Briefly: Apple outage, retail meeting, 17-inch MBP
An outage affecting its online store on Wednesday likely cost Apple a pretty penny. Meanwhile, the company is reported to have dropped its retail employee bonus structure and then commissioned a meeting of store managers in Calif. Finally, it appears the wait for the new 17-inch MacBook Pros will continue.
Apple's multimillion dollar blunder
Apple on Wednesday experienced a technical issue with its US-based online store, resulting in a lengthy outage that likely cost the company several million dollars in sales.
After taking the store offline around 8:00 am eastern time to prepare for the launch of its new 13-inch Core 2 Duo MacBook notebooks, Apple was unable return the store to operation until early afternoon.
The outage, which lasted about four and a half hours, is unlikely to have a material impact on the company's financials. However, it should be noted that approximately 50 percent of Apple's revenues these days are generated through its direct sales channels, of which its online store is the major component.
Retail bonus out the window
It looks like Apple's retail segment is expecting tremendous performance this holiday quarter and may have done away with its employee bonus structure as a result.
According to reports, last quarter marked the end of its "Million Dollar Club," which awarded retail reps with a $500 cash bonus if they managed to garner over $500,000 in sales. Instead, Apple is said to have raised slightly the hourly wage it pays some of its retail store employees.
The aforementioned move may have been a point on the agenda at a recently orchestrated meeting between Apple retail executives and store managers. The Cupertino, Calif.-based company is reported to have flown in some of its retail store managers to San Diego where it likely discussed preparations for the holiday shopping season blitz.
17-inch MacBook Pro builds delayed
As reported in Wednesday's edition of AppleInsider, Apple has for one reason or another been unable to make good on promised delivery times for its new 17-inch MacBook Pros.
Instead of shipping notifications, customers who ordered the new flagship Apple notebooks received an automated email from the company's online store this week, informing them of an additional week delay related to their orders.
One AppleInsider correspondent with a bulk order for the new notebooks at stake did some additional digging. He was informed through his Apple channel that the company did not foresee manufacturing ramp of the new models beginning for at least another week.
There's still no word on the exact cause of the delay.
Apple's multimillion dollar blunder
Apple on Wednesday experienced a technical issue with its US-based online store, resulting in a lengthy outage that likely cost the company several million dollars in sales.
After taking the store offline around 8:00 am eastern time to prepare for the launch of its new 13-inch Core 2 Duo MacBook notebooks, Apple was unable return the store to operation until early afternoon.
The outage, which lasted about four and a half hours, is unlikely to have a material impact on the company's financials. However, it should be noted that approximately 50 percent of Apple's revenues these days are generated through its direct sales channels, of which its online store is the major component.
Retail bonus out the window
It looks like Apple's retail segment is expecting tremendous performance this holiday quarter and may have done away with its employee bonus structure as a result.
According to reports, last quarter marked the end of its "Million Dollar Club," which awarded retail reps with a $500 cash bonus if they managed to garner over $500,000 in sales. Instead, Apple is said to have raised slightly the hourly wage it pays some of its retail store employees.
The aforementioned move may have been a point on the agenda at a recently orchestrated meeting between Apple retail executives and store managers. The Cupertino, Calif.-based company is reported to have flown in some of its retail store managers to San Diego where it likely discussed preparations for the holiday shopping season blitz.
17-inch MacBook Pro builds delayed
As reported in Wednesday's edition of AppleInsider, Apple has for one reason or another been unable to make good on promised delivery times for its new 17-inch MacBook Pros.
Instead of shipping notifications, customers who ordered the new flagship Apple notebooks received an automated email from the company's online store this week, informing them of an additional week delay related to their orders.
One AppleInsider correspondent with a bulk order for the new notebooks at stake did some additional digging. He was informed through his Apple channel that the company did not foresee manufacturing ramp of the new models beginning for at least another week.
There's still no word on the exact cause of the delay.
Comments
Apple on Wednesday experienced a technical issue with its US-based online store, resulting in a lengthy outage that likely cost the company several million dollars in sales.
So all those thousands of people who went to the online store during those 5 hours we so outraged that they all went to Dell for their purchases????? Really?
So all those thousands of people who went to the online store during those 5 hours we so outraged that they all went to Dell for their purchases????? Really?
Aye, Jupiter One.
My thoughts exactly. If I want to by a Mac, and see that the store is down, I come by the next day and buy it. To say, that they lost several million dollars worth of business is ludicrous. The only sales they probably lost are the impulsive purchases. Please, use common sense.
thanks
indy
Aye, Jupiter One.
My thoughts exactly. If I want to by a Mac, and see that the store is down, I come by the next day and buy it. To say, that they lost several million dollars worth of business is ludicrous. The only sales they probably lost are the impulsive purchases. Please, use common sense.
thanks
indy
You beat me to it - well said.
I really hope it ships on time now, because Apple will have to give me more then £50 to keep me happy this time
You beat me to it - well said.
The article is correct. I was going to buy several million dollars worth of Apple hardware yesterday morning, but with the store being down I had time to reconsider.
I ended up walking to KB Toys and getting an Etch-a-sketch. It works wonderfully. I am posting from it right now.
The article is correct. I was going to buy several million dollars worth of Apple hardware yesterday morning, but with the store being down I had time to reconsider.
I ended up walking to KB Toys and getting an Etch-a-sketch. It works wonderfully. I am posting from it right now.
I didn't know Etch-a-Sketch came with a wifi card! Damn, if it weren't for the monochromatic screen, I might have gotten one myself... Can't do much photoshop on that thing, I imagine...
-Clive
I mean come on, no one should have to understand that an online store can go down for a few hours, after all that's why it's online right? RIGHT!?
So all those thousands of people who went to the online store during those 5 hours we so outraged that they all went to Dell for their purchases????? Really?
I think we can pretty much all agree that most all of those people went back later. Some might have gone to an Apple store, if one was near, and others might have actually gone to another Apple retailer.
So, yeah. Four hours of downtime can easily equal a couple of million dollars in lost sales.
You guys are all forgetting that Apple sells a lot more than Macs at the online store. They sell tons of third-party products, including cases, hard drives, speakers, software, and, most importantly, iPod accessories. All of which can be found at MacMall, Amazon, and elsewhere.
So, yeah. Four hours of downtime can easily equal a couple of million dollars in lost sales.
I don't think so.
I'm pretty sure the largest amount of sales on the site are for computers, and other Apple made items.
While I don't know the hourly sales totals, and how they are affected when a machine revision first comes out, it can't be more than about $400 thousand an hour.
I quickly figured that by the number of hours a year dividing the amount Apple is estimated to sell on the site a year.
If most of that is for Apple items, a 4 1/2 hour disruption won't make much of a difference. And if some go to an Apple store instead, it will have even less of an effect, because they will buy some of those items there.
Likewise, if you are trying to make an order for a new computer, you might just go with Amazon instead.
While CPU units won't suffer, there is a loss in margin on some of the sales. Likewise, sales may have been placed through the call-in numbers, which have higher overhead, and overloads could have led to further disgrunteld consumers.
More importantly, it is a branding issue. Macs? They can't even keep their e-commerce site up! Piss people off frequently enough when they are trying to spend money, and they go elsewhere. You need strong consumer loyalty for them to keep coming back.
If Apple sells 2M CPUs a quarter, that is an average of about 1,000 per hour. Since the outage was during business hours, that particular period might have anticipated twice that number fo sales per hour, or a total of 8-9000 units. If they lost 5% of sales, that could be as much as $600k in revenue, without using much imagination. Same concern for iPods.
Likewise, if you are trying to make an order for a new computer, you might just go with Amazon instead.
Amazon? They sell Macs too? Well how do they get their supply of Macs if they don't come from Apple? Oh, wait. They do.
Sure Apple will take a small hit since they sell to Amazon in bulk and at reseller prices but they're still making the most money off of the thing.
As for accessories, any products that Apple resells (i.e. third-party iPod cases, car-chargers, dog-walkers) are NOT going to have a high profit margin. They're on the site for the sole reason that Apple knows they'll be able to make the extra pocket-change off of accessibility convenience b/c most users don't want to order one thing each from five different sites.
Apple won't lose millions, case closed.
-Clive
Apple's biggest profit margins are on accessories. If the Apple store is down, people buy the same product from someone else.
So exactly which accessories do you think people went to buy during that outage, that they then went and bought from another vendor? That Apple still didn't make money off of? That totaled in the "MILLIONS"? If you're planning on buying a Mac or one of their accessories or software, buying the Windows or Dell equivalent is a totally different decision.
Likewise, if you are trying to make an order for a new computer, you might just go with Amazon instead.
And Apple doesn't make money from someone buying a Mac from third party vendors???
While CPU units won't suffer, there is a loss in margin on some of the sales. Likewise, sales may have been placed through the call-in numbers, which have higher overhead, and overloads could have led to further disgruntled consumers.
And you think disgruntle customers all of a sudden then decided to go with a Windows box instead?
More importantly, it is a branding issue. Macs? They can't even keep their e-commerce site up! Piss people off frequently enough when they are trying to spend money, and they go elsewhere.
True, and how often has this happened?
You need strong consumer loyalty for them to keep coming back.
I think it is safe to say Apple has this.
Look, no one is saying that Apple didn't lose some bucks during that time. It's just being a little bit of a drama queen to say that they lost MILLIONS in sales during a five hour outage. I mean MILLIONS? Really, millions?
Apple's biggest profit margins are on accessories. If the Apple store is down, people buy the same product from someone else.
Likewise, if you are trying to make an order for a new computer, you might just go with Amazon instead.
While CPU units won't suffer, there is a loss in margin on some of the sales. Likewise, sales may have been placed through the call-in numbers, which have higher overhead, and overloads could have led to further disgrunteld consumers.
More importantly, it is a branding issue. Macs? They can't even keep their e-commerce site up! Piss people off frequently enough when they are trying to spend money, and they go elsewhere. You need strong consumer loyalty for them to keep coming back.
If Apple sells 2M CPUs a quarter, that is an average of about 1,000 per hour. Since the outage was during business hours, that particular period might have anticipated twice that number fo sales per hour, or a total of 8-9000 units. If they lost 5% of sales, that could be as much as $600k in revenue, without using much imagination. Same concern for iPods.
Your numbers are off. By a lot. Apple sold 5.3 million computers this year. Not 8 million. They sold about 20% of their total volume from their web site. I get a total of perhaps $400 thousand per hour max, for everything they sell there.
How can you possibly get 1,000 computers an hour? There are 8760 hours in a 365 day year. Apple sold 5.3 million computers this year. 20% of that is 1,060,000 computers. divide that by 8760 hours, and you get 121 computers sold in an hour, or a total of 544.5 for the 4 1/2 hours the store was down.
If you want to say that sales are better than the average of the year. Fine. Then go to a total of 550 computers.
That's it. Max.
But lost to who? If someone is going to the online store, intent on buying a Mac, how many do you really think say, "Ah, f*ck it, I'll just buy a Dell instead"? Or, "Oh hell, I guess I didn't really want to buy a computer anyway." I would think that only the most flaky, impulsive buyers (that don't add up to *millions* of $$ in a 5 hour period) would do that.
I agree totally, I also don't think most people who are true impulse buyers are doing that impulse buying online. A person who couldn't wait 5 hours for the store to come back online is unlikely to be able to wait for shipping either and would go to their local retailer.