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You guys got it backwards. It's not ridiculous to wait for a backorder. It's pretty common.

What is ridiculous is that out of 1.7m orders Apple has only been able to fill 22% of them. I can understand 70%, 50%, even 40% ... but 22% is pretty bad. It's almost laughable. Makes me wonder if I should cancel because it seems apple is having issues making it.

This is a laughable assertion with no grounding in the realities of manufacturing. Apple pays very good money to establish a baseline manufacturing RATE. You know, how many watches it can make in a day/week/month? It likely costs a few Billion (with a B) dollars to setup the manufacturing chain for this entirely new product category.

Now, here's the problem. How big do you make the factory? 100,000 units/week? 200,000/week? 500,000? If I'm Apple, I have to estimate my steady-state sales. Let's say we figure we can move 4M watches in the first year (or 6 or 8 or 10M). Of that, about half (1.7M) will come as initial orders. And you've set an aggressive release schedule. You finalize hardware in December, with first release due in late April. You have 4 months to finish your factory, then begin production. Based on serial numbers here, we see most production started in week 14 or so or 2015. That's a production start at the end of March. 3 weeks ago.

Do you see the issue now? You're not going to make 1.7M watches in 3 weeks. In fact, they made about 400,000 watches. That's a production rate in the range of 150,000/week. That's pretty consistent with a sales estimate of 4-8M/year (no doubt, they can incrementally increase capacity as they gain experience).

There is no way-shape-form-how that Apple is going to spin up a production line that can make half its anticipated yearly production in the first month, even though about half the orders for the first year will occur on release. This is the fundamental supply problem that a strikingly small number of whiners here haven't bothered to think through. I applaud Apple for getting 400,000 watches out in under 4 weeks. That's very impressive for an entirely new product category, one I doubt any other company could achieve (looking at you, Samsung).
 
I cancelled mine as after a months wait with no updates, the delivery was still 2 months wait away. Seeing later orders than mine delivered, and none at all of the one I wanted being shipped I decided enough is enough.
 
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