15GB iPod Offer

[MacRumors]

Apple is sending out emails to those with iPod Mini pre-orders, offering to provide a 15GB iPod instead of an iPod mini for those interested.

Dear Apple Customer,

* Thank you for ordering the new iPod mini!

* The demand for the iPod mini has been incredible. We are shipping them as
* quickly as possible, but we cannot meet the ship date we previously estimated
* for you. We now expect to ship your iPod mini in three weeks. If we do not
* hear from you prior to shipment, we will assume the revised date is
* acceptable, and will ship your order. We apologize for any inconvenience.

* Your business is very important.* If you would like an iPod sooner, we are
* offering to replace your iPod mini with a 15GB iPod at no additional charge.
* This model usually ships within 24 hours. Taking advantage of this offer is
* easy:

* By email:* Forward this note to customerconfirm@apple.com and check the option
* below.
* ____* Please switch my order from the iPod mini to the 15GB iPod at no
* additional charge.* My order number is ______________.

The 15GB iPod retails for $50 more than the iPod Mini.

[applekid]

15 GB for no additional charge! Impressive.

However, the size and look alone of the iPod Mini are its selling point, so I only foresee a few order changes.

[MarksEvilTwin]

Removed

[realityisterror]

this is very cool of apple...
it can't be cheap...
makes me want to order a mini...

reality

[sinbushar]

i don't see how this can be considered a bad thing at all....go apple

[lindmar]

wow,, I agree..

Nice move on Apple's part....

too bad though for those who really wanted mini's

[LaMerVipere]

I just ordered a silver iPod mini last week, and it's not expected to ship before May 17th 2004, but I ordered it with an Edu. discount, I wonder if I will get one of these e-mails, I hope so!

[jesuscandle]

I can't wait to see how the irate folks from the eMac thread spin this to mean that Apple hates its customers and only cares about profit. That's a classy move on Apple's part.

It's interesting, too. It seems to suggest that they internally buy the idea that the 15GB is "about the same" as the mini. IE - they never expected to sell minis based on specs, but rather based on size / looks...

todd

[MattG]

That's pretty nice of them!

I wonder if this is due alone to high demand, or also in part to the problem with the headphone jack that people have been reporting...

[superrcat]

Originally Posted by jesuscandle

I can't wait to see how the irate folks from the eMac thread spin this to mean that Apple hates its customers and only cares about profit. That's a classy move on Apple's part.

It's interesting, too. It seems to suggest that they internally buy the idea that the 15GB is "about the same" as the mini. IE - they never expected to sell minis based on specs, but rather based on size / looks...

todd

First off, I am not saying that this is a bad thing, but you can't say this isn't motivated by profit. Think about it...if the orders keep getting pushed back, then people are just going to cancel. It would be better for Apple to take a $50 hit and offer a 15GB iPod that would ship today instead of having a lot of orders canceled and not collecting on the profit of those orders.

[rfenik]

this sucks. they are probably going to make ipods in color now.

[flyfish29]

Originally Posted by jesuscandle

I can't wait to see how the irate folks from the eMac thread spin this to mean that Apple hates its customers and only cares about profit. That's a classy move on Apple's part.
/ looks...

todd

I do believe it is a great move on Apple's part expecially since it is a marketing nightmare they have created...although I believe they wanted to have demand be greater than supply on purpose just because that is a very effective marketing ploy to drive demand for a new product. This marketing ploy is purposefully done by thousands of companies a year.

However, reality says it costs them very little to provide this offer. We are talking $50 RETAIL...it probably costs them $12.50 more to produce the iPod vs. the iPod mini.

note: the below numbers are estimates, but based on traditional electronic and retail mark-ups and cost figures. The real numbers will not vary by much.

Breaking down the $50 goes like this:

Mfg. and part cost difference $12.50
(the only actual cost they are "eating")

profit for Apple computer $12.50
(not an actual cost)

Sales cost $12.50
(not an actual cost since the apple.com store has mostly fixed
costs associated with it)

AppleStore.com Profit $12.50
(not an actual cost)

so in other words...it only costs Apple $12.50. They do forgo some profits, but not any major real costs. Basically this $12.50 amount goes to pay for the cost (not retail) of a larger hard drive.

Still a great move on apple's part, but I agree with many who say most will just wait...although with the recent talk of defects in the mini's plug maybe more will take them up on the offer.

[numediaman]

Who the hell is in charge of manufacturing at Apple? Why can't they fulfill these orders? Aren't you a little peeved that every time Apple introduces a product they can't seem to deliver it? Jobs needs to kick some behind over at Apple.

(Alternate theory: this is BS can they want to get rid of some 15GB iPods because they can't see them.)

EDIT: no, I don't think this is Apple screwing anyone -- the offer is nice -- but why were orders accepted that they can not fulfill? Don't they have a computer system that allows them to track orders to inventory to manufacturing. is their sales department run on Windows?

[Stewie]

Originally Posted by numediaman

Who the hell is in charge of manufacturing at Apple? Why can't they fulfill these orders? Aren't you a little peeved that every time Apple introduces a product they can't seem to deliver it? Jobs needs to kick some behind over at Apple.?

I don't think apple can be held responsible for all the pieces and parts that go into making a mini ipod. If one of the suppliers of mentioned pieces and parts are not able to keep up that is not the fault of apple, is it?

[flyfish29]

Originally Posted by Stewie

I don't think apple can be held responsible for all the pieces and parts that go into making a mini ipod. If one of the suppliers of mentioned pieces and parts are not able to keep up that is not the fault of apple, is it?

In a way it is Apple's fault. The number one responsibility of a manufacturer is to produce something to ship/sell. If someone can't deliver then they have not communicated enough with their suppliers about their needs, done enough research to see what demand might be, etc. Now, that being said, there are mistakes, but it does seem that Apple seems to have more than others...probably many are due to the fact they are pushing the envelope often with their designs- which is a good thing of course. However, it doesn't mean they should not pay more attention to making insanely great products that ship.

[superrcat]

Originally Posted by flyfish29

In a way it is Apple's fault. The number one responsibility of a manufacturer is to produce something to ship/sell. If someone can't deliver then they have not communicated enough with their suppliers about their needs, done enough research to see what demand might be, etc. Now, that being said, there are mistakes, but it does seem that Apple seems to have more than others...probably many are due to the fact they are pushing the envelope often with their designs- which is a good thing of course. However, it doesn't mean they should not pay more attention to making insanely great products that ship.

But it is not Apple's fault if Hitachi isn't producing the components in high enough quantities.

"Hitachi's Global Storage Technologies company admitted today that it is not churning out enough 1in hard drives to meet demand, but pledged to ramp up production volumes as quickly as it can."

[numediaman]

Originally Posted by Stewie

I don't think apple can be held responsible for all the pieces and parts that go into making a mini ipod. If one of the suppliers of mentioned pieces and parts are not able to keep up that is not the fault of apple, is it?

Yes. If not Apple, who is responsible? It's their product. Are we to blame this too on Microsoft?

[Wash!!]

We all should go to Apple's headquarters burn the building down and execute all the employees and put their bodies on stakes for putting a product that is not perfect and it does not please your particular taste, why? why? oh the humanity!!!!! ... oh I better now....

People get over it, the ipod as well as any other manufactured product will have problems on some units, its just a freaking music player, is not like the fate of the human race depended on it for it to be perfect

[Krizoitz]

Originally Posted by numediaman

Who the hell is in charge of manufacturing at Apple? Why can't they fulfill these orders? Aren't you a little peeved that every time Apple introduces a product they can't seem to deliver it? Jobs needs to kick some behind over at Apple.

EDIT: no, I don't think this is Apple screwing anyone -- the offer is nice -- but why were orders accepted that they can not fulfill? Don't they have a computer system that allows them to track orders to inventory to manufacturing. is their sales department run on Windows?

The orders were accepted because it was believed they could be fulfilled, then a combination of high demand, manufacturing supply problems, and now apparently a quality control issue, has led to mini supply problems.

So before this blows into a huge problem Apple decided to do what they could to make it right. They are offering at no additional cost a 15gig iPod, I can't see that as anything wrong. Its exactly the RIGHT thing to do.

[The Ancients]

Originally Posted by numediaman

Who the hell is in charge of manufacturing at Apple? Why can't they fulfill these orders? Aren't you a little peeved that every time Apple introduces a product they can't seem to deliver it? Jobs needs to kick some behind over at Apple.

(Alternate theory: this is BS can they want to get rid of some 15GB iPods because they can't see them.)

EDIT: no, I don't think this is Apple screwing anyone -- the offer is nice -- but why were orders accepted that they can not fulfill? Don't they have a computer system that allows them to track orders to inventory to manufacturing. is their sales department run on Windows?

Welcome to the world of lean inventory. It's hard to ramp up production exponentially to the degree that demand for certain Apple products can cause. The alternative is to face analysts and stockholders querying high stock levels. It's a fine line, and while some improvement would be welcome, I don't think it is one Apple will be able to hit on the head in the near future.

[idkew]

Originally Posted by numediaman

EDIT: no, I don't think this is Apple screwing anyone -- the offer is nice -- but why were orders accepted that they can not fulfill? Don't they have a computer system that allows them to track orders to inventory to manufacturing. is their sales department run on Windows?

apple accepted a place in line in exchange for the promise that you will pay when it is your turn. they gave out numbers, if you will. they never sold anything to anyone. you are charged when your order ships. then the sale is made. not when you "place your order".

[sonyrules]

I think that was nice of Apple, and besides, helps them move 15 GB iPods out the door for what they have comming next. As far as profit, I dont believe apple is lossing to much in profit because of it. They know what there doing or they wouldnt have done it.

[fpnc]

Well, tonight CNN Headline news had a report on the iPod Mini headphone jack/static noise problem. Thus, if it has gone to that level of notice you can probably conclude that there MAY in fact be a design problem on the mini. In any case, I think it can definitely be said that there are manufacturing problems with the mini. By that I mean that they either have a shortage of parts, limited factory capacity, or a design problem in the hardware (which they are trying to fix). It could be all three and it may not even be Apple's "fault" (e.g. hard disc shortage appears to be a third-party issue).

IMO, the 15GB iPod offer is probably good for customers but bad for Apple's bottom line. How serious this becomes will probably be known in the next month or two.

[Rob Nance]

Originally Posted by numediaman

Who the hell is in charge of manufacturing at Apple? Why can't they fulfill these orders? Aren't you a little peeved that every time Apple introduces a product they can't seem to deliver it? Jobs needs to kick some behind over at Apple.

I'm sure someone has said it, but just in case...

If they ramp up to make huge numbers then after the launch they are left with facilities to produce way too many than their market can support. Then you've got the counter point of "Why don't they just build a bunch and build up their supply before releasing it". Apple is all about cutting edge these days, and we all want stuff now, not later. I think that in general the delays have not been major for product releases, and the reason the Mini has been so bad is because of a drive shortage.

All that said, I would almost bet anything they make more money off the 15gb iPod even at the $249 mini price, so I do think it's a bit silly.

[TimDaddy]

Originally Posted by numediaman

Who the hell is in charge of manufacturing at Apple? Why can't they fulfill these orders? Aren't you a little peeved that every time Apple introduces a product they can't seem to deliver it? Jobs needs to kick some behind over at Apple.

Every time a popular new car comes out, there is a supply shortage. Some models have a six-month waiting list for the first two years or more. I've never been offered a higher priced car at the same price as the one I wanted! I agree that Apple has this problem way too often, but they also have a lot of problems with products that don't sell, so I think its good to have lean inventories. If only a few people accept the 15 gig iPod, that will still shorten the wait slightly for those who really want the mini.