The problem with the lobster example is that no one came to Apple and said "you need to deliver a million watches on April 24". Apple came up with that date all on their own and thus should have had their 10,000 friends properly trained with paper in hand well in advance of said date in order to deliver. It's still a monumental manufacturing and delivery task but Apple was arguably in a far better logistical position than the example. I still think it's a great blog post though.
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A pretty convincing explanation
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The problem with the lobster example is that no one came to Apple and said "you need to deliver a million watches on April 24". Apple came up with that date all on their own and thus should have had their 10,000 friends properly trained with paper in hand well in advance of said date in order to deliver. It's still a monumental manufacturing and delivery task but Apple was arguably in a far better logistical position than the example. I still think it's a great blog post though.
There is much more to this release than building the product and shipping it to customers.
This is possibly Apple's biggest product launch for a new category ever, with an estimated 2.3 million sales in just the first couple of days.
And with that comes technical and customer support. Tons of it.
Apple absolutely has to stagger the release in order to scale their support systems to handle this new influx.
Sure, the representatives have received training, but it could be a potential disaster for all these customers to receive product on day one, or even over the span of a week.
Some will argue with this viewpoint, saying Apple sold 10 million iPhone's last time around, but the reality is all bets are off with an entire new product category.
This is possibly Apple's biggest product launch for a new category ever, with an estimated 2.3 million sales in just the first couple of days.
And with that comes technical and customer support. Tons of it.
Apple absolutely has to stagger the release in order to scale their support systems to handle this new influx.
Sure, the representatives have received training, but it could be a potential disaster for all these customers to receive product on day one, or even over the span of a week.
Some will argue with this viewpoint, saying Apple sold 10 million iPhone's last time around, but the reality is all bets are off with an entire new product category.
you know that won't fly here at MR. LMAO!
Of course it makes sense. A watch is decidedly a fashion item. A phone is not a fashion item even though it's become fashionable to have a nice phone.
Mad Mac Maniac
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Definitely a good analysis and a good description of the complexity of the challenge Apple faces.
I still disagree with his assertion that Apple Watch 2.0 will be software only (with perhaps new bands and a new color). First of all, I don't believe the sales are sustainable over a 2 year cycle. Secondly, it would be easy (by Apple's standards) to simply update the S1 to an S2. This would (presumably) have the ability to make the watch more powerful, more efficient, perhaps add more memory/storage, perhaps even add GPS.
I just don't see upgrading the S1 to be a complex enough problem to allow Apple to risk the possibiliy of flopping sales over the second year.
I still disagree with his assertion that Apple Watch 2.0 will be software only (with perhaps new bands and a new color). First of all, I don't believe the sales are sustainable over a 2 year cycle. Secondly, it would be easy (by Apple's standards) to simply update the S1 to an S2. This would (presumably) have the ability to make the watch more powerful, more efficient, perhaps add more memory/storage, perhaps even add GPS.
I just don't see upgrading the S1 to be a complex enough problem to allow Apple to risk the possibiliy of flopping sales over the second year.
Your conclusion has a lot of holes.
Your 5 million number is being bandied about by precisely NOBODY but you. (so far 900,000 & 2.3 million are the expert guesses)
"For anyone waiting for a sleeker more refined Apple Watch 2.0, I believe you will have a long wait."
I felt the same way so I ordered the minute it was available just like I did with the first iPhone and iPad. Get in on the ground floor. Waiting for the next version will only award you with time lost.
Very nice article and well written I'm guessing because it came from an analytical person versus an opinionated user.
I felt the same way so I ordered the minute it was available just like I did with the first iPhone and iPad. Get in on the ground floor. Waiting for the next version will only award you with time lost.
Very nice article and well written I'm guessing because it came from an analytical person versus an opinionated user.
I disagree. All the report was speculating was that Quanta produces 1 million "insides" per month and that Apple was building up an amount of inventory necessary to satisfy the initial pent-up demand. Now that they have an idea of the mix they can adjust their actual production accordingly. I'm a little surprised more of the 38mm models haven't moved to "June" but that suggests that the mix is skewing more toward the 42mm model (and likely a higher mix of men vs. women than Apple was expecting), though the unavailability of the Modern buckle suggests a supply chain issue that Apple is working its way through.
Clearly a million people did come to Apple on April 10th and said "I want a watch".
The 5 million figure came from the blog post referred to by the O.P.
Did you even read it before posting?
What a great post. Really shows how amazing Apple's supply chain management is. And I think it makes sense that they've produced a batch of every model and band in boxes, but then packing the rest as the pre-orders came in.
Just looking forward to receiving mine.
Just looking forward to receiving mine.
I read all of the words. (& understood them!!) =D
Perhaps they changed all the numbers between when I read it & when you "read" it??? Or maybe the quote "Ive built a simple model that predicts that the initial run of watches was more than 3 million units" means "5 millionz has been solded!!" where you are from?
Regardless.
Your assumption is as stupid as they come. The Apple Watch didn't only have interest for the first hour & now nobody wants one...
They will likely not reach order parity until late, late summer... possibly early fall. If you are right, I will apologize profusely (and then eat my hat!)
You are wrong. That is all.
OK - I'll try and explain this very, very slowly. The report stated that apple were building one million a month starting January. In the three months up to April they would have built three million - right? Do you follow? Fine, now (think about it) if Apple are building one million a month from January, and have three million to sell by the April, how many do you think they'll have by June?
Why do you think they could not have increased production already, let alone increase production as time passes?
This article is as much baseless speculation as any typical rumor. And guess what? Nobody is ever going to get a concrete answer to any of these guesses. Apple is not going to release sales quantity, they already stated that. They aren't even going to break out revenue, it will be blended with Apple TV and the rest of the Other group.
It's going to be nothing but guesses with no validation for the foreseeable future.
But, betting on Apple having insane restrictions on production that last indefinitely is pretty shortsighted.
Look....
You are wrong.
Sliced any which way.... still wrong.
If I thought two plus two was five... you'd still be wrong.
You are wrong.
Pretty, pretty please bookmark this post & come back in July to laugh and poke fun at me & laugh maniacally at my idiocy IF they end up with a crazy surplus of Apple Watches because, as you claim, after the first day... the orders & interest dried up and nobody else wants one.
I'm not worried about this happening at all!!! Want to know why??
Because you are wrong.
As I said in my original post - if the articles is correct there are two possibilities
a) Apple have massively ramped up production. Say X4. I'd say this is unlikely.
b) Orders have dried up.
If you're asking what I personally believe I'd say the author of the article has got it wrong. I believe supply was severely constrained and possibly Apple only had two million to sell by June. They're ramping up production and should be producing a million or more a month now. With that in mind I'd expect Apple to sell around 10-14 million of these in the first year, which would be an incredible achievement as Rolex sell less then a million watches a year.
I'm starting to believe the refresh of the actual hardware won't be aggressive like the iPhone. However, I am expecting maybe new case materials/colors along with new bands and maybe smart bands that use the port under the band connector?
For those frantically asking when version 2 is coming out, and hoping it is within 6 months (hahaha), read this from the article:
For anyone waiting for a sleeker more refined Apple Watch 2.0, I believe you will have a long wait. Given the challenges in ramping up the production lines for these Watches, I expect that Apple Watch 2.0 will simply be a software update to the existing core electronics with additional bands and possibly another case color. Apple has plenty of room to refine its Watches for at least a year without changing the hardware one bit, and such an approach would amortize its production investments. Further, keeping the platform constant over one to two years ensures that developers have a consistent platform to create software for. To my mind, new Apple Watch 2.0 form factors are likely to wait until 2017, and its possible they could take longer than that.
For anyone waiting for a sleeker more refined Apple Watch 2.0, I believe you will have a long wait. Given the challenges in ramping up the production lines for these Watches, I expect that Apple Watch 2.0 will simply be a software update to the existing core electronics with additional bands and possibly another case color. Apple has plenty of room to refine its Watches for at least a year without changing the hardware one bit, and such an approach would amortize its production investments. Further, keeping the platform constant over one to two years ensures that developers have a consistent platform to create software for. To my mind, new Apple Watch 2.0 form factors are likely to wait until 2017, and its possible they could take longer than that.