iPad 3 Display Supply Constraints to Result in Early Shortages?

[cere]

I'm sorry, but i've just burst out laughing reading that.

There's no such thing as holding back inventory on the release days. If you're such a PR genius, you should already know that super massive sales number on the launch week gonna give them advantage on a very large scale, and that extends to Apple's stocks performance. You see, that's the very reason Apple got free press on papers all these years.

And nope, I do not have personal attachments on Apple devices. In fact, I'm using an Android phone right now. It's just that your reasoning is pretty silly. I'd bet you'll gonna be out of business really soon if that's your kind of PR and marketing strategy

I'm going to go out on a limb and assume he isn't working for Chiat Day

Imagine walking into a job interview at a top tier agency and giving that as one of your best marketing ideas in your portfolio. I am not sure what would be worse, the laughter from the interviewer or the stunned silence as they stare at you trying to figure out if you are serious.

 

[biggest father1]

iPad 3 FTW!!!

I've never been to an iPad launch before. I really didn't know people waited in line for it! I would if I could!

 

[uknowimright]

start up the Samsung is throttling production conspiracy theories, I'll go get my popcorn

 

[FanDroid]

Just part of Apple's marketing strategy. Nothing new here.

Seriously, are you high?

 

[bjmach]

This just in Steve Jobs still alive! Spotted on Mars!

DigiTimes Reports

 

[ugahairydawgs]

Seriously, are you high?

No. You?

 

[cere]

start up the Samsung is throttling production conspiracy theories, I'll go get my popcorn

It would make far more sense than the Apple throttling conspiracy.

 

[TallManNY]

I'm ordering mine (32Gb with 3G/LTE) for home delivery, if it doesn't show up right away, so be it. No big deal since I have the iPad 1 and it is working fine. My only concern and issue is if this version doesn't have LTE and a rumor comes out that LTE will get supported in the summer. Then I will have to decide if I want to wait until the summer for an LTE supporting iPad.

Now who to hand off the iPad 1 to? Sister? Girlfriend? Who gets it?

 

[samcraig]

Apple will sell record units whether or not they hold back inventory. Why is this so hard to understand? At the end of the day (or quarter) it becomes a wash because after the initial "throttle" - the inventory opens up. In the meantime, Apple not only gets press for their launch - but even more "value" because they devices are so hard to come buy. People waiting in long lines. Etc.

I say people are naive to think otherwise because Apple has done it in the past with great success.

I also find it amusing that people think that what I'm stating is anti-Apple in anyway. It's not. Their marketing and sales strategy works year after year and so does their press machine.

 

[Apple Key]

Maybe the image is just really low quality, but the pixels don't look as organized in the second image as in the first one.

 

[Blorzoga]

Line or Online!? What to do, what to do!?

Both... Then return the one you get last

 

[uknowimright]

It would make far more sense than the Apple throttling conspiracy.

no it wouldn't Apple doesn't have a contract with itself it has to abide by

 

[cere]

Apple will sell record units whether or not they hold back inventory. Why is this so hard to understand? At the end of the day (or quarter) it becomes a wash because after the initial "throttle" - the inventory opens up. In the meantime, Apple not only gets press for their launch - but even more "value" because they devices are so hard to come buy. People waiting in long lines. Etc.

I say people are naive to think otherwise because Apple has done it in the past with great success.

I also find it amusing that people think that what I'm stating is anti-Apple in anyway. It's not. Their marketing and sales strategy works year after year and so does their press machine.

Because in the mean time, those unsold units generate no money and the potential customers might buy something else. It isn't like Android hasn't done well in the cell phone market and is now trying to do the same with Tablets. Handing customers over to them would seem counter productive for Apple sales, no?

 

[FanDroid]

I'm going to go out on a limb and assume he isn't working for Chiat Day

Imagine walking into a job interview at a top tier agency and giving that as one of your best marketing ideas in your portfolio. I am not sure what would be worse, the laughter from the interviewer or the stunned silence as they stare at you trying to figure out if you are serious.

Well, that kind of strategy actually works for foodstuffs like groceries, meats and veggies.

Maybe he's just a marketer for another line of work

This just in Steve Jobs still alive! Spotted on Mars!

DigiTimes Reports

LOL, i thought every single site on the planet already avoid DigiTimes for their shoddy reporting.

Seriously MacRumors, never take DigiTimes seriously.

 

[cere]

no it wouldn't Apple doesn't have a contract with itself it has to abide by

...and Apple might sue Samsung over the contract? Does it seem like Samsung is all the concerned as regarding Apple and lawsuits?

 

[DiamondMac]

I'm hopeful for online ordering. Lining up last year was... unpleasant.

Especially if DigiTimes has managed to get one rights with this rumor.

Online Ordering may be just as...unpleasant

 

[TallManNY]

No. Are you?

I think the point that is trying to be made is that this idea that Apple has a strategy to create demand and hype by intentionally under-producing products, and that Apple thinks this will lead to larger sales in the future is that this idea doesn't make any sense. What does make sense is that it takes a long time to make millions of brand new pieces of equipment and that demand for such equipment is at its highest when none of the demand has been satisfied (i.e., before sales start). So it is inevitable that there will be shortages for a high demand complex brand new piece of equipment when it is initially introduced. Apple would like to satisfy the demand as fast as possible, especially in an area like the iPhone and iPad where competitors are continuing to advance their products. Apple would like to sell you an iPad or iPhone as fast as possible so that (a) you don't buy a competitors product and (b) you can start the cycle of getting ready to buy a replacement in a year or two. Apple is not intentionally creating shortages.

 

[uknowimright]

...and Apple might sue Samsung over the contract? Does it seem like Samsung is all the concerned as regarding Apple and lawsuits?

that's a whole other division of Samsung dude, I don't seem to recall hearing they have had any trouble cranking out processors for all the Apple devices

 

[cere]

Well, that kind of strategy actually works for foodstuffs like groceries, meats and veggies.

Maybe he's just a marketer for another line of work

Next, we will see Apple sending out a memo to stores to only hire from the local hooters restaurants since that will help bring even more people into their stores. Or maybe they'll just start closing their stores every other day to generate even more demand. Heck, if we get really lucky, they'll do a Touchpad like blowout sale to really crank up demand without making money. Nothing creates lineups like a firesale.

 

[URFloorMatt]

It would make far more sense than the Apple throttling conspiracy.

I have a dream that one day we'll live in a world where supply throttling is no longer something people believe is a viable strategy for any business at any time. Because it's just absolutely not. For every re-sale that occurs on eBay, that's a lost sale to the producer of the good.

And the idea that Samsung gains economically from constraining the supply of screens for the iPad 3 is equally nonsense. A sale is a sale. If Samsung thought it could do better without selling screens to Apple, then it wouldn't sell them. It gains nothing from selling them to Apple and then doing a poor job delivering the goods on time.

I'm not saying some companies in some instances have never practiced throttling; I'm just saying, from an economic perspective, it is about as dumb an idea as they come.

 

[cere]

that's a whole other division of Samsung dude, I don't seem to recall hearing they have had any trouble cranking out processors for all the Apple devices

Still the same company, guided by the same corporate strategies.

 

[samcraig]

Because in the mean time, those unsold units generate no money and the potential customers might buy something else. It isn't like Android hasn't done well in the cell phone market and is now trying to do the same with Tablets. Handing customers over to them would seem counter productive for Apple sales, no?

Right. Because the iPad has real competition? No. If someone wants an iPad - they aren't going to buy something else.

I think the point that is trying to be made is that this idea that Apple has a strategy to create demand and hype by intentionally under-producing products, and that Apple thinks this will lead to larger sales in the future is that this idea doesn't make any sense. What does make sense is that it takes a long time to make millions of brand new pieces of equipment and that demand for such equipment is at its highest when none of the demand has been satisfied (i.e., before sales start). So it is inevitable that there will be shortages for a high demand complex brand new piece of equipment when it is initially introduced. Apple would like to satisfy the demand as fast as possible, especially in an area like the iPhone and iPad where competitors are continuing to advance their products. Apple would like to sell you an iPad or iPhone as fast as possible so that (a) you don't buy a competitors product and (b) you can start the cycle of getting ready to buy a replacement in a year or two. Apple is not intentionally creating shortages.

And yet - Apple CHOOSES when to release a product. They could certainly produce MORE before beginning to offer them online and in stores.

Again - Apple has done it before. To what degree products get throttled is another matter.

And yes - even Apple can and does underestimate demand. But see my earlier point about choosing the release date. They know how long it takes to make X amount of units. They launch the products strategically balancing the desire to be out with a new product vs demand vs how many units they can have by ARBITRARY date they have chosen.

 

[CJM]

Will be grabbing one online. Who in their right mind wants to wait in a line?

 

[cere]

I have a dream that one day we'll live in a world where supply throttling is no longer something people believe is a viable strategy for any business at any time. Because it's just absolutely not. For every re-sale that occurs on eBay, that's a lost sale to the producer of the good.

And the idea that Samsung gains economically from constraining the supply of screens for the iPad 3 is equally nonsense. A sale is a sale. If Samsung thought it could do better without selling screens to Apple, then it wouldn't sell them. It gains nothing from selling them to Apple and then doing a poor job delivering the goods on time.

I'm not saying some companies in some instances have never practiced throttling; I'm just saying, from an economic perspective, it is about as dumb an idea as they come.

I would agree, but I do see differences between Apple throttling and Samsung throttling.

If Apple were to intentionally throttle supply, they face the very real, very immediate risk of losing sales. The assumed advantage of increase hype doesn't seem to exist and doesn't seem to be necessary given the continued success.

If Samsung were to intentionally throttle Apple, they would face the risk of losing Apple, but that risk would not be that high since so few other companies have the capacity. And for every sale that apple would lose if Sammy throttled them, Sammy would likely manufacture the display for whatever product the customer chose instead (if not the whole unit).

In terms of risk vs reward, it seems pretty clear that Sammy would benefit more. I am not saying Samsung is throttling, just that if it came down to which one would make more sense to do it, it would be Sammy.

 

[JohnDoe98]

And yet - Apple CHOOSES when to release a product. They could certainly produce MORE before beginning to offer them online and in stores.

Sure but then they need to postpone the release date, making it later.

Again - Apple has done it before. To what degree products get throttled is another matter.

You don't know this, this is pure conjecture.

And yes - even Apple can and does underestimate demand. But see my earlier point about choosing the release date. They know how long it takes to make X amount of units. They launch the products strategically balancing the desire to be out with a new product vs demand vs how many units they can have by ARBITRARY date they have chosen.

Sure, but the date is the last thing chosen. The way it works is, based on demand estimates, they build their product to meet that demand. Once they have a good amount of those built and ready for sale, after testing for quality, they then announce a release date and sell as many as possible from that point on.

Remember, the simplest explanation is often the best one. If you think another explanation is more befitting, you need to explain why that would make sense economically. As many have pointed out, throttling sales or product quantities doesn't make much sense when the product is in as high a demand as Apple products are.