Where art thou iPod?

[MacBytes]

Category: Apple Hardware
Link: Where art thou iPod? (http://www.macbytes.com/link.php?sid=20041217014401)
Posted on MacBytes.com (http://www.macbytes.com)

Approved by Mudbug

[JeDiBoYTJ]

makes me glad to know I bought my g/f's new ipod mini back in November :cool:

[Jerry Spoon]

With only a week before Christmas, I'm thinking that's not too bad. I could be wrong (and I'm sure if I am that someone will find information to the contrary), but I think the shortage last year started taking form sooner than a week or so before Christmas.

[winmacguy]

My only comment would be why is Apple still suffering supply constraint for iPods for the second Christmas. 6 Million iPods is great but it is obviously still not enough to meet world wide demand. If they knew that the demand far outweighed supply cappabilities last Christmas then they should have made sure that the manufactruing capacity was fully capable to meet world wide demand this Christmas i.e 3 or 4 OEMs instead of just 2. That way they would be selling 12 million+ iPods instead of just 6 million.

Seems like they stil have some supply chain managment issues so sort out.

[wordmunger]

My only comment would be why is Apple still suffering supply constraint for iPods for the second Christmas. 6 Million iPods is great but it is obviously still not enough to meet world wide demand. If they knew that the demand far outweighed supply cappabilities last Christmas then they should have made sure that the manufactruing capacity was fully capable to meet world wide demand this Christmas i.e 3 or 4 OEMs instead of just 2. That way they would be selling 12 million+ iPods instead of just 6 million.

Seems like they stil have some supply chain managment issues so sort out.

I do believe I recall that many were skeptical when Apple announced the 6 million figure as their plan for production. Suppose they had sold only 3 million: shareholders would be angrily complaining about the extra inventory. I think it's pretty amazing they hit it this close: the slowdown occurring only a week or so before Christmas.

[dejo]

I do believe I recall that many were skeptical when Apple announced the 6 million figure as their plan for production. Suppose they had sold only 3 million: shareholders would be angrily complaining about the extra inventory. I think it's pretty amazing they hit it this close: the slowdown occurring only a week or so before Christmas.

Agreed. Matching supply to demand is tricky enough. Predicting future actual demand and ramping up supply to meet it is downright clairvoyant. Seems that as time goes on Apple is predicted, by outsiders, to sell more and more iPods this quarter. I've heard 2.5 mil, 3 mil, 4 mil, and now 6 mil for this quarter. It's not an easy thing to pull off, especially for such a (and I use the term begrudgingly) "trendy" product.

[winmacguy]

Agreed. Matching supply to demand is tricky enough. Predicting future actual demand and ramping up supply to meet it is downright clairvoyant. Seems that as time goes on Apple is predicted, by outsiders, to sell more and more iPods this quarter. I've heard 2.5 mil, 3 mil, 4 mil, and now 6 mil for this quarter. It's not an easy thing to pull off, especially for such a (and I use the term begrudgingly) "trendy" product.


It may not be easy but considering that Apple was struggling to meet world wide demand last Christmas with 870,000 iPods sold why didnt they just go for broke on an incredibly trendy stylish product that EVERY bodys wants and get 3 or 4 OEMs onboard. Obvously the signs were all there that they would be able to sell every unit manufactuered. They dont have any current supply problems with the Toshiba Hard Drives it is just the manufacturing capacity that is limiting them. That would save them from having to redirect most of their stocks to supply US customer demand which in turn leaves out the huge European/UK market.
I think the limited supply seems to be mostly relating to the 20GB iPod which is probably hard to predict but the least they could do is to make sure that they can supply ALL of their resellers world wide for the Christmas rush ( like get it right the second time round).

If they make too many they are hardly going to not sell them .......are they?

[wordmunger]

It may not be easy but considering that Apple was struggling to meet world wide demand last Christmas with 870,000 iPods sold why didnt they just go for broke on an incredibly trendy stylish product that EVERY bodys wants and get 3 or 4 OEMs onboard.

To me, manufacturing 6 million this quarter was pretty much "going for broke." Everybody knew they were a hot item, so many were purchased early, and yet for Apple to time it within one week is pretty amazing. Apple will continue to increase capacity as demand increases, but they need to take care: they have been burned in the past, overproducing product and then being left with massive inventory. The billions they have in cash could be gone almost overnight.

[winmacguy]

To me, manufacturing 6 million this quarter was pretty much "going for broke." Everybody knew they were a hot item, so many were purchased early, and yet for Apple to time it within one week is pretty amazing. Apple will continue to increase capacity as demand increases, but they need to take care: they have been burned in the past, overproducing product and then being left with massive inventory. The billions they have in cash could be gone almost overnight.

True, I guess buy scale they are actually increasing their capacity expodentially as it is. On the up side they can continue this till after Christmas to meet the back to school needs around the world.

[dejo]

Obvously the signs were all there that they would be able to sell every unit manufactuered.

That's a little extreme. True, that is currently the case. But say they had manufactured 100-million iPods for this quarter. You think they would all sell? I seriously doubt it. Besides, being in somewhat (i.e. in a minor way) short supply, adds to the "allure" of the product. Rare items are always deemed more valuable...

Plus, if Apple really is announcing a new flash-based iPod and 1GB increase in the iPod mini, they don't want to end up with warehouses full of product that suddenly won't sell.

[puckhead193]

Good, then people will relize how much better apple is then windoze

[winmacguy]

That's a little extreme. True, that is currently the case. But say they had manufactured 100-million iPods for this quarter. You think they would all sell? I seriously doubt it. Besides, being in somewhat (i.e. in a minor way) short supply, adds to the "allure" of the product. Rare items are always deemed more valuable...

Plus, if Apple really is announcing a new flash-based iPod and 1GB increase in the iPod mini, they don't want to end up with warehouses full of product that suddenly won't sell.

100 million is a bit extreme but say in the range of 12-18 million to provide every PC seller world wide (US, UK, Europe, Asia, Australia/NZ) who is an Apple re-seller or iPod distributor a steady supply of iPods (with emphasis on the 20GB iPod) in the run up to Christmas so that they have one for just about every customer who wants one. I dont think that is too much to ask. Considering as I said before that this is the second Christmas that the iPod has been available to the mainstream computer user, and during the first Christmas Apple could have easily sold 2 million of the units. At the moment the bulk of Apples distribution is being channeled to US markets to try and keep up with demand. That is leaving the "rest" a bit starved of Apple products.

Anyway just my 2 cents.
Cheers

[autrefois]

How often does it happen that a mainstream product is hard to find around Christmas? I don't follow industry close enough to know. If it's fairly common, then it's understandable even if it is frustrating. If not, then Apple should do a better job at predicting sales.

[dejo]

100 million is a bit extreme but say in the range of 12-18 million to provide every PC seller world wide (US, UK, Europe, Asia, Australia/NZ) who is an Apple re-seller or iPod distributor a steady supply of iPods (with emphasis on the 20GB iPod) in the run up to Christmas so that they have one for just about every customer who wants one. I dont think that is too much to ask. Considering as I said before that this is the second Christmas that the iPod has been available to the mainstream computer user, and during the first Christmas Apple could have easily sold 2 million of the units. At the moment the bulk of Apples distribution is being channeled to US markets to try and keep up with demand. That is leaving the "rest" a bit starved of Apple products.

Anyway just my 2 cents.
Cheers

I understand your desire to see Apple meet all the demand for iPods (I desire that too), but I think accurately predicting that demand is a very difficult thing to do. Since Apple sold 2 million iPods last quarter, to predict they could easily sell 12-18 million this quarter is fairly bold.

The fact that they are becoming scarce only a week before Christmas I think shows that Apple has done fairly well is predicting demand. And it's not like they've stopped production. More are on they way.

And saying they need to emphasize the 20-gig model is, from my perspective, a case of hindsight is 20/20. Earlier this year it was the iPod mini that was in huge demand (they are still selling well but are not as scarce). Now it seems the demand has switched to the 20GB iPod.

I wish I knew more about what methods Apple uses to predict demand but I don't think we can dismiss them so easily.

As for "funneling" more product to where the demand is highest (i.e. to the US in deference to other markets), I think that is only good business. Plus, Apple will always have a somewhat US-bias. That's unfortunate but understandable.

And I hope this post doesn't come off like I'm just totally dissing you, winmacguy. I too would like to see more iPods sold and more global customers satisfied, but I don't think we really know the whole story.

[dejo]

How often does it happen that a mainstream product is hard to find around Christmas? I don't follow industry close enough to know. If it's fairly common, then it's understandable even if it is frustrating. If not, then Apple should do a better job at predicting sales.

Almost every Christmas in the US, there is one mainstream product that, that year, is in high demand and short supply. Remember Tickle-Me-Elmo? Or further back in time: Cabbage Patch Kids? Just to name a few.

[winmacguy]

I understand your desire to see Apple meet all the demand for iPods (I desire that too), but I think accurately predicting that demand is a very difficult thing to do. Since Apple sold 2 million iPods last quarter, to predict they could easily sell 12-18 million this quarter is fairly bold.

The fact that they are becoming scarce only a week before Christmas I think shows that Apple has done fairly well is predicting demand. And it's not like they've stopped production. More are on they way.

And saying they need to emphasize the 20-gig model is, from my perspective, a case of hindsight is 20/20. Earlier this year it was the iPod mini that was in huge demand (they are still selling well but are not as scarce). Now it seems the demand has switched to the 20GB iPod.

I wish I knew more about what methods Apple uses to predict demand but I don't think we can dismiss them so easily.

As for "funneling" more product to where the demand is highest (i.e. to the US in deference to other markets), I think that is only good business. Plus, Apple will always have a somewhat US-bias. That's unfortunate but understandable.

And I hope this post doesn't come off like I'm just totally dissing you, winmacguy. I too would like to see more iPods sold and more global customers satisfied, but I don't think we really know the whole story.


Probably just a view gained from living outside the US.
I am sure that Apple did their best to "predict" Christmas sales based on previous YTD figures. It is just that there is a lot of difference from a 25 million user base Mac market world wide to a 300 million+ world wide PC market. I guess on the upside selling out of 100% of your budgeted product lines in the run up to Christmas is a good problem to have.