Gene is saying that 10m is better then it sounds because the previous record included channel filling with the 5c. Apple says it sold some 5c's to carriers/partners that sat on shelves and back rooms. This year was pure sell through. Everything ended up in people's hands.
China just doesn't matter to these numbers. If it was available in China then it would have just sold out Saturday morning instead of Sunday night. They would have still sold 10m over the weekend. They were SUPPLY constrained.
I was at an Apple Store in Columbus Ohio. Got my reservation for my phone by getting there at 5am. iPhone 6+ sold out by 7am. I left the line around 8:30 after securing my reservation for my phone. I came back at 4:20 and 2 gals were coming across the parking lot with phone bags in their hands. I was surprised they still had inventory. When the girls got closer I recognized them from the line at 5am. They were behind me by about 15 people. They told me that they were just leaving. So it took them from 5 am to 4:20pm to get through the line. I counted the people in line when I arrived early and there were about 200 people ahead of me. Now they did have 2 lines that were feeding into the store. One for people like me and one for preorder in store pickup. So stock was still available because the checkout process was painfully slow. When I came back at 4:20 there were about 50 people ahead of me. It took 4 hours to get in the door.
My whole point is that they could have sold many, many more phones if they could have sped up the checkout process. It was painful. But the Apple Store employees were on point and energetic and did a fantastic job working to make each customer feel special.
Like adding China.. Speeding out checkout wouldn't have made and difference. They would have just sold out on Saturday night instead of Sunday night. They still would have sold everything they could make... 10m.
When comparing this year sell through number to last year, we have to remember there was no preorder last year. Analysts are talking out through both sides of their mouth and worried the sales will be affected by both supply constraints and China not being one of the first countries. You cannot have both conditions because if supply constraint is a problem, having China will just create a quicker sellout resulting in the same sale number. Searching through the availability tool, it seems there are still 6 plus being available so supply isn't as constraint as last year and China would have helped
Rogifan: Some manufacturers count a sale when a phone is sold to a carrier. Sell-through indicates that the phone sold to the end-user and isn't on the shelf or in the stockroom of a store somewhere.
Gene is saying that 10m is better then it sounds because the previous record included channel filling with the 5c. Apple says it sold some 5c's to carriers/partners that sat on shelves and back rooms. This year was pure sell through. Everything ended up in people's hands.
China just doesn't matter to these numbers. If it was available in China then it would have just sold out Saturday morning instead of Sunday night. They would have still sold 10m over the weekend. They were SUPPLY constrained.
"Apple says it sold some 5c's to carriers/partners that sat on shelves and back rooms."
When comparing this year sell through number to last year, we have to remember there was no preorder last year. Analysts are talking out through both sides of their mouth and worried the sales will be affected by both supply constraints and China not being one of the first countries. You cannot have both conditions because if supply constraint is a problem, having China will just create a quicker sellout resulting in the same sale number. Searching through the availability tool, it seems there are still 6 plus being available so supply isn't as constraint as last year and China would have helped
Rogifan: Some manufacturers count a sale when a phone is sold to a carrier. Sell-through indicates that the phone sold to the end-user and isn't on the shelf or in the stockroom of a store somewhere.
Yes I know what it means. I just thought it was interesting Apple used the term in the press release as I don't remember them doing so in the past. I wonder though do the sales figures only include those phones that have actually shipped to consumers or are in transit? For instance if you ordered the iPhone 6+ and it's on back order 3-4 weeks does Apple include that in their sales figures? Or do they leave those out as the consumer still has the opportunity to cancel the order?
I thought that Apple didn't hit the "big time" until it scored China Mobile back in January of this year? Who were they with in China before then?
The second and third largest carriers there. Couldn't quite remember the name. (They got the second one first, for 3GS from my rather bad memory, and the third one a couple of years later)
When comparing this year sell through number to last year, we have to remember there was no preorder last year. Analysts are talking out through both sides of their mouth and worried the sales will be affected by both supply constraints and China not being one of the first countries. You cannot have both conditions because if supply constraint is a problem, having China will just create a quicker sellout resulting in the same sale number. Searching through the availability tool, it seems there are still 6 plus being available so supply isn't as constraint as last year and China would have helped
Here's what Tim Cook said in the press release:
"While our team managed the manufacturing ramp better than ever before, we could have sold many more iPhones with greater supply and we are working hard to fill orders as quickly as possible.”"
So clearly according to him there are supply constraints. And if that's the case how would China have helped? When you only have so many phones available for sale it doesn't matter how many countries are included in the launch. Perhaps it's a good thing China didn't launch right away.
Gene is saying that 10m is better then it sounds because the previous record included channel filling with the 5c. Apple says it sold some 5c's to carriers/partners that sat on shelves and back rooms. This year was pure sell through. Everything ended up in people's hands.
China just doesn't matter to these numbers. If it was available in China then it would have just sold out Saturday morning instead of Sunday night. They would have still sold 10m over the weekend. They were SUPPLY constrained.
I agree last year there was an abundance of 5C supply making this sell through number of 6/6+ even more impressive IMO.
Also margins should be way up this quarter since I would assume the 6+ will have higher margins than the 5C did last year.
Next year should be big as well if Apple makes a new entry level 6C but gets the pricing right. The problem with the 5C last year was that it was too expensive.
Yes I know what it means. I just thought it was interesting Apple used the term in the press release as I don't remember them doing so in the past. I wonder though do the sales figures only include those phones that have actually shipped to consumers or are in transit? For instance if you ordered the iPhone 6+ and it's on back order 3-4 weeks does Apple include that in their sales figures? Or do they leave those out as the consumer still has the opportunity to cancel the order?
I don't expect them to be any more specific but perhaps.
"While our team managed the manufacturing ramp better than ever before, we could have sold many more iPhones with greater supply and we are working hard to fill orders as quickly as possible.”"
So clearly according to him there are supply constraints. And if that's the case how would China have helped? When you only have so many phones available for sale it doesn't matter how many countries are included in the launch. Perhaps it's a good thing China didn't launch right away.
I was told by several people on here that Apple will just build more plants if it wants more phones and that this manufacturing constraint is planned.
In other words... Apple doesn't want to sell any more than 10 million phones over the launch weekend.
(I think the 9 million number from last year included every phone that Apple could make at the time... the whole idea being that Apple would sell every one of those phones... which it didn't)
Apple has a huge balancing act to perform with each new iPhone release. Here are a few of the factors I think about:
Rapid Response Team. Apple has a rapid response team standing by watching for any reported issues once the phones are in customers' hands. If an issue arises in the software, that's bad, but not so bad as a hardware issue. Software issues can be fixed and pushed out, but a hardware issue could imply a recall or a swap out of a large number of units. For this reason, Apple would be smart not to build too many units ahead. The company must choose a balance between customer demand and wanting to limit the exposure should a hardware problem present itself.
Start of production. Any company would like to have as much time as possible leading up to a new product introduction to ramp production and get the bugs out of the production process. Apple has to balance between ramping early and taking more time to work out production lines issues. So it's not simply a matter of starting production back in July so there will be 20+ million units on day one.
Ongoing production levels. Apple needs to scale its production capability to meet steady-state demand after an initial spike in demand around the launch of a new product. It's inefficient to build out production capacity to meet initial demand, as then you end up with idle production lines after the initial demand spike is satisfied.
I think Apple very carefully manages these issues and knows long before launch day what number they will report after first weekend sales; simply because they know they will sell every unit they produce and they control the number of units available. Skewing conservative with its supply satisfies the above three issues while also creating scarcity that increases demand.
I noticed in the press release Cook used the words "sell through". Any significance to this? I don't remember Apple using that phrase before in press releases.
I noticed that too. Tim usually picks his words very precisely. It is probably a way of making 'supply constraints' (a badish thing) sound really good.
Sell through is the percentage of units actually sold in relation to those shipped. Since they are supply constrained, they are going to sell near 100% of what they ship.
Apple being supply constrained and still selling a record number is a very good thing even if Wall Street generally doesn't really like it.
Comments
China just doesn't matter to these numbers. If it was available in China then it would have just sold out Saturday morning instead of Sunday night. They would have still sold 10m over the weekend. They were SUPPLY constrained.
Like adding China.. Speeding out checkout wouldn't have made and difference. They would have just sold out on Saturday night instead of Sunday night. They still would have sold everything they could make... 10m.
I guess 1 million more is pretty good...
Without China.
Without China.
I thought that Apple didn't hit the "big time" until it scored China Mobile back in January of this year? Who were they with in China before then?
"Apple says it sold some 5c's to carriers/partners that sat on shelves and back rooms."
Source? When did Apple ever say this?
No China? Limited supply?
Extremely impressive !
I might find it too big, it's a huge success for Apple.
Am I the only one hoping they will continue on keeping a smaller version around, even if less powerful than the main iPhone?
Maybe C versions could remain small?
When comparing this year sell through number to last year, we have to remember there was no preorder last year. Analysts are talking out through both sides of their mouth and worried the sales will be affected by both supply constraints and China not being one of the first countries. You cannot have both conditions because if supply constraint is a problem, having China will just create a quicker sellout resulting in the same sale number. Searching through the availability tool, it seems there are still 6 plus being available so supply isn't as constraint as last year and China would have helped
What "availability tool"?
I guess 1 million more is pretty good...
Without China.
I thought that Apple didn't hit the "big time" until it scored China Mobile back in January of this year? Who were they with in China before then?
The second and third largest carriers there. Couldn't quite remember the name. (They got the second one first, for 3GS from my rather bad memory, and the third one a couple of years later)
http://www.seaturtle.org/idevice/
Just drop in your own zip code. In my case it shows the 6+ available from at least 4 "nearby" resellers.
Here's what Tim Cook said in the press release:
"While our team managed the manufacturing ramp better than ever before, we could have sold many more iPhones with greater supply and we are working hard to fill orders as quickly as possible.”"
So clearly according to him there are supply constraints. And if that's the case how would China have helped? When you only have so many phones available for sale it doesn't matter how many countries are included in the launch. Perhaps it's a good thing China didn't launch right away.
I agree last year there was an abundance of 5C supply making this sell through number of 6/6+ even more impressive IMO.
Also margins should be way up this quarter since I would assume the 6+ will have higher margins than the 5C did last year.
Next year should be big as well if Apple makes a new entry level 6C but gets the pricing right. The problem with the 5C last year was that it was too expensive.
I don't expect them to be any more specific but perhaps.
Well done, Apple.
Samsung is "well done" as well.
Here's what Tim Cook said in the press release:
"While our team managed the manufacturing ramp better than ever before, we could have sold many more iPhones with greater supply and we are working hard to fill orders as quickly as possible.”"
So clearly according to him there are supply constraints. And if that's the case how would China have helped? When you only have so many phones available for sale it doesn't matter how many countries are included in the launch. Perhaps it's a good thing China didn't launch right away.
I was told by several people on here that Apple will just build more plants if it wants more phones and that this manufacturing constraint is planned.
In other words... Apple doesn't want to sell any more than 10 million phones over the launch weekend.
(I think the 9 million number from last year included every phone that Apple could make at the time... the whole idea being that Apple would sell every one of those phones... which it didn't)
I guess 1 million more is pretty good...
Apple has a huge balancing act to perform with each new iPhone release. Here are a few of the factors I think about:
Rapid Response Team. Apple has a rapid response team standing by watching for any reported issues once the phones are in customers' hands. If an issue arises in the software, that's bad, but not so bad as a hardware issue. Software issues can be fixed and pushed out, but a hardware issue could imply a recall or a swap out of a large number of units. For this reason, Apple would be smart not to build too many units ahead. The company must choose a balance between customer demand and wanting to limit the exposure should a hardware problem present itself.
Start of production. Any company would like to have as much time as possible leading up to a new product introduction to ramp production and get the bugs out of the production process. Apple has to balance between ramping early and taking more time to work out production lines issues. So it's not simply a matter of starting production back in July so there will be 20+ million units on day one.
Ongoing production levels. Apple needs to scale its production capability to meet steady-state demand after an initial spike in demand around the launch of a new product. It's inefficient to build out production capacity to meet initial demand, as then you end up with idle production lines after the initial demand spike is satisfied.
I think Apple very carefully manages these issues and knows long before launch day what number they will report after first weekend sales; simply because they know they will sell every unit they produce and they control the number of units available. Skewing conservative with its supply satisfies the above three issues while also creating scarcity that increases demand.
I noticed in the press release Cook used the words "sell through". Any significance to this? I don't remember Apple using that phrase before in press releases.
I noticed that too. Tim usually picks his words very precisely. It is probably a way of making 'supply constraints' (a badish thing) sound really good.
Sell through is the percentage of units actually sold in relation to those shipped. Since they are supply constrained, they are going to sell near 100% of what they ship.
Apple being supply constrained and still selling a record number is a very good thing even if Wall Street generally doesn't really like it.