iPhone 5s Inventory Said to Be 'Severely Constrained' at Launch

[illicittech007]

It's a nice phone but no enough to make me wanna upgrade from my iPhone 5 there's no to manny differents from the 5 to the 5s for the average user they won't event tell the differents went it comes to the internal differences so if u have a iPhone 5 just save ur money and ur upgrade for next year for the next generation iPhone! Everyone is getting iOS 7 that's like having a new iPhone!! Without spending a dollar!
* send from my iPhone cinco *

 

[Rocketman]

Why? Besides the novelty factor, what percentage of people would use their phone in wet conditions, under water or in the toilet?

Rain, humidity.

 

[CFreymarc]

So you think stores are going to be full of phones on Friday? Because the only thing Wall Street cares about is getting a press release from Apple next Monday saying they sold a crap load more phones than they did last year this time.

My prediction for the week is this:

Thursday night: Lots of reports about people waiting over night and the typical Apple haters ridiculing them. I'm sure Fallon if not Letterman will joke about it.

Friday morning: TV crews cruse the Apple Store lines, the occasional interview and such. Even a helicopter shot showing the lines in New York, LA and San Francisco flagship stores.

Friday afternoon: "Great demand for Apple iPhones!" plaster the media including this web site.

Saturday morning: Media gone, additional crates of iPhones show up filling orders of people coming in over the weekend.

Saturday evening: Apple stores back to normal with the exception of the Genius bar booked to handle new iPhone support.

Sunday evening: Genius bar back to normal.

Monday: Whole Apple supply chain back to regular operation with a boost in Apple stock price the morning of trading.

 

[AidenShaw]

When has the iPhone had ample launch inventory since the first phone? It will be sold out in a few hours and it will be months before you can walk into a store and buy one any time you please. Just as it has been for the past few years.

And that's about the best way to handle supply chain management....

There's a huge demand initially from people who want to upgrade, or switch, or who are just too important not to have the latest, most expensive, Iphone.

There are basically three ways to handle this:

1. Start building them months before the release, so the initial surge can be satisfied from the stockpile. Downside: Huge cost for inventory that isn't generating any revenue.
2. Contract (or build) extra factories so that they can be manufactured to demand. Downside: Idling the factories and laying off workers once the initial peak is met.
3. Stockpile a few, and harness any idle factory bandwidth temporarily. You won't meet the peak, but before too long you'll catch up. Downside: Long lines/waits for the product. Upside: Long lines/waits for the product make it seem insanely popular.

Apple does #3 for every phone release. It's the best way for them to pump the most money from your pocket for the least cost.

 

[CFreymarc]

Why? Besides the novelty factor, what percentage of people would use their phone in wet conditions, under water or in the toilet?

The "harsh environment" use of the iPhone is estimated to be as much as 10% of the user base. From this companies like Otterbox, InDepth and Lunatik thrive with their expensive but very capable rugged environment cases.

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When has the iPhone had ample launch inventory since the first phone? It will be sold out in a few hours and it will be months before you can walk into a store and buy one any time you please. Just as it has been for the past few years.

The launches of the iPhone 4, 4S and 5 had the supply chain back to normal in a matter of days after launch. I'm sure the same goes here with a bunch of 5C and 5S already in crates with the grand logistics master at Apple watching media and stock price controlling stock deliveries day by day.

I'm sure a three month supply if iPhone 5C / 5S are already built and ready to go as I type this. They are just playing the crowd now like a band backstage waiting for just the right moment to do a curtain call.

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I can see your point, but there is a huge market of teens out there who aren't nearly as interested in quality as they are fashion. When my teen asked for an iPhone, I told him no because it was too expensive to upgrade from his old phone. For a lot of parents, 100 bucks could be the difference between a yes and no. With the teens, the colors just adds more incentive to pressure parents into buying them.

You hit the nail on the head. The comeback of Apple went into overdrive with the "candy color" iMacs in five different colors. While it wasn't much of a change from the first iMac, it sold like crazy with everyone wanting different colors. This 5C is right out of Steve's playbook.

While us geeks don't give a damn about color and some are miffed there is not an all black iPhone 5S, the social, app crazy, youth market will gobble this up.

Also, I predict that the majority of iPhone 5C users are ladies of ages 15 to 35.

 

[marksman]

You know absolutely nothing about apple if you think they have a three month supply of anything.

 

[scat999999]

I'm pissed. I decided after two white iPhones, I'd go back to the black like my original one and really liked the Slate. Now they replace that with the Space Gray, which I don't really want. I decided I'd get the Gold this time, but now it's looking like they're gonna shove that SG one down my throat. I want to trade my 4S in, so I have to do it in the store. Grrrr...

 

[Tknull]

Funny are the replies that show frustration over not having a new phone on launch day. An arbitrary day. Are people that "competitive" that they need to be first? It's a phone.

Apple could have said the launch date was a month from now and then you could have it on day one. So you would be waiting the same amount of time. So clearly it must be that others have the phone before you? Wow.

I suppose you wait until Dec 26 to open your christmas presents?

 

[Edd.Dantes]

When did I say the case underwent a major redesign? There's a whole lot more to a phone than the case. I'd like to see you try to make a phone call with only the back shell of an iPhone. My point was that you can make major changes to a phone without changing the case.

I shouldn't even have to explain this, just look at the 5s and 5c. Which phone shares the most in common with the iPhone 5? That would be the iPhone 5c. Which one is the most different? The iPhone 5s. Which phone has the more different case? The 5c... Clearly the design of the case isn't what dictates what is and is not a major redesign. The case can be part of a major redesign, but it doesn't have to be. The iPhone 5s is sufficiently different from the iPhone 5 that there are numerous components that could be delaying production.

No offense intended but... what?! That just gave me a headache. It's ok to be wrong dude. I am often wrong but I think you got a little too offended by my generic ranting.

Bring it in, no homo

 

[Lancer]

NFC will not be the future, is just a stepping stone for something better and the reason why apple as not included it into their products.

So why do some people make such a big deal about it?

But I guess you're right, if Apple already has similar tech in place that work like NFC but without having an extra chip inside the phone then I hope it catches on.

 

[macs4nw]

Why does this happen EVERY year? Apple, why the hell can't you figure this supply chain thing out and start a month of two earlier than normal - or add a few production facilities/expand teams or something?
Every time a new iPhone comes out it's a total pain in the butt for weeks on end for people. (And I typically pre-order - but that obviously wasn't available this time) It's frustrating.

Reminiscent of Dec 2012's 27" iMac, that wasn't readily available until some time in Jan 2013. However if an acknowledged supply-chain guru like Tim can't make this 'work' flawlessly, you can be sure there are other considerations at play here, be it sensor-supply bottlenecks, or a little artificially created demand perhaps, but this is definitely not due to Apple's incompetence.

Keep in mind, there isn't much of a ramp-up window they have to play with. To include the latest technology, they don't have the luxury of months and months on end to stockpile sufficient quantities for launch; by then that 'latest tech' would be stale again. Then there is the problem of leaks. With too much lead time, it's even harder not to let the competition steal your 'thunder'. Also a disproportionate amount of tech gadgets are bought in that Q4 (Apple's Q1) Miss the boat there, and that too could affect the bottom line.

And there are I'm sure, a myriad of external factors and other considerations that even a company as large and influential as Apple has little or no control over, that come into play, and ultimately decide whether a product launch ends up being lacklustre or a resounding success.

 

[HenryDJP]

It's a nice phone but no enough to make me wanna upgrade from my iPhone 5 there's no to manny differents from the 5 to the 5s for the average user they won't event tell the differents went it comes to the internal differences so if u have a iPhone 5 just save ur money and ur upgrade for next year for the next generation iPhone! Everyone is getting iOS 7 that's like having a new iPhone!! Without spending a dollar!
* send from my iPhone cinco *

Yes...and no. I mean, yes iPhone 5 owners don't need to upgrade. Not sure why any iPhone 5 users would feel this upgrade was for them anyway. iPhone 3GS/4/4S users will find this to be a big upgrade. I'm one of them.

Sorry to say this but even if you didn't mean it your post comes across as someone who's trying to justify his iPhone 5 purchase by downrating the iPhone 5. There's still plenty enough difference between the 5 and the 5S to upgrade but this upgrade is best suited for anyone with an iPhone before the 5.

 

[Orlandoech]

More like typical Apple marketing tactic....sold out worldwide!!!!

Lol true. Didn't think of that.

 

[MajkJaro]

I hope that in Poland 5c will be really cheap so people could see what Apple gives in term of phones. Apple products in Poland are overpriced and one of most expensive in the world.

rMBP13 early13 costs 2350 $...

 

[paulsdenton]

Not a simple refresh

People who think this phone (5S) is a simple refresh should read the complete review on Anandtech. It is a whole new product and an engineering triumph and likely a bear to manufacture in its early runs.

Anandtech (Anand Lal Shimpi) is a completely and transparently neutral commentator. He isn't anybody's fanboy.

Basically his review says the iPhone 5s is groundbreaking in numerous dimensions. (In my opinion not his) it is the difference between chicken salad and chickens**t.

Everybody else has a lot of catching up to do now.

It will probably take some time for production to catch up with demand.

 

[AppleScruff1]

The launches of the iPhone 4, 4S and 5 had the supply chain back to normal in a matter of days after launch.

Not around here. It was a couple of months before you could walk into the Apple store and buy a 4S whenever you wanted. They got limited numbers everyday and if you weren't waiting when the store opened, you didn't get one. The 5 became readily available sooner, but it was hardly in a matter of a few days.

 

[rikscha]

My wife is at a hospital right now, about to give birth to our first child.

I feel so bad that I can't be with her right now as I've joined the line at the Apple store Fifth Avenue. So stoked!

There is only one iPhone 5s launch day in your lifetime but you can produce many more kids. Go for it!

 

[dol4n]

There I corrected it for you.

OMG I laughed so hard at the office.... getting wierd looks now!

 

[peterdevries]

Isn't creating a false sense of demand to raise sales "basic business"?

Since there are no preorders for the 5S, how do they know it will be constrained when they have no idea how many people are going to want it on launch day? Maybe there will be lines down the block and maybe you can just walk in and get one because there aren't long lines. Who knows?

Just more typical Apple pranks.

Do you have any factual basis for those statements?

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NFC will not be the future, is just a stepping stone for something better and the reason why apple as not included it into their products.

Exactly. Here in Europe it is not really catching on. The reason is that stores are now starting to use dedicated apps with electronic payments. It has the added advantage (for the retailer) of being able to monitor purchases and to direct advertisements to you based on your buying behaviour.

In addition with GPS integration these apps will be able to notice when you are in the vicinity of a store and alert you to special offers etc, to entice you to come inside. None of these things are possible with NFC.

NFC is less functional and adds significant hardware cost to a retailer.

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Apple's logic in capacity is crazy and flawed.

The fact they double capacity for $100 is nuts. The profit made on 32GB and 64GB models is outrageous. I think the cost was once posted that Apple pays $8-11 more for the 32GB and $16 more for the 64GB.

So Apple is charging $200 more for the 64GB and their costs only increase by $16.

Apple's logic is not crazy and flawed but a perfect awareness and implementation of price elasticity. It has nothing to do with the actual cost of the memory. It might seem stupid from a your perspective, but from a business perspective it makes perfect sense. It's economics 101.

Here, read this: http://blog.priceintelligently.com/blog/bid/154374/Price-Elasticity-101-The-Necessities-and-Your-Pricing-Strategy

 

[samcraig]

I suppose you wait until Dec 26 to open your christmas presents?

Well for one I don't celebrate Christmas. But if I did, if someone told me what they were getting me a week before or a month before, I wouldn't get pissed off on how long I had to wait. Ultimately I'll know that I would be getting it. And if it was a replacement for something I had a great working product of already, I'd be content enough to not whine about not having it sooner. It's not like my old device stops working the second I am aware of a newer one.

 

[rols]

well one datapoint .. iPhone orders from one of the 3 telcos in Singapore, Singtel, started at 4pm today. By 4.03 all the gold were gone, by 4.05 all the silver were gone, the gray have slowly been depleted until down to I believe just 16Gb left and it's now just coming up to 7pm.

The last I checked all iPhone 5C were still available.

So that says to me some combination of low supply of and higher demand for the gold and silver.

Also, either the availability of two models, higher stock in general, or less interest than usual means they didn't sell out in the usual 10 minutes which is what's happened the last few years. Which of those it was I cannot honestly say, I'll be interested to see how many stations they have running on Friday, the launch goes on 12 hours a day for 3 days.

 

[WilliamLondon]

I don't believe for a moment that Apple intentionally constrains supplies, companies don't do that, they want to ensure they have enough stock to meet *all* demand (if possible) so they don't lose one sale, while not spending too much on warehousing and stockpiling stock *around the planet* (not an easy task). It's a fine balance, they don't get it always right, but oversimplifying it or declaring conspiracies is just plain ignorant.

I would like to think that this is so; but the level of mindless vituperation that pervades many of these posts does make you wonder about the motivations of the posters. Really goes beyond "disappointment".

Sadly it's nothing new, it's a trend that's been happening on this forum for quite a long time that it's really cool to come here and be extremely negative, not constructively critical or respectfully disagreeing or possessing opposite opinions, but full-on negative trolling (from all sides). It's sad, the forum used to be a place that was much more fun to discuss Apple products, and these days it's being taken over by the all these juvenile negative nellies.

 

[studlybw]

It's a nice phone but no enough to make me wanna upgrade from my iPhone 5 there's no to manny differents from the 5 to the 5s for the average user they won't event tell the differents went it comes to the internal differences so if u have a iPhone 5 just save ur money and ur upgrade for next year for the next generation iPhone! Everyone is getting iOS 7 that's like having a new iPhone!! Without spending a dollar!
* send from my iPhone cinco *

But you forget about the M7 Motion coprocessor. Wait until apps are developed for it and you can't run them. It won't be long until you'll be envious of all of your friends with the 5S.

 

[samcraig]

But you forget about the M7 Motion coprocessor. Wait until apps are developed for it and you can't run them. It won't be long until you'll be envious of all of your friends with the 5S.

This comment is interesting. I have to ask why he would necc "envy" his friends. Could he not just decide that having a newer phone benefits him now that these new fictitious apps have been created and he thinks they will be of use to him?

Personally I don't "envy" other people and their new(er) phones.

Just an interesting word choice.

 

[unplugme71]

I'm pretty sure they've been running production at full capacity for at least two months now. People grossly underestimate how difficult it is to produce the volume of phones Apple sells on opening weekend.

plus the time it takes to ship here, unload, sort, ship, unload

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Now take that logic to Starbucks and you realize that a lot of companies do this. Is a venti Mocha twice the cost of a tall? Nope. Actually it's about 5¢ more cost. It's business man, get used to it....

That's why I buy a tall and get free refills.

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exactly! Apple has absolutely crazy markups for extra storage. that's the chief reason why the 64GB model is not as popular as the lower capacity ones.
Here is a link to iphone 5 BOM from last year.

The BOM difference between 32GB and 64GB models was just 21$ then. It should be even less now. I suspect that the BOM difference for a 128GB version (if they were to make one) would be in line with those numbers. I really wanted a 128GB 5S - I'm tired of constantly swapping songs and audiobooks and my music library is not all that big. I'm always amazed how people manage things with just 16GB. One more things to consider is the 64-bit switch. as I understand it, once the devs start upgrading their app they'll make universal binaries which include both 32-bit and 64-bit versions as was done during the OS X switch to 64-bit. That will make the apps bigger. I don't know by how much (can somebody comment?) but given the storage constraints of iphones every little bit counts.

It's fine if Apple wants to put a 30-40% markup, but the markup they have with the current models is a lot more than that.

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I agree man, it's ridiculous that they are still charging that much even though NAND prices have dropped.

Exactly, they should be offering 32, 64, and 128 for those prices at the least.