It seriously amazes me that Apple always seems to be supply constrained these days considering a supply chain guru is CEO and his right hand operations man is COO. I mean the Jet Black phone was out of stock as soon as it went on sale. If there are manufacturing issues why not tell people up front that quantities will be limited or delay the launch of that model until sufficient quantities are availalbe. I'm glad they released a statement though. Hopefully they'll get fewer disappointed walk in customers.
The new colors always seem to be the most popular in the first wave because with no major design changes they are the most prominent way of advertising that you have the latest and greatest. That said, my guess is that overall sales of the new colors moderates over time, and Apple doesn't want to disrupt the supply chain too much by deliberately over-ordering the new colors at launch.
Also, I'm sure both the Note 7's battery issues and the botched recall (WSJ is reporting they didn't even notify the CPSC before issuing the recall) caused an unexpected spike in demand for the iPhone 7 Plus.
Hypothetical situation for opening minute of online preorder:
You want a 7+ 256GB Jet Black ATT
They are not available!
As shown below, there are 111 alternate choices to whatever you pick.
For analysis sake let's assume that:
112 products (SKUs) were available for pre-order
20 [initial] launch countries
50% In-store sales
50% Online sales
400 Apple Stores in launch countries
1,000 carrier/3rd party stores in launch countries
3,000,000 people placing pre-orders in launch countries
So, the questions are: (ignoring supply constraints and considering must have first day sentiment):
Which models/capacities/finishes/carriers do you make available? Where? When?
Said another way, if you wanted to satisfy the demands (including 2 alternate choices) of 3,000,000 customers -- what would you build?
What if you get it wrong -- how much $ do you have invested in unsold inventory? What % of customers are dissatisfied?
Others have posted that they think the limited supply is an Apple marketing stunt...
The purpose of this post is to illustrate that predicting demand is not an easy problem -- especially with 112 SKUs and large number of selling locations. I suspect that Apple previous history and some algorithms * to estimate demand vs [channel] inventory -- could be as simple as the 80/20 rule (but, likely, not).
Then they monitor unmet demand per SKU and build to those targets.
* no, it's not done on an Apple ][ running VisiCalc
Here are the alternate choices if you Pick a 7+ 256GB Jet Black ATT:
It seriously amazes me that Apple always seems to be supply constrained these days considering a supply chain guru is CEO and his right hand operations man is COO. I mean the Jet Black phone was out of stock as soon as it went on sale. If there are manufacturing issues why not tell people up front that quantities will be limited or delay the launch of that model until sufficient quantities are availalbe. I'm glad they released a statement though. Hopefully they'll get fewer disappointed walk in customers.
Also, I'm sure both the Note 7's battery issues and the botched recall (WSJ is reporting they didn't even notify the CPSC before issuing the recall) caused an unexpected spike in demand for the iPhone 7 Plus.
It may have also caused Apple (and other vendors) to do more QA on their batteries, even if they weren't using the same vendors.
Ignoring all the regional and MVNOs, which I'm not sure have a different SKU, there is at least the unlocked, carrier-free version in the US that all iPhone Upgrade Program customers get. That will increase your list by 25%.
Ignoring all the regional and MVNOs, which I'm not sure have a different SKU, there is at least the unlocked, carrier-free version in the US that all iPhone Upgrade Program customers get. That will increase your list by 25%.
Yeah...
Long post even longer
I didn't want to overload, but, ignoring the quantities, there are 112! ways to arrange the manufacturing and distribution priorities of 112 SKUs...
Ignoring all the regional and MVNOs, which I'm not sure have a different SKU, there is at least the unlocked, carrier-free version in the US that all iPhone Upgrade Program customers get. That will increase your list by 25%.
I didn't want to overload, but, ignoring the quantities, there are 112! ways to arrange the manufacturing and distribution priorities of 112 SKUs…
My point is that, at the very least, there are more SKUs for the US market—not referring to total units.
It seriously amazes me that Apple always seems to be supply constrained these days considering a supply chain guru is CEO and his right hand operations man is COO. I mean the Jet Black phone was out of stock as soon as it went on sale. If there are manufacturing issues why not tell people up front that quantities will be limited or delay the launch of that model until sufficient quantities are availalbe. I'm glad they released a statement though. Hopefully they'll get fewer disappointed walk in customers.
Also, I'm sure both the Note 7's battery issues and the botched recall (WSJ is reporting they didn't even notify the CPSC before issuing the recall) caused an unexpected spike in demand for the iPhone 7 Plus.
It may have also caused Apple (and other vendors) to do more QA on their batteries, even if they weren't using the same vendors.
Ignoring all the regional and MVNOs, which I'm not sure have a different SKU, there is at least the unlocked, carrier-free version in the US that all iPhone Upgrade Program customers get. That will increase your list by 25%.
I didn't want to overload, but, ignoring the quantities, there are 112! ways to arrange the manufacturing and distribution priorities of 112 SKUs…
My point is that, at the very least, there are more SKUs for the US market—not referring to total units.
You're right! Actually there are 2 choices (of all the 7 and 7+ SKUs) from Apple -- with AppleCare and without. Likely, even more SKUs considering the launch countries. AIR the 6S and 6S+ each have a new SKU (min 32GB instead of 16GB). And The Intel modem -- that's initially US ATT only (I think), but later all carriers/countries. Then there will be Japan with an alternative to NFC.
Is it impressive or a marketing stunt. They sell out year after year. Why don't they just make millions more before launch - what doesn't sell will sell pre-christmas.
jesus not this nonsense again. look -- corporations breathe profit. they get it by selling things. they don't get it by intentionally not selling things for "sold out!" headlines. that's insanity. real profit comes from selling real products. not selling something now so they can sell it later doesn't make any sense.
also, these things don't grow on trees, you can only build so many in advance.
Of course you can make more money using scarcity principles than meeting everyone's immediate demand if you play your cards right. It's done every day in business. I've not any idea why anyone would be up in arms if Apple would happen to be using all the marketing advantages they have at hand. Intentional or not, "not enough to meet demand" happens every year, even back when they weren't selling 10M+ at launch which wasn't all that many years ago. From all outward appearances scarcity plays to Apple's benefit, just as it does with other in-demand products. Some here act like it's cheating or something.
no, we just think what you're saying is stupid. very, very, very stupid. why? because apple is already the top seller of the most successful CE good in history. they don't need scarcity headlines -- they *already* can't make them fast enough. that means lost sales. that means lost profits. profits are what corporations breathe. it is their air.
again, what you're suggesting (artificial scarcity) is very, very, very stupid.
Paraphrasing Yogi Berra: Nobody buys them anymore -- there's too much demand!
Ignoring all the regional and MVNOs, which I'm not sure have a different SKU, there is at least the unlocked, carrier-free version in the US that all iPhone Upgrade Program customers get. That will increase your list by 25%.
I didn't want to overload, but, ignoring the quantities, there are 112! ways to arrange the manufacturing and distribution priorities of 112 SKUs…
My point is that, at the very least, there are more SKUs for the US market—not referring to total units.
You're right! Actually there are 2 choices (of all the 7 and 7+ SKUs) from Apple -- with AppleCare and without. Likely, even more SKUs considering the launch countries. AIR the 6S and 6S+ each have a new SKU (min 32GB instead of 16GB). And The Intel modem -- that's initially US ATT only (I think), but later all carriers/countries. Then there will be Japan with an alternative to NFC.
I wouldnt think the AC+ would affect the SKU of the device. It can be sold for any unlocked sale.
Ignoring all the regional and MVNOs, which I'm not sure have a different SKU, there is at least the unlocked, carrier-free version in the US that all iPhone Upgrade Program customers get. That will increase your list by 25%.
I didn't want to overload, but, ignoring the quantities, there are 112! ways to arrange the manufacturing and distribution priorities of 112 SKUs…
My point is that, at the very least, there are more SKUs for the US market—not referring to total units.
You're right! Actually there are 2 choices (of all the 7 and 7+ SKUs) from Apple -- with AppleCare and without. Likely, even more SKUs considering the launch countries. AIR the 6S and 6S+ each have a new SKU (min 32GB instead of 16GB). And The Intel modem -- that's initially US ATT only (I think), but later all carriers/countries. Then there will be Japan with an alternative to NFC.
I wouldnt think the AC+ would affect the SKU of the device. It can be sold for any unlocked sale.
I think Apple probably assigns a separate SKU to the package that includes AppleCare, and maybe to the 24-month payment plan that doesn't include AppleCare... It's easier to handle from an packaging/accounting perspective, if nothing else.
Ignoring all the regional and MVNOs, which I'm not sure have a different SKU, there is at least the unlocked, carrier-free version in the US that all iPhone Upgrade Program customers get. That will increase your list by 25%.
I didn't want to overload, but, ignoring the quantities, there are 112! ways to arrange the manufacturing and distribution priorities of 112 SKUs…
My point is that, at the very least, there are more SKUs for the US market—not referring to total units.
You're right! Actually there are 2 choices (of all the 7 and 7+ SKUs) from Apple -- with AppleCare and without. Likely, even more SKUs considering the launch countries. AIR the 6S and 6S+ each have a new SKU (min 32GB instead of 16GB). And The Intel modem -- that's initially US ATT only (I think), but later all carriers/countries. Then there will be Japan with an alternative to NFC.
I wouldnt think the AC+ would affect the SKU of the device. It can be sold for any unlocked sale.
I think Apple probably assigns a separate SKU to the package that includes AppleCare, and maybe to the 24-month payment plan that doesn't include AppleCare... It's easier to handle from an packaging/accounting perspective, if nothing else.
I'm a little baffled by this. I don't see anything on my iPhone box that indicates that it includes AC+. That's a service that's independent of the device.
Ignoring all the regional and MVNOs, which I'm not sure have a different SKU, there is at least the unlocked, carrier-free version in the US that all iPhone Upgrade Program customers get. That will increase your list by 25%.
I didn't want to overload, but, ignoring the quantities, there are 112! ways to arrange the manufacturing and distribution priorities of 112 SKUs…
My point is that, at the very least, there are more SKUs for the US market—not referring to total units.
You're right! Actually there are 2 choices (of all the 7 and 7+ SKUs) from Apple -- with AppleCare and without. Likely, even more SKUs considering the launch countries. AIR the 6S and 6S+ each have a new SKU (min 32GB instead of 16GB). And The Intel modem -- that's initially US ATT only (I think), but later all carriers/countries. Then there will be Japan with an alternative to NFC.
I wouldnt think the AC+ would affect the SKU of the device. It can be sold for any unlocked sale.
I think Apple probably assigns a separate SKU to the package that includes AppleCare, and maybe to the 24-month payment plan that doesn't include AppleCare... It's easier to handle from an packaging/accounting perspective, if nothing else.
I'm a little baffled by this. I don't see anything on my iPhone box that indicates that it includes AC+. That's a service that's independent of the device.
I think that you and I are quibbling over small stuff...
It reminds me of a study that consultants at McKinsey & Co. did for a customer to determine what to do if a large number of separate conditions/events converged within a short period of time.
The only analog that the consultants could come up with:
What would happen if all the urinals in New York City were flushed at the same time?
Their recommendation of what to do:
It doesn't matter, you'll be up to your knees in piss!
I'm in line. People are really really pissed. They should have set aside plus phones for the loyal people who do wait in line and not "ship whenever".
They could have just moved launched date instead of pissing off they're customers. I mean this line is ANGRY!! Yikes. It's not even 1/2 mile long yet like it gets each year.
The store manager is saying they have been told they will not get any PLUS models at brick and mortar stores for at least 30 days. The "wait list" is the online store purchase.
She went on to say buying extended plan iPhone 7 then trying to upgrade will get ugly if 40 days past and no way to upgrade grade because there's no Plus to upgrade to
She also reminded everyone in line "remember if your online order doesn't ship till Oct 12th your extended plan doesn't start till oct 12th which in turn translates into "you're not getting iPhone 8 till oct 12th either. 12 months remember?"
You guys can discuss SKU numbers till you're blue in the face. We've had these same sku options since all carriers came online. Apple knows what they sell. No excuse - Apple blew this big time!
I'm in line. People are really really pissed. They should have set aside plus phones for the loyal people who do wait in line and not "ship whenever".
They could have just moved launched date instead of putting off they're customers. I mean this line is ANGRY!! Yikes. It's not even 1/2 mile long yet like it gets each year.
The store manager is saying they have been told they will not get any plus at brick and mortar stores for at least 30 days. The "wait list" is the online store purchase.
She went on to say buying extended plan iPhone 7 then trying to upgrade will get ugly if 40 days past and no way to upgrade grade because there's no Plus to upgrade to
apple blew this big time!
So pissed that they are standing in line overnight to buy the product.
I'm in line. People are really really pissed. They should have set aside plus phones for the loyal people who do wait in line and not "ship whenever".
They could have just moved launched date instead of putting off they're customers. I mean this line is ANGRY!! Yikes. It's not even 1/2 mile long yet like it gets each year.
The store manager is saying they have been told they will not get any plus at brick and mortar stores for at least 30 days. The "wait list" is the online store purchase.
She went on to say buying extended plan iPhone 7 then trying to upgrade will get ugly if 40 days past and no way to upgrade grade because there's no Plus to upgrade to
apple blew this big time!
So pissed that they are standing in line overnight to buy the product.
No in fact we got up and left. Several left notes taped to the walls of the store: "NO PLUS ANY COLORS OR MODELS DONT BOTHER"
i know youre all at home or work or where ever but Apple gets their hype from those of Yale's who wait in line. It brings out tv caneras, free publicity. In the business it's called HYPE
with no one in line or leaving: no tv cameras. No hype. People will think "oh wow no lines for this one. I guess I'll wait since they are waiting". See how that hurts the product?
I'm a little baffled by this. I don't see anything on my iPhone box that indicates that it includes AC+. That's a service that's independent of the device.
I think that you and I are quibbling over small stuff…
I'm even more confused. I pointed out that an unlocked, SIM-free device would have a different SKU than one from one of the 4 major US MNOs, and you agreed and then said that if you get AC+ that would be a different iPhone as well, even though that's just a service and in no way can I see how that would affect which unlocked iPhones go to which customers.
Customer: "Do you have any unlocked iPhones?" Employee: "Yes. We have all sizes, colors, and capacities at the moment." Customer: "Great! I'd also like to add AC+ to my purchase." Employee: "Oh... I'm sorry but we're out of unlocked iPhones if you buy AC+."
Note that you have up to 30-days after your purchase to get AC+ added, and they don't change your phone when you add it. This impacts the manufacturing and packaging in no way.
I'm in line. People are really really pissed. They should have set aside plus phones for the loyal people who do wait in line and not "ship whenever".
They could have just moved launched date instead of pissing off they're customers. I mean this line is ANGRY!! Yikes. It's not even 1/2 mile long yet like it gets each year.
The store manager is saying they have been told they will not get any PLUS models at brick and mortar stores for at least 30 days. The "wait list" is the online store purchase.
She went on to say buying extended plan iPhone 7 then trying to upgrade will get ugly if 40 days past and no way to upgrade grade because there's no Plus to upgrade to
She also reminded everyone in line "remember if your online order doesn't ship till Oct 12th your extended plan doesn't start till oct 12th which in turn translates into "you're not getting iPhone 8 till oct 12th either. 12 months remember?"
You guys can discuss SKU numbers till you're blue in the face. We've had these same sku options since all carriers came online. Apple knows what they sell. No excuse - Apple blew this big time!
Comments
Also, I'm sure both the Note 7's battery issues and the botched recall (WSJ is reporting they didn't even notify the CPSC before issuing the recall) caused an unexpected spike in demand for the iPhone 7 Plus.
Purposely long post...
Hypothetical situation for opening minute of online preorder:
You want a 7+ 256GB Jet Black ATT
They are not available!
As shown below, there are 111 alternate choices to whatever you pick.
For analysis sake let's assume that:
So, the questions are: (ignoring supply constraints and considering must have first day sentiment):
Which models/capacities/finishes/carriers do you make available? Where? When?
Said another way, if you wanted to satisfy the demands (including 2 alternate choices) of 3,000,000 customers -- what would you build?
What if you get it wrong -- how much $ do you have invested in unsold inventory? What % of customers are dissatisfied?
Others have posted that they think the limited supply is an Apple marketing stunt...
The purpose of this post is to illustrate that predicting demand is not an easy problem -- especially with 112 SKUs and large number of selling locations. I suspect that Apple previous history and some algorithms * to estimate demand vs [channel] inventory -- could be as simple as the 80/20 rule (but, likely, not).
Then they monitor unmet demand per SKU and build to those targets.
* no, it's not done on an Apple ][ running VisiCalc
Here are the alternate choices if you Pick a 7+ 256GB Jet Black ATT:
Ignoring all the regional and MVNOs, which I'm not sure have a different SKU, there is at least the unlocked, carrier-free version in the US that all iPhone Upgrade Program customers get. That will increase your list by 25%.
Yeah...
Long post even longer
I didn't want to overload, but, ignoring the quantities, there are 112! ways to arrange the manufacturing and distribution priorities of 112 SKUs...
That is:
» The factorial of 112! is exactly:
197450685722107402353682037275992488341277868034975337796656295094902858969771811440894224355027779366597957338237853638272334919686385621811850780464277094400000000000000000000000000
» The aproximate value of 112! is: 1.97450685722E+182
» The number of trailing 0s in 112! is: 26
» The number of digits in 112 factorial is 183.
» The factorial of 112 is calculated as below:
112! = 112 • 111 • 110 • 109 • 108 ... 3 • 2 • 1
http://coolconversion.com/math/factorial/Calculate_112_factorial.
Paraphrasing Yogi Berra: Nobody buys them anymore -- there's too much demand!
I think Apple probably assigns a separate SKU to the package that includes AppleCare, and maybe to the 24-month payment plan that doesn't include AppleCare... It's easier to handle from an packaging/accounting perspective, if nothing else.
I think that you and I are quibbling over small stuff...
It reminds me of a study that consultants at McKinsey & Co. did for a customer to determine what to do if a large number of separate conditions/events converged within a short period of time.
The only analog that the consultants could come up with:
What would happen if all the urinals in New York City were flushed at the same time?
Their recommendation of what to do:
It doesn't matter, you'll be up to your knees in piss!
They could have just moved launched date instead of pissing off they're customers. I mean this line is ANGRY!! Yikes. It's not even 1/2 mile long yet like it gets each year.
The store manager is saying they have been told they will not get any PLUS models at brick and mortar stores for at least 30 days. The "wait list" is the online store purchase.
She went on to say buying extended plan iPhone 7 then trying to upgrade will get ugly if 40 days past and no way to upgrade grade because there's no Plus to upgrade to
She also reminded everyone in line "remember if your online order doesn't ship till Oct 12th your extended plan doesn't start till oct 12th which in turn translates into "you're not getting iPhone 8 till oct 12th either. 12 months remember?"
You guys can discuss SKU numbers till you're blue in the face. We've had these same sku options since all carriers came online. Apple knows what they sell. No excuse - Apple blew this big time!
i know youre all at home or work or where ever but Apple gets their hype from those of Yale's who wait in line. It brings out tv caneras, free publicity. In the business it's called HYPE
with no one in line or leaving: no tv cameras. No hype. People will think "oh wow no lines for this one. I guess I'll wait since they are waiting". See how that hurts the product?
Customer: "Do you have any unlocked iPhones?"
Employee: "Yes. We have all sizes, colors, and capacities at the moment."
Customer: "Great! I'd also like to add AC+ to my purchase."
Employee: "Oh... I'm sorry but we're out of unlocked iPhones if you buy AC+."
Note that you have up to 30-days after your purchase to get AC+ added, and they don't change your phone when you add it. This impacts the manufacturing and packaging in no way.