Apple 'Blown Away' by iPhone 5 Pre-Orders

[AmpSkillz]

Nit picking tech specs is pointless.

Which one is better: the Galaxy S3 or the iPhone 5? it’s really all about personal preference! Two Great phones, roll with the one that puts a smile on your face

i wasn't nit-picking specs so much, as simply point out his claim that the SG3 already had every single feature that the iPhone did.

i just removed it and said never mind because it WAS pointless before you even quoted me though, lol

 

[Atari5001]

Apple FTW

 

[aerok]

Apple is also leading they way in where the personal computer goes such as abandoning CD/DVD drive in there laptops. Just like how they abandoned the floppy drive in late 90s.

The first netbooks left out all optical drives too... And that was in 2007, way before Apple did.

 

[thasan]

You need that extra staff and you'd need those extra long hours if you dumped all your stock in one go in the volumes Apple now produces for iPhone. Heck, except then you'd maybe be left with a couple of extra units, no line-ups and no media attention.

No, again, I don't buy it.

If you read any supply management book, you will see you estimate your demand and based on that, you build up your inventory, ensure continuous production and then start selling it. The reason is, it uses full capacity of production, do not cause huge inventory problems and your products don't run around from one state to another to meet shortfall in certain places.
Apple will ultimately lose if they can't sell. They won't restrict production or prematurely announce products. But of course, I would imagine they balance it in such a way that also generates 'some' publicity without losing sales. This of course gives them free publicity to absorb the small sales loss they encounter.

 

[aerok]

Years ahead ? Apple and the competition are pretty much neck and neck. Apple borrows ideas and catches up in some instances, the competition does in others.

No one is years ahead or behind of anyone else.

Well in all honesty, Blackberry OS7 seems to some couple of years away from the competition...

 

[mozumder]

Geez guys, it's easy. I don't get what there is to not understand :

1. These launches result in a massive demand burst over the first few days. Demand then goes down to normal levels. This is predictable, Apple will sell phones very quickly in the first few days.

2. If you have a possibility of making 12 million phones for launch, anticpate a burst of 8 million to cover pre-orders and initial launch week sales and know you'll sell the other 4 millions over the course of the next 2 weeks easily then you can skip to 3 :

3. Limit initial offering to 6 million phones. Make sure to allocate a low number to initial pre-orders, around 1 million or so units so that the website quickly shows "Available in 1-2 weeks". This creates scarcity. Send the remaining 5 million to stores, making sure that your big markets get barely enough to cover demand. The "website said they ran out!" scare is in effect, the line-ups will form to get that coveted device first day since it's now impossible online.

4. Launch day, sell out of the remaining 5 million, making sure to leave a few sad faces for the cameras. Trickle extra inventory from your extra 6 million into stores each day, feeding the people who failed to get it on launch day.

5. After 2 weeks, you've sold the same 12 million phones to the same 12 million people had you offered the 12 million units up front. You've also probably managed to sell an extra 2-3 million off the media campaign covering the line-ups and general insanity.

You've lost nothing. You've gained free publicity. Heck, I'd do it if I had a business. No one is saying to sit on inventory long term, just not to dump it all into the market in one go.

Actually they dumped as much as they could on day 1.

They really didn't anticipate the level of demand. No conspiracy theories necessary.

Remember, this is the same company that brought us Ping, so yah, they don't always get it right. They had no guarantee that this iPhone would outsell the previous generation.

Apple normally plays it safe for forecasting.

 

[marksman]

The points you make here, and in your prior posts, are entirely correct. But they lead me to a different conclusion, which is that Apple is too good at this business to have underestimated demand by this much. I can see how they might have run out of supply in a day or two, but in one hour? As you say, they're too capable a company to do that, so the only conclusion I can come to is that they engineered this shortage intentionally somehow, for the PR value.

There is no pr value in running out of supply in one hour instead of twelve. Certainly not worth selling another million devices

 

[sulpfiction]

Actually since the company's sole motivation is profit (greed), they will do whatever it takes to maximize their profit.

Well, short stocking a device isn't exactly "maximizing profits" now, is it? They are on auto pilot right now. They don't need to do anything. It won't last forever, but right now Apple cant do anything wrong.

And apple is no "greedier" then any other company. They just happen to know the formula and it's made them the richest company in the world.

 

[Jbaffoh]

You need that extra staff and you'd need those extra long hours if you dumped all your stock in one go in the volumes Apple now produces for iPhone. Heck, except then you'd maybe be left with a couple of extra units, no line-ups and no media attention.

No, again, I don't buy it.

That makes no sense. Are you saying the retail store overhead would be the same regardless of whether Apple could satisfy all online preorders? Most of your case is premised on Apple's intend to increase retail store frenzy by cutting off online preorders. The more you burden stores, the higher the overhead.

But more importantly, as I and others have said, no rational business would lock up tens of millions in capital, plus incur warehousing costs, for even one day if they could avoid it. Especially in some gamble to manipulate the intangible psyches of consumers who have more, and better, choices than they had a year ago--particularly when the carriers are implementing longer eligibility requirements. Even if this were a poker game, shareholders would not tolerate that bluff.

 

[SqB]

Actually since the company's sole motivation is profit (greed), they will do whatever it takes to maximize their profit.

Only in the past couple of years would anyone automatically associate profit with greed. It's really disappointing.

Profit is:
-innovation
-more jobs
-incentive to invest
-return on investment
-ability to donate to worthy causes

And about 1,000 purely positive things.

 

[marksman]

I might've bought an iPhone 5, but you, sir, don't realize that Samsung is the world's biggest seller now of smartphones, outdoing Apple. Hence why Apple is more Apple v. Samsung than Apple v. Google.

And Samsung makes quality products, and has won everywhere aside from the US, will surely appeal, and will doubtlessly win at some point. As they deserve to. I like competition, and Samsung is probably the big reason we got a bigger screen on our phones.



Wait, what can us customers accomplish together? I'm confused. Apple wins, and I have no problem with this in the free market. Apple stock deserves to climb, they deserve to feel good. But what exactly was your contribution or mine to our own success here? I don't get it.

Yet apple will have the top four selling smartphones this year. That Samsung needs 60 phones go outsell four iPhone models is not really worth bragging.

 

[unlimitedx]

Only in the past couple of years would anyone automatically associate profit with greed. It's really disappointing.

Profit is:
-innovation
-more jobs
-incentive to invest
-return on investment
-ability to donate to worthy causes

And about 1,000 purely positive things.

I agree. Some folks on the forum are quite cynical

 

[aerok]

If you read any supply management book, you will see you estimate your demand and based on that, you build up your inventory, ensure continuous production and then start selling it. The reason is, it uses full capacity of production, do not cause huge inventory problems and your products don't run around from one state to another to meet shortfall in certain places.
Apple will ultimately lose if they can't sell. They won't restrict production or prematurely announce products. But of course, I would imagine they balance it in such a way that also generates 'some' publicity without losing sales. This of course gives them free publicity to absorb the small sales loss they encounter.

But reading any supply management ethics books, you would also know about the term artificial demand, something that exists in our capitalist world. Nobody besides Apple would know if they do indeed create artificial demand...

 

[thasan]

You can't be in the field of sales or manufacturing.

There isn't enough space here to teach, but: (and this is what any company does)

Sales plans what they think they can sell. Since it's all guesswork, they use previous numbers, add new markets, consider a certain amount of saturation.

They also have to guess how many in white, black 16 GB 32 GB 64GB etc.

That info goes to manufacturing.

Manufacturing tells sales how long it will take to produce all of that.
(Factories and sub suppliers can only make X amount of pieces a day)

Manufacturing needs to be even keeled so employees don't sit on their hands when the big rush is over or they have to let go people.

At an introduction they then estimate a certain amount of pieces made for the spike.

Say the factories can make 1 million a day and a company thinks the initial sales are 5 million, the company takes a launch date multiplied by when production is ready and announces shipments will start the 15th (when the 5 million are ready)

Nobody in their right mind binds capital and fills up a warehouse to not ship , so consumers think there are shortages.

Especially Apple doesn't have to do that . Until they introduce a dud product, all their stuff sells immediately until they can make enough of it.

Then comes the day of truth and the company finds out what is really selling and they either planned wrong (and would sit on what they produced) or the
demand is so overwhelming that the factories can't keep up.

The "I must have it now or I am going to die" mentality of consumers who can't wait, does not play into any companies planning.

So, when Apple says they were blown away by the order numbers , it just means only one thing:

Whatever they planned to sell whether it was a conservative plan or an optimistic plan was sold out and exceeded their expectations/plan.

That is all there is to this conspiracy and mystical "They are holding back"
theory.

To pile 5 million phones into a warehouse to be able to make it look as if there is a shortage makes no sense whatsoever.

The money laid out to make these phones and the warehouse space would be wasted.

Apple is smarter than that!

Very elegantly put mate

 

[aerok]

Yet apple will have the top four selling smartphones this year. That Samsung needs 60 phones go outsell four iPhone models is not really worth bragging.

Any achievement is worth bragging.

 

[SqB]

...and another thing. Each iPhone in the hand is truly the best advertisement for the product. People see it and they want it. Holding back stock, for this and the other reasons mentioned, would be a huge mistake that would not make.

 

[nbnbxdnb]

I tried one of those galaxy phones from Samsung last night in an ATT store, while my gf was ordering her iphone5. It worked fine, but not as well as my iphone 4 in my opinion. When I scrolled in the web browser, it lagged a little bit every a few seconds. The worst part is that it is loaded with some apps from ATT, which look just like ads to me.The general feeling is cheap.

 

[j4zb4]

i wasn't nit-picking specs so much, as simply point out his claim that the SG3 already had every single feature that the iPhone did.

i just removed it and said never mind because it WAS pointless before you even quoted me though, lol

Apple claims 8 hours on LTE... I would assume we get 6.5 in real world usage... SIII has LTE since 6 months... How much usage time on LTE does it give...?

And frankly LTE doesn't matter to me... Here 3G has just rolled out a year ago... lol...

 

[aerok]

...and another thing. Each iPhone in the hand is truly the best advertisement for the product. People see it and they want it. Holding back stock, for this and the other reasons mentioned, would be a huge mistake that would not make.

Well they are technically holding back stock at this moment for the store launch...

 

[thasan]

But reading any supply management ethics books, you would also know about the term artificial demand, something that exists in our capitalist world. Nobody besides Apple would know if they do indeed create artificial demand...

Yes, sure. Its all part of the game. And I think many companies take advantage of these. not sure about apple or Samsung. But again, there are other ways or making people excited...like saying...how many phones are 'supplied' instead of actually being 'sold'. And we know certain companies do that too..they are all here to make money and free or positive publicity. I actually heard from my Korean colleague ( and a proud Samsung fan) that Samsung employs people to put positive comments on blogs, forums and even product news about their products. Not sure iwhether its true or not but it sure is fascinating

 

[jasonph]

OBVIOUSLY the parts were new. The technology for the parts wasn't. There was no huge engineering hurdle. This iPhone was being made for well over two years with NO new technology. Yet they couldn't meet demand? Come on

I think you may be wrong on that score. We have a thinner display using in-cell technology, we have a reworked SOC (possibly Arm cortex A-15 or A-9) at either 32nm or 28nm, we have the new Qualcomm LTE chipset to work into the mix, a new super slim unibody chassis to try and fit everything in, new antenna designs, new battery chemistry (these new slightly higher voltage batteries), software to support all this new hardware. That's a lot of engineering work and software design before we start.

Then you have testing, tooling up, manufacturing processes, supply logistics, etc.

All of this does not happen in two seconds. I certainly wouldn't like to think of all the processes that are required to bring a new device to market. Hence why Apple probably use a chassis two years in a row to reduce design and tooling costs.

 

[aerok]

Yes, sure. Its all part of the game. And I think many companies take advantage of these. not sure about apple or Samsung. But again, there are other ways or making people excited...like saying...how many phones are 'supplied' instead of actually being 'sold'. And we know certain companies do that too..they are all here to make money and free or positive publicity. I actually heard from my Korean colleague ( and a proud Samsung fan) that Samsung employs people to put positive comments on blogs, forums and even product news about their products. Not sure iwhether its true or not but it sure is fascinating

Well that phenomena is everywhere now, Amazon is shock full of positive ratings left by employed people.

Like they say, any publicity is good publicity, even if it means announcing to the world they sold out within the hour. That news was everywhere...

Edit: Either way, most of the top tier Samsung products score high anyways, they don't need to pay people to get that, Apple does not either.

 

[SqB]

Well they are technically holding back stock at this moment for the store launch...

I would expect that a very large number of devices that will sell on launch day are still in the line, or not even started. Devices to be delivered on the 21st are most certainly boxed and rolling right now.

 

[thasan]

I tried one of those galaxy phones from Samsung last night in an ATT store, while my gf was ordering her iphone5. It worked fine, but not as well as my iphone 4 in my opinion. When I scrolled in the web browser, it lagged a little bit every a few seconds. The worst part is that it is loaded with some apps from ATT, which look just like ads to me.The general feeling is cheap.

Cheap build is also my feeling. Siii in my opinion, has a beeaaautiful display. And the one I tried out was super fast (my friend was from Germany, not sure about his operator). Scrolling photos were also amazingly fast. But when he saw photos from my 4s, he started cursing. Then I looked at his photos which were so heavily processed in phone (automatically for low light I think, he said he didn't edit) that I couldn't stop laughing

 

[aerok]

I would expect that a very large number of devices that will sell on launch day are still in the line, or not even started. Devices to be delivered on the 21st are most certainly boxed and rolling right now.

Still, thoese who ordered after it sold out have to wait 2-3 weeks, meaning 14-21 days. Well after the store release date, so yes, Apple is holding back some stock. Nothing wrong with that, I'm just saying that your statement is not very true.

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Cheap build is also my feeling. Siii in my opinion, has a beeaaautiful display. And the one I tried out was super fast (my friend was from Germany). Scrolling photos were also amazingly fast. But when he saw photos from my 4s, he started cursing. Then I looked at his photos which were so heavily processed in phone (automatically for low light I think, he said he didn't edit) that I couldn't stop laughing

Low light pictures always looks better on a 4S. But compare outdoor daylight pictures and the S3 wins hands down.