stuck my money under the mattress over the past 3 years!)
The trouble with conspiracy theories is that they are not logical so there is no way to refute them.
And how many products is Apple currently selling vs how many have 4 week lead times?
And where is the data on how long after product launch before lead times shrink to 3 days?
and where are those who believe artificial constraint on the day that whichever product reaches a 2 to 3 day lead time apologizing for being wrong?
And what about folks concerned about pay rates and suicide rates in Chinese factories? what if double the production meant a 50% pay cut for all workers and resulted in a 20% increase in suicides? would you then be thanking Apple for supplying your demand for what is a luxury item? or at least a luxury version of what has become a necessity for many?
And regarding launch date vs available units and other countries etc. Perhaps Apple should announce the product the day the first component starts down the assembly line and then suppose they can produce 60,000 units a day - then you would have a week before the first unit shipped and only 180,000 sold in the first 3 days.
Whereas what they really did was likely more along the lines of 60,000 a day for 30 days leading up to launch day meaning 1.8 million available on day one (including demo units for the stores etc) and 1.7 million sold on day one - but then only 60,000 a day thereafter - or 21 million or so in a year - perhaps with plans to ramp up production as demand is gauged and for availability in more countries.
I would understand if Apple made, let's say, 350 iPads over the course of 6 weeks when they know they have at least 3 million drooling customers. That would definitely be "under-estimating demand."
When they're cranking out 3.5 million iPads, does the fact that 4 million people want them constitute artificially-created demand?
Then how do you explain Apple's pricing strategy for their Mac computers, and their refusal to build the so called "mid range minitower" that so many people want? Doesn't Apple want to sell Macs to people who are interested in buying them? Isn't Apple just "working against themselves" and "hurting potential sales", as you put it?
But the typical response when it comes to Mac models and pricing is the inevitable car analogies and comparisons of Rolls Royce vs Pinto, how BMW doesn't care if not everybody gets to have one of their cars, etc.
While I totally want to see a mini tower, this comparison doesn't make any sense to me.
First, choosing to sell a particular model or not is entirely different than selling a product but intentionally not producing enough to meet demand.
And second, the main reason Apple doesn't sell a mini tower is because they want people to buy one of the other mac models instead - adding another model could cannibalize sales of the existing models (which I don't agree with, but it's still a motivation for them whether it's true or not), a situation that doesn't exist with the iPhone.
Quote:
Originally Posted by Blackintosh
If that's what you need to believe in order to justify your Kool Aid induced fantasies.
If you have an argument that Apple DID create an artificial shortage, I'd love to hear it. Defending the notion without anything to back it up doesn't exactly win you credibility.
Quote:
Originally Posted by Sacto Joe
And if Apple is guilty of being too conservative on its builds, isn't that kind of purposefully creating a shortage?
Not at all. That would only be the case if they had magic powers and could see the future. As it is, they make their best guess how many they will sell, and if they overestimate, there are negative financial consequences. There are legitimate reasons to be conservative on estimates of future sales other than "create fake shortage".
Quote:
Originally Posted by bdkennedy1
Well, Apple doesn't "officially" create product shortages, but they continually underestimate consumer demand at every single product launch which is basically the same thing. Had they waited to launch the iPhone 4 another month everyone would have received one.
Not the same thing at all. And had they waited another month to release, they would have had a million or more units ready to ship but instead sit on them for a month - that seems way more "artificial" than what they are doing which is sell them as fast as they can make them.
Quote:
Originally Posted by eehd
In my opinion, there is no reason why there should be a shortage. Apple can simply release the phone later in the year when they have produced enough to supply the demand. Instead, it chooses to release the phones when it hasn't produced enough. If the white iphone is not available until a month after the other iphone is released, it shouldn't be announced. That is hype, artificial hype. But that's what apple does and what makes it so successful.
So you're saying they should spend billions manufacturing phones, then let them sit in a warehouse for months instead of selling them and making their money back? Terrible idea from a financial standpoint not to mention that product innovation is key and the earlier a product can ship, the bigger the advantage.
Comments
Is Apple being just a tad too careful about not overbuilding for its launches of late? It kind of falls into step with their overly conservative guidance.
And if Apple is guilty of being too conservative on its builds, isn't that kind of purposefully creating a shortage?
Do you really think a million per month is too conservative to the point of guilt? Hindsight is easy, would a sane person really think that in foresight?
Let's give some credit where it is due here. Tablets were a tough sell, they've been around for over a decade and a half. No one else has been able to get wide consumer acceptance, it was the domain of enthusiasts and a few professional niches. I recall analysts have pegged the combined market for tablet computers this year to be about 3-3.5 million. Apple has already hit that ballpark with just their own product in only three months, and there are still just over five months left in the year. With more still rolling out in new countries. I would hate to be involved in the logistics of keeping production lines supplied.
What happened to the response "are you nuts?". That seemed like a better answer to the suggestion that Apple creates a shortage for hype. They are having to crank out 1 million phones a week. That's hard for any single company to maintain.
Correct. Now imagine having to crank out 52 million iPhones, per year. That would require new manufacturing. Perhaps the US should see an opportunity to bring it home?
Correct. Now imagine having to crank out 52 million iPhones, per year. That would require new manufacturing. Perhaps the US should see an opportunity to bring it home?
I really wish people would stop with the "Apple should just start manufacturing in the U.S." stuff.
I believe strongly in U.S. manufacturing and do my best to buy American (I paid over 3x for a patio table to get an American one. I spent weeks looking for a good American fishing rod. I quit a job because it was clear that upper management was driving for us to import everything from China). But it's not an arbitrary decision to manufacture in the U.S. A company can't just say "we're going to manufacture in the U.S.").
The entire infrastructure is stacked against U.S. manufacturing. Materials costs are higher here. Labor is vastly higher (even non-union shops. If you've got Union employees, the difference is astronomical). Environmental laws drive up the price. Legal issues. Insurance costs. Taxes. Rent. Everything is much, much higher in the U.S. Exchange rates favor imports. For some products, manufacturing in the U.S. could double your costs - or more.
There are a few businesses where it can make sense - if you manage it properly. But for something like a phone being manufactured in the tens of millions, it's not going to happen - until the infrastructure changes. Write to your Congressman and Senators. Where you can, buy American. And stay away from Walmart (about 1/2 of everything on their shelves is imported, most of that from China).
If the playing field is leveled, there's a chance for U.S. manufacturing to make a comeback. But in the current environment, it's suicide for most high volume consumer goods manufacturers.
And if Apple is guilty of being too conservative on its builds, isn't that kind of purposefully creating a shortage?
I don't think so. Manufacturing capacity is expensive, and I'm sure Apple's manufacturers will have clauses in the contracts that holds Apple to buying a certain number per month so they can justify the capital spend to make that capacity. If Apple planned to build way more than they could sell, they would end up with a bunch of product sitting in warehouses that has to be written down in the accounts each quarter.
Along with that, Apple are more than likely to base their capacity requirements on what they think the ongoing demand will be, not the demand in the first few weeks/months when demand is bound to be higher than an ongoing basis. There is no point in paying a fortune to have capacity for say, 5 million phones per week, if that's only going to be the demand for the first 4 weeks, then demand is going to be 1 million per week. You'd then have capacity to build 4 million per week sat doing nothing - very wasteful.
In my opinion, there is no reason why there should be a shortage. Apple can simply release the phone later in the year when they have produced enough to supply the demand. Instead, it chooses to release the phones when it hasn't produced enough. If the white iphone is not available until a month after the other iphone is released, it shouldn't be announced. That is hype, artificial hype. But that's what apple does and what makes it so successful.
I don't want to repeat what I wrote just above, but this is similar to just producing too many. Once you've made something, you've effectively paid for it and if it's just sat on a shelf, it's like having money under the mattress rather than in the bank earning interest (though I concede I'd be better off had I stuck my money under the mattress over the past 3 years!)
If we can't even order an iPhone 4 how would they know how much they need to build.
I'm an SPR certified Apple Specialist and my store has seen 3 cases and five connector kits (before this week)
UNBELIEVABLE!!!
Frankrac
they sell frackin' millions of devices in a typical month. It's hard to build much more.
amen!!!
The entire infrastructure is stacked against U.S. manufacturing. Materials costs are higher here. Labor is vastly higher (even non-union shops. If you've got Union employees, the difference is astronomical). Environmental laws drive up the price. Legal issues. Insurance costs. Taxes. Rent. Everything is much, much higher in the U.S. Exchange rates favor imports. For some products, manufacturing in the U.S. could double your costs - or more.
I guess for the cars Toyota, Honda, etc. make, the costs must be *really* prohibitive in Japan (although they also have shipping it across the Pacific Ocean). My Ford/Mazda is made in Michigan, but mostly because it's really a Ford Fusion tricked out right
One of the oddly Apple kept secrets is their pre-shpping product testing (and, yes, you folks with the DOA units wonder about it). If they could be more like Dell (no post assembly testing), they could shovel junk like they do out the door in greater volume.
While on the subject of phones, why are U.S. analysts projecting increased sales if Apple adds someone else other than AT&T? If they aren't producing enough *now*, how could they fill that *additional* demand?!
I don't want to repeat what I wrote just above, but this is similar to just producing too many. Once you've made something, you've effectively paid for it and if it's just sat on a shelf, it's like having money under the mattress rather than in the bank earning interest (though I concede I'd be better off had I stuck my money under the mattress over the past 3 years!)
And how many products is Apple currently selling vs how many have 4 week lead times?
And where is the data on how long after product launch before lead times shrink to 3 days?
and where are those who believe artificial constraint on the day that whichever product reaches a 2 to 3 day lead time apologizing for being wrong?
And what about folks concerned about pay rates and suicide rates in Chinese factories? what if double the production meant a 50% pay cut for all workers and resulted in a 20% increase in suicides? would you then be thanking Apple for supplying your demand for what is a luxury item? or at least a luxury version of what has become a necessity for many?
And regarding launch date vs available units and other countries etc. Perhaps Apple should announce the product the day the first component starts down the assembly line and then suppose they can produce 60,000 units a day - then you would have a week before the first unit shipped and only 180,000 sold in the first 3 days.
Whereas what they really did was likely more along the lines of 60,000 a day for 30 days leading up to launch day meaning 1.8 million available on day one (including demo units for the stores etc) and 1.7 million sold on day one - but then only 60,000 a day thereafter - or 21 million or so in a year - perhaps with plans to ramp up production as demand is gauged and for availability in more countries.
I would understand if Apple made, let's say, 350 iPads over the course of 6 weeks when they know they have at least 3 million drooling customers. That would definitely be "under-estimating demand."
When they're cranking out 3.5 million iPads, does the fact that 4 million people want them constitute artificially-created demand?
Then how do you explain Apple's pricing strategy for their Mac computers, and their refusal to build the so called "mid range minitower" that so many people want? Doesn't Apple want to sell Macs to people who are interested in buying them? Isn't Apple just "working against themselves" and "hurting potential sales", as you put it?
But the typical response when it comes to Mac models and pricing is the inevitable car analogies and comparisons of Rolls Royce vs Pinto, how BMW doesn't care if not everybody gets to have one of their cars, etc.
While I totally want to see a mini tower, this comparison doesn't make any sense to me.
First, choosing to sell a particular model or not is entirely different than selling a product but intentionally not producing enough to meet demand.
And second, the main reason Apple doesn't sell a mini tower is because they want people to buy one of the other mac models instead - adding another model could cannibalize sales of the existing models (which I don't agree with, but it's still a motivation for them whether it's true or not), a situation that doesn't exist with the iPhone.
If that's what you need to believe in order to justify your Kool Aid induced fantasies.
If you have an argument that Apple DID create an artificial shortage, I'd love to hear it. Defending the notion without anything to back it up doesn't exactly win you credibility.
And if Apple is guilty of being too conservative on its builds, isn't that kind of purposefully creating a shortage?
Not at all. That would only be the case if they had magic powers and could see the future. As it is, they make their best guess how many they will sell, and if they overestimate, there are negative financial consequences. There are legitimate reasons to be conservative on estimates of future sales other than "create fake shortage".
Well, Apple doesn't "officially" create product shortages, but they continually underestimate consumer demand at every single product launch which is basically the same thing. Had they waited to launch the iPhone 4 another month everyone would have received one.
Not the same thing at all. And had they waited another month to release, they would have had a million or more units ready to ship but instead sit on them for a month - that seems way more "artificial" than what they are doing which is sell them as fast as they can make them.
In my opinion, there is no reason why there should be a shortage. Apple can simply release the phone later in the year when they have produced enough to supply the demand. Instead, it chooses to release the phones when it hasn't produced enough. If the white iphone is not available until a month after the other iphone is released, it shouldn't be announced. That is hype, artificial hype. But that's what apple does and what makes it so successful.
So you're saying they should spend billions manufacturing phones, then let them sit in a warehouse for months instead of selling them and making their money back? Terrible idea from a financial standpoint not to mention that product innovation is key and the earlier a product can ship, the bigger the advantage.