Initial Apple Watch stock dries up in minutes, shipping times quickly jump to 4-6 weeks

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  • Reply 121 of 362
    thomprthompr Posts: 1,516member
    Quote:

    Originally Posted by friedmud View Post

     

     

    There are really only 8 "models" that matter: silver aluminum, black aluminum, silver SS, black SS and each in 38mm and 42mm.  The bands can be matched later and stuffed in boxes easily... so they could have made 1M of each of these types of watches (8M total) and had them sitting there ready to have a band stuffed in it and shipped out... 


    So they could have made 8M total watches and had them sitting there as inventory.  Hoping that this new product would actually sell at least 8M in total, and 1M for each SKU.  Even if all of these units eventually sell after a few months, this is well known to be anti-Cook behavior.  He describes inventory as "fundamentally evil". 

     

    So even though I agree with you that it is a strong likelihood that there were production issues, I don't believe that Apple would have ever planned to come in with 1M units each for 8 different "models".

  • Reply 122 of 362
    tmaytmay Posts: 5,825member
    Quote:

    Originally Posted by thompr View Post

     

    So they could have made 8M total watches and had them sitting there as inventory.  Hoping that this new product would actually sell at least 8M in total, and 1M for each SKU.  Even if all of these units eventually sell after a few months, this is well known to be anti-Cook behavior.  He describes inventory as "fundamentally evil". 

     

    So even though I agree with you that it is a strong likelihood that there were production issues, I don't believe that Apple would have ever planned to come in with 1M units each for 8 different "models".


    I don't believe any sane individual would have that much buildout prior to launch. I agree that the goal post launch is to meet demand needs as possible, but to not build up huge inventories that would be better served by a finely tuned production system.

  • Reply 123 of 362
    thomprthompr Posts: 1,516member
    Quote:
    Originally Posted by pmz View Post

     



    Still?

    The droves of people who will say anything to minimize the popularity of the device will soon have nothing left to say, when real numbers are revealed. This is already as popular as the iPhone itself. Wait and see.


    Already as popular as iPhone itself?  Can I interpret this to mean that you believe Apple could sell 50+ million ?Watches this quarter if they could only build that many?

     

    The iPhone is an item that not only brings much more capability than the ?Watch (at the expense of a little inconvenience compared to the ?Watch, if the iPhone could legitimately be called "inconvenient" at all) and also comes with a carrier subsidy so that you can purchase one at $400 less than sticker value.

     

    I think you are getting quite a bit ahead of reality.  I hope it gets there eventually.

  • Reply 124 of 362
    thomprthompr Posts: 1,516member
    Quote:

    Originally Posted by tmay View Post

     

    I don't believe any sane individual would have that much buildout prior to launch. I agree that the goal post launch is to meet demand needs as possible, but to not build up huge inventories that would be better served by a finely tuned production system.


    Right, but that seems to be what the poster I responded to was suggesting.

  • Reply 125 of 362
    tmaytmay Posts: 5,825member
    Quote:

    Originally Posted by thompr View Post

     

    Right, but that seems to be what the poster I responded to was suggesting.


    I'm in agreement with you. Sorry if that wasn't clear. 

  • Reply 126 of 362
    chadbagchadbag Posts: 1,821member

    I just ordered the 42mm space gray sport this afternoon.  I hope it doesn't ship until mid June so I don't have to pay that CC bill until July :)

     

    We want to see what we can do to support the watch with our app but I won't have a lot of time to start playing with it until then anyway...

  • Reply 127 of 362
    tmaytmay Posts: 5,825member
    Quote:



    Originally Posted by pmz View Post

     



    Sometimes they are, just depends on how close you are to the cut off between first run, and the next scheduled batch. Apple knows down to the day when the next batch will be deliverable, and when they quote a long time frame in advance, its usually accurate.


    It's more a continuum of production than a batch, though from a retail point of view, that's how it would appear.

  • Reply 128 of 362
    dr millmossdr millmoss Posts: 5,403member

    Not to pick on anyone in particular, but I've seen several comments on "production issues" being the cause of the constrained supply. This concept covers an awful lot of ground, but I think it is worth asking when supplies of new Apple products haven't been constrained, by whatever cause. They always have been, if my memory serves at all. So I don't get why this seems to be taken as an issue unique to Apple Watch.

  • Reply 129 of 362
    friedmudfriedmud Posts: 164member
    Quote:

    Originally Posted by thompr View Post

     

    So they could have made 8M total watches and had them sitting there as inventory.  Hoping that this new product would actually sell at least 8M in total, and 1M for each SKU.  Even if all of these units eventually sell after a few months, this is well known to be anti-Cook behavior.  He describes inventory as "fundamentally evil". 

     

    So even though I agree with you that it is a strong likelihood that there were production issues, I don't believe that Apple would have ever planned to come in with 1M units each for 8 different "models".




    Sorry I wasn't clear: I was just using round numbers and 1M was handy.  I don't know what real numbers of watches they should have made... but I guarantee you they had good forecasts about how many they were expecting to sell in the first few months... and I know that it was much higher than what they had on hand starting last night.

     

    I know Cook doesn't like inventory... but no one in their right mind wants a two month backlog of orders either.  He wouldn't have made a decision to keep the inventory that low on purpose.

     

    But: all I was trying to say is that the inventory problem is not as bad as people are saying.  It's not keeping around "multiple dozens of models"... it's keeping the pieces ready to go into boxes that could possibly create dozens of configurations.

  • Reply 130 of 362
    jmc54jmc54 Posts: 207member



    If that information is in your contacts, it may have culled it from there!

    Quote:

    Originally Posted by ottobot View Post



    Here is an odd thing. When I placed my order via my iPhone using my standard Apple ID, the Apple Store App, and Apple Pay, the receipt was sent to my work email address and included my work phone number in the receipt. That email address and phone number are not linked to my Apple ID or Apple Pay at all. I have triple checked my account and my personal information is stored in Apple's systems. How could that have switched?

    If that information is in your contacts, it may have culled it from there!

  • Reply 131 of 362
    tmaytmay Posts: 5,825member
    Quote:

    Originally Posted by Dr Millmoss View Post

     

    Not to pick on anyone in particular, but I've seen several comments on "production issues" being the cause of the constrained supply. This concept covers an awful lot of ground, but I think it is worth asking when supplies of new Apple products haven't been constrained, by whatever cause. They always have been, if my memory serves at all. So I don't get why this seems to be taken as an issue unique to Apple Watch.


    I'm stating production issues vs inventory control as the likely source of shortages, and I'm in agreement that there are few Apple product launches where there haven't been production constraints, and/or customer issues post delivery. But suspect demand is very high as well.

  • Reply 132 of 362
    I could only wish for a "4-6 week" lead time. At 12:08 I ordered the SS Black with Link Bracelet and only got back "June" as my delivery confirmation%u2014conceivably up to 11 weeks, though I expect 5-6 weeks to be more realistic.

    So much for thinking that ordering the most expensive non-Edition sku would immunize me from back orders.
  • Reply 133 of 362
    flaneurflaneur Posts: 4,526member
    thompr wrote: »
    I favor RadarTheKat's hypothesis, presented yesterday to explain why Apple would go for online ordering, as also a good explanation for today's events as well.

    There are a hell of a lot of SKUs here, since Apple knows a wearable device will need to be personalizable.  What they can't do is pre-build a shit-ton of each and ship them to stores with fingers crossed.  Tim Cook HATES inventory.  So Apple institutes online ordering and shipping only, at least at first until they get good statistical data to guide the build plans.  For the same reason, they are not going to pre-build a shit-ton of each model and keep them at the factory for shipping to users on 4/24 either.  Whether in the stores or at the factories, it's still inventory, and Tim Cook frowns on it.

    So Apple builds enough of some of the less expensive models that they can indeed ship a few when they said they would.  The rest are more-or-less "build-to-order", and Apple will begin to gather their statistics, adjust their build plans, and get the factories ramped up as best they can.

    Makes sense to me.

    Doesn't make sense to me. Tim Cook HATES shortages, HATES missing sales, more than he hates inventory, as any sensible COO/CEO would, and he is a sensible man.
  • Reply 134 of 362
    flaneurflaneur Posts: 4,526member
    tmay wrote: »
    I'm stating production issues vs inventory control as the likely source of shortages, and I'm in agreement that there are few Apple product launches where there haven't been production constraints, and/or customer issues post delivery. But suspect demand is very high as well.

    And I would add that the Watch is exponentially more novel and complicated than any product they've ever launched.
  • Reply 135 of 362
    adonissmuadonissmu Posts: 1,774member
    Quote:

    Originally Posted by sog35 View Post

     

     

    You were saying?  Don't underestimate the absolute stupidity of the media

     

    Muted Debut for Apple Watch With Sparse Crowds in Europe and Asia

     

    http://finance.yahoo.com/news/video-apple-watch-muted-debut-071514205.html


    I just don't know why you'd line up for something you can only buy online? 

  • Reply 136 of 362
    mac_128 wrote: »
    flaneur wrote: »
    You are making shit up out of your addled imagination, asserting things without a shred of evidence
    No, I'm speculating based on Apple's well documented business practices. Google "Apple supply chain" and educate yourself.

    In 2012 it was reported that Apple turns over its entire inventory every 5 days. 
    http://appleinsider.com/articles/12/05/31/apple_turns_over_entire_inventory_every_five_days

    They are continually ranked as the best in the world at this. Manufacturing a ton of inventory to sit around in warehouses is not their M.O.


    Here's the way that I suspect that Jeff Williams has set up production for the sport and the watch:

    There are 4 case styles x 2 sizes == 8 case SKUs:
    • al silver x2
    • al space gray x2
    • ss silver x2
    • ss space black x2

    There are some large number of case/size/band combos ...

    Pre 4//10 -- Based on forecast demand, case SKUs were assembled and sport/watch assembly stations were setup -- ranging from:
    • a single case SKU (style and size) and a single band SKU
    • a single case SKU (style and size) and multiple band SKUs
    • multiples of these as, needed

    4/10-4/24 As preorders are received the assembly, stations are adjusted to satisfy actual demand.

    Orders are assembled according to actual demand (assembled-to-order), combining a case SKU and a band SKU -- then off to packaging and shipping ...

    Manufacture of case shells and assembly of case SKUs are adjusted to reflect actual demand.

    So ... A pre-order received on day 1-4, could be assembled, packaged, preped for shipping on day 2-5, and batch-held by destination (for efficient shipping).

    Allowing for problems (day 6-10) they could satisfy most day 1-4 preorders by day 10 -- and ship 4/14.
  • Reply 137 of 362
    dr millmossdr millmoss Posts: 5,403member
    Quote:

    Originally Posted by tmay View Post

     

    I'm stating production issues vs inventory control as the likely source of shortages, and I'm in agreement that there are few Apple product launches where there haven't been production constraints, and/or customer issues post delivery. But suspect demand is very high as well.




    Demand may be high, low or, middling; we can't really know. What we do know is that it exceeds supply, for now at least.

     

    We hear about "production issues" for every new Apple product as manufacturing ramps up. Not only does that explanation cover a whole host of possible issues, it's also the norm, and certainly not unique to Apple Watch.

  • Reply 138 of 362
    tmaytmay Posts: 5,825member
    Quote:
    Originally Posted by Dr Millmoss View Post

     



    Demand may be high, low or, middling; we can't really know. What we do know is that it exceeds supply, for now at least.

     

    We hear about "production issues" for every new Apple product as manufacturing ramps up. Not only does that explanation cover a whole host of possible issues, it's also the norm, and certainly not unique to Apple Watch.


    The context of my response is that Apple hasn't been trying to reign in inventory, which some have stated as the or one of the causes of shortages, though they certainly will now be expected to fine tune production with some demand numbers available.

  • Reply 139 of 362
    adonissmuadonissmu Posts: 1,774member
    Quote:
    Originally Posted by Flaneur View Post





    You are making shit up out of your addled imagination, asserting things without a shred of evidence, and using "logic" that ignores simpler possibilities.



    How about this? The Watch is a new threshold in miniaturization, complexity and design, using processes never brought to mass scale before, a supply-chain mare's nest like no other, assembled by a contract firm with no previous experience with such a device, and so on.



    In other words none of us have any idea why supplies do not meet demand at this point.

    Accept he is right. They even hinted at this several weeks ago. I received an email from Apple saying I should favorite my favorite watches to ensure they would be available for me to purchase when pre-orders became live. This was the only reason I favorited the watches I liked to begin with. I never favorited anything on their site before. 

  • Reply 140 of 362
    thomprthompr Posts: 1,516member
    Quote:
    Originally Posted by Dr Millmoss View Post

     

    Not to pick on anyone in particular, but I've seen several comments on "production issues" being the cause of the constrained supply. This concept covers an awful lot of ground, but I think it is worth asking when supplies of new Apple products haven't been constrained, by whatever cause. They always have been, if my memory serves at all. So I don't get why this seems to be taken as an issue unique to Apple Watch.


    What was unique here, from my perspective, was the speed at which the supply slated for 4/24 delivery was exhausted.  We are talking under a couple of minutes here across a broad range of SKUs.  I saw this with my own eyes and was blown away.  This was way, way faster than even the most successful online launches of iPhones/iPads that I have ever been involved with, so I think it naturally raises the question of "why".  That's why I am grappling with this issue.  I can't speak for anybody else.  

     

    Update: My sincere hunch is that high demand alone could not have caused this.  There must have been significantly constrained supply also.  To explain the constrained supply, I am fine with two notions that are not mutually exclusive:  (1) there were significant constraints somewhere in the supply chain that could not be overcome, and (2) Apple significantly underestimated demand.  I don't have to resort to some conspiracy theory related to number (2)... it could have just been an honest miscalculation.  Given the rate at which the 4/24 stock was exhausted, I could even believe that both (1) and (2) occurred, but which one applied the stronger constraint, we'll never know..

     

    I would also note the following: just as new Apple products have almost always been constrained, the comment sections here on AI have always been subsequently filled with discussion just like these.  So it's just par for the course, I guess.

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