Am I the only one who believes this product shortage reflects badly on Tim Cook, the Apple COO?
How many consecutive Apple product launches have involved shortages? That's revenue not collected. Why do they consistently under-produce?
No company has ever dealt with consistently super successful product launches like this before either. When you're pushing the manufacturing limits from day one it is hard to plan. iPad sold 300k at launch. Gossip is 500k to 1M units for iPad2 launch, if true how can Apple 1) anticipate that growth 2) manufacture to that huge growth in demand when Apple tried but couldn't mfg the original iPad in sufficient quantity over the prior year at lower volumes.
Xoom HOPES to sell 300k units in a quarter and Apple appears to have sold much more than that number at launch.
Just wanna mention, that the analyst numbers/predictions are almost squarly focused on the "consumer demand" and retail line-ups. Most are thoroughly missing the enterprise uptake of this device, and recognizing that the iPad 1 & 2 is the only serious device to consider at the moment.
Last years sell-thru totals are almost without a doubt 25-30%* "enterprise/small-business" adoption and testing for future large roll-outs, which many businesses decided to wait for until iPad 2 (justified IMO). *Anybody with any solid numbers?
This puts an incredible strain on Apple to keep the stores stocked, but also to be able to ship in quantity to businesses ASAP. Apple surely recognizes the value of both contingents, and is probably juggling a massive Catch-22 situation:
a) get the iPad 2 into the hands of the consumer ASAP for word of mouth advert; and
b) ship the quantities requested by business entities that have already made a serious (and to not be taken lightly this time around) commitment to Apple's mobile platform.
The marketing conspiracy theories are quite silly. As I've written here in a number of posts since the iPad2 presentation, Apple's biggest problem through out the year will be production capacity.
Planning and logistics is not my specialty, however I am quite aware of it's micro-problems becoming major headaches (mostly from print-production/packaging experience).
I just can't even comprehend this though in regards to Apple and their products. If you sit down for a second and think about it... the oncoming migraine is surely better than actually having to deal with the logistics first-hand.
And BTW: this is absolutely nothing in comparison to what we're going to see when iPhone5 and iOS 5 hit the scene in the summer.
In regards to the Enterprise/Business adoption that I'm personally involved in with Apple mobile devices here in Germany, I just wanted to note:
I've said before, and I will again: RIM is over by the end of the year; PlayBook will bomb seriously.
unless Google shows Chrome OS soon, they will also be left out of the biz sector, at least for quite a while.
MSFT is waiting for quad-core ARM chips to push a hybrid desktop/mobile experience for mobile... I think it's too late. Good news (for them?), is that they're in parallel, looking at becoming a serious iOS App developer.
No matter what hardware the assorted manufacturers pull together and put Android on, it will not sell even close to the volume (combined!) of the integrated iOS/Apple approach. Main reason from a small business point of view, is the easy development of biz-specific apps, that run on ALL iOS devices equally well. We're seeing 50% reduced IT development, training, and support costs, and expect that savings curve to go quite a bit higher even.
Due to the above, I know my clients aren't even looking at anything other than iOS devices, and as I have mentioned in many posts before, they are slowly but very deliberately, replacing Windows desktops/notebooks with Mac products... where they are also seeing large productivity gains and ROI. An overlooked part of the reason (enterprise/small biz adoption), why we continue to see Mac OS products outselling all the others quarter after quarter.
The Halo-effort perfectly orchestrated and defined. Probably a good 90% of all business people I know here, or have come into contact with at trade shows, have an iPhone. For the majority, it was the first Apple product they've ever owned.
Sorry this was a bit off-topic, but it DOES relate to our need here in Germany and Europe, that Apple respect their stated launch dates. Especially since, that while my biz/clients are small potatoes, my high-up "carrier" drinking buddies and contacts, incl. a few well placed consultants in health care, are depending on Apple to come through. To a man (one woman to be fair), we've been Apple's best marketing department. It would be a shame if our logistics get screwed because of theirs.
Whatever... we'll all just wait it out if it happens. How funny, considering where Apple was in the minds of biz-people just 4 short years ago: they weren't... "Apple?"...
Well, if (a big "if") Apple is building up stock for the international launches (and does not delay them), this could indirectly support Gruber's sources indicating an iPad 3 in late 2011.
I don't think that was genuine information. Was't it just economic speculation that the lead up to Christmas is generally a peak purchasing time and therefore a good time to launch a new product if you want quick market penetration?
I think Apple products are generally seen as a "destination" purchase by most consumers. It probably doesn't really matter when they get released because people save up and buy exactly what they want rather than make do with what they can afford. And they also have an interest in padding out their whole year with new releases to keep people engaged. A year between releases seems to be the sweet spot for those who want to upgrade every time. And it's also not too far between releases for folks who decide they want to skip a generation.
I don't have a business or marketing degree but I have a theory that Apple standardises their offerings partly so they can do something I call "Purchaser Polling". If factors like time of the year and time since last update are standardised Apple can actually quantify how much consumers value the new features in a product update just by looking at the sales figures (probably even more accurately than Q&A polling which measures opinions rather than behaviour).
Take for example the White Macbook and the base model Macbook Air. Isn't it curious that both products are priced at exactly the same price point in every single market - despite being released during May and October of 2010 respectively (when currency exchange rates were presumably very different)?
By offering two products with vastly different feature sets at exactly the same price Apple is posing every customer with the question: "Do you value form factor, aluminium finish, performance and pixel density (Macbook Air) more than you value storage capacity, legacy ports and access to CD/DVD media (Macbook)?"
I think Steve is keeping a close eye on the sales figures of those two products in particular. When the sales ratio reaches a certain critical point expect him to declare that mechanical, platter-based media, such as DVD's and Hard drives, are dead and solid state memory is the new hotness and standard in every mac.
In an effort to consolidate the different status tracking information for the anxious iPad 2 fans, who are speculating about the current shipping timelines, and whether certain models of the iPad are shipping faster than others, or to figure out a trend of shipping times based on actual submitted, and hopefully, received orders, the following website offers such a service in a seamless user-friendly manner.
All one has to do is to put their order date, iPad 2 model, and Apple Store estimated shipping dates, and later on, update their information as the status of their shipment gets updated.
Sharing this information, helps hundreds of anxious iPad 2, prospect and current, buyers, to better speculate Apple's store iPad 2 shipment trends, timelines, availability of certain models. In addition this will be your chance to share with us the joy of your success in securing your iPad.
Could it be that the 25th is when the real date for the international launch (and prices, these are still MIA in Australia) is announced, rather than the actual release date...? Just speculating based on experience with iPad 1.
Will Australia be one of the few markets to see a price drop for the iPad 2?
The Australian dollar is 15-20% stronger against the greenback than when the iPad 1 launched.
And the iPad 1 dropped a massive $180 in Australia following the iPad 2 announcement.
US $499 -> US $399
AUD $629 -> AUD $449
My hunch is that the Australian iPad 2 will be priced from $599.
It's a rounder figure than $629 but still leaves a conservative buffer should Apple be concerned about volatile changes to the exchange rate.
Of course the price drop could also be because there was a greater proportion of iPad 1 stock to clear out.
Of course Apple know about scalpers. Why else would they limit purchases to two units per person?
Of course Apple is aware of scalpers, but I don't think that they really care about them, because they're not doing anything to stop them.
The customers standing in line seem to know more about them than Apple does. There are numerous reports of huge numbers of Asians standing in line, being directed by a ring leader walking around with thousands of dollars in cash. I've read about that happening in New York and in San Francisco. And it's obviously happening in other places also. Some Russians have also been doing this in New York.
Maybe Apple should have made cash purchases illegal, like they did last time. No credit card, no iPad. And only 1 purchase per credit card, with the credit card going on file so it can't be used again. Then it would be harder for the scalpers to cheat Apple and screw other customers. And it would be fairer for every normal Apple customer that is not a cheat who is taking hours out of their schedule to stand in line.
Hopefully one of the scalpers walking around with thousands of dollars in their pocket will get robbed. That would be pretty funny and it would lead to more iPads for decent people.
If you think Apple is intentionally withholding supply of the iPad 2, try these steps:
1. Create a revolutionary idea.
2. Turn it into an amazing product that appeals to a wide range of people.
3. Find multiple component sources, arrange logistics with multiple suppliers, shippers, and distribution points, etc.
4. Sell it through thousands of locations.
5. Report back on how easy it is to keep up with demand.
Clearly Apple just needs to flip a switch and deliver more iPad 2s. There is no such thing as manufacturing capacities, logistics, component supply constraints, etc.
I am amazed that any company can deliver so many units of such a high build quality that uses such advanced technology in such a short amount of time. It's astounding.
In reality, if everything was pushed back a month and the original did run out it would have only been for a short while. Announce the new version and put them up for pre-order online. I doubt the anemic competition would have been able to make much hay with the hype and press that would follow Apple's intro...
Right now, shipping times online are FIVE weeks. So say Apple pushed back the intro a full month, and over the course of the weekend, the same people who have ordered online and waited in line bought up those four weeks' supply. They would be right back in the same position that they are in now - a lot (A LOT) of people with new iPads in hand, and a bunch of forum posters complaining that they didn't make enough and should have pushed back the launch date.
The fact is you never know what demand will be until you put them on sale. It doesn't benefit any consumer for Apple to NOT sell a product that they have a million of piling up - there are a lot of people out there who are happy to have their iPad now, even though the vocal crowds don't indicate that. The happy buyers are just that.
I have already book a day off for the arrival of the iPad2 in Canada please don't disappoint me.
thank you
Ottawa mac user
Ditto. Taking Friday morning off. Will be outside Apple store at _________ by 5AM (I'm an early rise so that's normal). Back to work by noon at the latest. Bit of a drive but happy.
Having to wait is one thing, having people line up for hours to be disappointed is another. No doubt, the iPad is a hit and it will sell millions. I just worry about the Apple brand. My belief (and I know many don't agree) is that in small doses these shortages drive excitement, but if they are too frequent I worry about engendering resentment. People (at least in America) want to root for the underdog but all too often they like to see the big guy brought low.
Apple isn't the little guy anymore!
Worry is like a rocking chair ... gives you something to do, but doesn't get you anywhere.
Don't fall for all this crap of limiting supply just to make you want more ... that is just somebody waiting in line that is frustration. Just something to say that has no substance. If you had any experience in manufacturing you would know that Apple is doing everything it can to make these beauties and get them into the hands of waiting customers. You make money selling products that people pay for ... not dangling them on a string to make them frustrated.
iPAD2 is a spectacular product and the competition wishes they had such a problem of delivery and desire.
Given the limited availability and strong demand for the iPad 2 in the U.S. alone, White has questioned whether Apple will have enough supply for an international launch scheduled for March 25. The iPad 2 is set to launch in more than two dozen countries next Friday, though the Japanese launch has been delayed due to the recent earthquake disaster.
Last year, Apple was forced to delay the international launch of the first-generation iPad by a month. Demand for the first-generation device was greater than Apple had anticipated, and the company could not fulfill U.S.-only orders.
THey were NOT forced to delay last year. They choose to. And instead shipped the stock earmarked for that release to US stores. THAT is why they had no stock for the international release.
My guess. They are standing firm on that stock and keeping it for the overseas launch come hell or high water on US complaints. After all, the folks that really want an ipad 2 will wait. Even if a couple of hundred folks like "give me now or I"m buying a Frakking Xoom and I'm never buying anything Apple ever again" (generally an empty threat and Apple knows it)
One thing that is very sketchy about the international launch date. There are no international Apple sites that say "Available March 25th" like the USA site said forthe March 11 launch date. Instead they have a "Get notified" button.
Doesn't this point to an indefinite launch date for the international launch?
One thing that is very sketchy about the international launch date. There no international Apple sites that say "Available March 25th" like the USA site said forthe March 11 launch date. Instead they have a "Get notified" button.
Doesn't this point to an indefinite launch date for the international launch?
The UK Apple site says "Coming 25 March". the Canadian site does too. I would hope Apple are taking notes from the US launch to ensure the international launches go smoothly.
The UK Apple site says "Coming 25 March". the Canadian site does too. I would hope Apple are taking notes from the US launch to ensure the international launches go smoothly.
Okay, I stand corrected - I checked abunch of countries yesterday, including Sweden and the UK, and both still had "Get notified" buttons.
Comments
Am I the only one who believes this product shortage reflects badly on Tim Cook, the Apple COO?
How many consecutive Apple product launches have involved shortages? That's revenue not collected. Why do they consistently under-produce?
No company has ever dealt with consistently super successful product launches like this before either. When you're pushing the manufacturing limits from day one it is hard to plan. iPad sold 300k at launch. Gossip is 500k to 1M units for iPad2 launch, if true how can Apple 1) anticipate that growth 2) manufacture to that huge growth in demand when Apple tried but couldn't mfg the original iPad in sufficient quantity over the prior year at lower volumes.
Xoom HOPES to sell 300k units in a quarter and Apple appears to have sold much more than that number at launch.
Last years sell-thru totals are almost without a doubt 25-30%* "enterprise/small-business" adoption and testing for future large roll-outs, which many businesses decided to wait for until iPad 2 (justified IMO). *Anybody with any solid numbers?
This puts an incredible strain on Apple to keep the stores stocked, but also to be able to ship in quantity to businesses ASAP. Apple surely recognizes the value of both contingents, and is probably juggling a massive Catch-22 situation:
a) get the iPad 2 into the hands of the consumer ASAP for word of mouth advert; and
b) ship the quantities requested by business entities that have already made a serious (and to not be taken lightly this time around) commitment to Apple's mobile platform.
The marketing conspiracy theories are quite silly. As I've written here in a number of posts since the iPad2 presentation, Apple's biggest problem through out the year will be production capacity.
Planning and logistics is not my specialty, however I am quite aware of it's micro-problems becoming major headaches (mostly from print-production/packaging experience).
I just can't even comprehend this though in regards to Apple and their products. If you sit down for a second and think about it... the oncoming migraine is surely better than actually having to deal with the logistics first-hand.
And BTW: this is absolutely nothing in comparison to what we're going to see when iPhone5 and iOS 5 hit the scene in the summer.
- I've said before, and I will again: RIM is over by the end of the year; PlayBook will bomb seriously.
- unless Google shows Chrome OS soon, they will also be left out of the biz sector, at least for quite a while.
- MSFT is waiting for quad-core ARM chips to push a hybrid desktop/mobile experience for mobile... I think it's too late. Good news (for them?), is that they're in parallel, looking at becoming a serious iOS App developer.
- No matter what hardware the assorted manufacturers pull together and put Android on, it will not sell even close to the volume (combined!) of the integrated iOS/Apple approach. Main reason from a small business point of view, is the easy development of biz-specific apps, that run on ALL iOS devices equally well. We're seeing 50% reduced IT development, training, and support costs, and expect that savings curve to go quite a bit higher even.
- Due to the above, I know my clients aren't even looking at anything other than iOS devices, and as I have mentioned in many posts before, they are slowly but very deliberately, replacing Windows desktops/notebooks with Mac products... where they are also seeing large productivity gains and ROI. An overlooked part of the reason (enterprise/small biz adoption), why we continue to see Mac OS products outselling all the others quarter after quarter.
- The Halo-effort perfectly orchestrated and defined. Probably a good 90% of all business people I know here, or have come into contact with at trade shows, have an iPhone. For the majority, it was the first Apple product they've ever owned.
Sorry this was a bit off-topic, but it DOES relate to our need here in Germany and Europe, that Apple respect their stated launch dates. Especially since, that while my biz/clients are small potatoes, my high-up "carrier" drinking buddies and contacts, incl. a few well placed consultants in health care, are depending on Apple to come through. To a man (one woman to be fair), we've been Apple's best marketing department. It would be a shame if our logistics get screwed because of theirs.Whatever... we'll all just wait it out if it happens. How funny, considering where Apple was in the minds of biz-people just 4 short years ago: they weren't... "Apple?"...
1) This is a rumor. Chill out.
2) You seriously think Apple doesn't know/care about scalpers?
Wait. I'm confused by your response. There was nothing hysterical about my post.
Of course Apple know about scalpers. Why else would they limit purchases to two units per person?
Well, if (a big "if") Apple is building up stock for the international launches (and does not delay them), this could indirectly support Gruber's sources indicating an iPad 3 in late 2011.
I don't think that was genuine information. Was't it just economic speculation that the lead up to Christmas is generally a peak purchasing time and therefore a good time to launch a new product if you want quick market penetration?
I think Apple products are generally seen as a "destination" purchase by most consumers. It probably doesn't really matter when they get released because people save up and buy exactly what they want rather than make do with what they can afford. And they also have an interest in padding out their whole year with new releases to keep people engaged. A year between releases seems to be the sweet spot for those who want to upgrade every time. And it's also not too far between releases for folks who decide they want to skip a generation.
I don't have a business or marketing degree but I have a theory that Apple standardises their offerings partly so they can do something I call "Purchaser Polling". If factors like time of the year and time since last update are standardised Apple can actually quantify how much consumers value the new features in a product update just by looking at the sales figures (probably even more accurately than Q&A polling which measures opinions rather than behaviour).
Take for example the White Macbook and the base model Macbook Air. Isn't it curious that both products are priced at exactly the same price point in every single market - despite being released during May and October of 2010 respectively (when currency exchange rates were presumably very different)?
By offering two products with vastly different feature sets at exactly the same price Apple is posing every customer with the question: "Do you value form factor, aluminium finish, performance and pixel density (Macbook Air) more than you value storage capacity, legacy ports and access to CD/DVD media (Macbook)?"
I think Steve is keeping a close eye on the sales figures of those two products in particular. When the sales ratio reaches a certain critical point expect him to declare that mechanical, platter-based media, such as DVD's and Hard drives, are dead and solid state memory is the new hotness and standard in every mac.
-Apologies for going off on a tangent!
Apologies for going off on a tangent!
Interesting tangent, though.
In an effort to consolidate the different status tracking information for the anxious iPad 2 fans, who are speculating about the current shipping timelines, and whether certain models of the iPad are shipping faster than others, or to figure out a trend of shipping times based on actual submitted, and hopefully, received orders, the following website offers such a service in a seamless user-friendly manner.
All one has to do is to put their order date, iPad 2 model, and Apple Store estimated shipping dates, and later on, update their information as the status of their shipment gets updated.
Sharing this information, helps hundreds of anxious iPad 2, prospect and current, buyers, to better speculate Apple's store iPad 2 shipment trends, timelines, availability of certain models. In addition this will be your chance to share with us the joy of your success in securing your iPad.
The website is www.appleordertracker.com
Could it be that the 25th is when the real date for the international launch (and prices, these are still MIA in Australia) is announced, rather than the actual release date...? Just speculating based on experience with iPad 1.
Will Australia be one of the few markets to see a price drop for the iPad 2?
The Australian dollar is 15-20% stronger against the greenback than when the iPad 1 launched.
And the iPad 1 dropped a massive $180 in Australia following the iPad 2 announcement.
US $499 -> US $399
AUD $629 -> AUD $449
My hunch is that the Australian iPad 2 will be priced from $599.
It's a rounder figure than $629 but still leaves a conservative buffer should Apple be concerned about volatile changes to the exchange rate.
Of course the price drop could also be because there was a greater proportion of iPad 1 stock to clear out.
Of course Apple know about scalpers. Why else would they limit purchases to two units per person?
Of course Apple is aware of scalpers, but I don't think that they really care about them, because they're not doing anything to stop them.
The customers standing in line seem to know more about them than Apple does. There are numerous reports of huge numbers of Asians standing in line, being directed by a ring leader walking around with thousands of dollars in cash. I've read about that happening in New York and in San Francisco. And it's obviously happening in other places also. Some Russians have also been doing this in New York.
Maybe Apple should have made cash purchases illegal, like they did last time. No credit card, no iPad. And only 1 purchase per credit card, with the credit card going on file so it can't be used again. Then it would be harder for the scalpers to cheat Apple and screw other customers. And it would be fairer for every normal Apple customer that is not a cheat who is taking hours out of their schedule to stand in line.
Hopefully one of the scalpers walking around with thousands of dollars in their pocket will get robbed. That would be pretty funny and it would lead to more iPads for decent people.
Your logic is very poor.
I wouldn't have thought "very" poor but thanks for taking the time to let me know. I'll be sure to run my thoughts by you before posting next time.
1. Create a revolutionary idea.
2. Turn it into an amazing product that appeals to a wide range of people.
3. Find multiple component sources, arrange logistics with multiple suppliers, shippers, and distribution points, etc.
4. Sell it through thousands of locations.
5. Report back on how easy it is to keep up with demand.
Clearly Apple just needs to flip a switch and deliver more iPad 2s. There is no such thing as manufacturing capacities, logistics, component supply constraints, etc.
I am amazed that any company can deliver so many units of such a high build quality that uses such advanced technology in such a short amount of time. It's astounding.
In reality, if everything was pushed back a month and the original did run out it would have only been for a short while. Announce the new version and put them up for pre-order online. I doubt the anemic competition would have been able to make much hay with the hype and press that would follow Apple's intro...
Right now, shipping times online are FIVE weeks. So say Apple pushed back the intro a full month, and over the course of the weekend, the same people who have ordered online and waited in line bought up those four weeks' supply. They would be right back in the same position that they are in now - a lot (A LOT) of people with new iPads in hand, and a bunch of forum posters complaining that they didn't make enough and should have pushed back the launch date.
The fact is you never know what demand will be until you put them on sale. It doesn't benefit any consumer for Apple to NOT sell a product that they have a million of piling up - there are a lot of people out there who are happy to have their iPad now, even though the vocal crowds don't indicate that. The happy buyers are just that.
Hi Mr.Jobs
I have already book a day off for the arrival of the iPad2 in Canada please don't disappoint me.
thank you
Ottawa mac user
Ditto. Taking Friday morning off. Will be outside Apple store at _________ by 5AM (I'm an early rise so that's normal). Back to work by noon at the latest. Bit of a drive but happy.
Originally Posted by Bageljoey
Having to wait is one thing, having people line up for hours to be disappointed is another. No doubt, the iPad is a hit and it will sell millions. I just worry about the Apple brand. My belief (and I know many don't agree) is that in small doses these shortages drive excitement, but if they are too frequent I worry about engendering resentment. People (at least in America) want to root for the underdog but all too often they like to see the big guy brought low.
Apple isn't the little guy anymore!
Worry is like a rocking chair ... gives you something to do, but doesn't get you anywhere.
Don't fall for all this crap of limiting supply just to make you want more ... that is just somebody waiting in line that is frustration. Just something to say that has no substance. If you had any experience in manufacturing you would know that Apple is doing everything it can to make these beauties and get them into the hands of waiting customers. You make money selling products that people pay for ... not dangling them on a string to make them frustrated.
iPAD2 is a spectacular product and the competition wishes they had such a problem of delivery and desire.
Given the limited availability and strong demand for the iPad 2 in the U.S. alone, White has questioned whether Apple will have enough supply for an international launch scheduled for March 25. The iPad 2 is set to launch in more than two dozen countries next Friday, though the Japanese launch has been delayed due to the recent earthquake disaster.
Last year, Apple was forced to delay the international launch of the first-generation iPad by a month. Demand for the first-generation device was greater than Apple had anticipated, and the company could not fulfill U.S.-only orders.
THey were NOT forced to delay last year. They choose to. And instead shipped the stock earmarked for that release to US stores. THAT is why they had no stock for the international release.
My guess. They are standing firm on that stock and keeping it for the overseas launch come hell or high water on US complaints. After all, the folks that really want an ipad 2 will wait. Even if a couple of hundred folks like "give me now or I"m buying a Frakking Xoom and I'm never buying anything Apple ever again" (generally an empty threat and Apple knows it)
Doesn't this point to an indefinite launch date for the international launch?
One thing that is very sketchy about the international launch date. There no international Apple sites that say "Available March 25th" like the USA site said forthe March 11 launch date. Instead they have a "Get notified" button.
Doesn't this point to an indefinite launch date for the international launch?
The UK Apple site says "Coming 25 March". the Canadian site does too. I would hope Apple are taking notes from the US launch to ensure the international launches go smoothly.
The UK Apple site says "Coming 25 March". the Canadian site does too. I would hope Apple are taking notes from the US launch to ensure the international launches go smoothly.
Okay, I stand corrected - I checked abunch of countries yesterday, including Sweden and the UK, and both still had "Get notified" buttons.
Okay, I stand corrected - I checked abunch of countries yesterday, including Sweden and the UK, and both still had "Get notified" buttons.
Don't get me wrong, the sites still both say 'Notify me' and give no concrete details about availability, but they do state a March 25 release date.