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Over 500,000 iPads Sold, Apple Delays International Delivery until May
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He forgot to refer also to the scores of "foreigners" who work at Apple Headquarters and so on...
I didn't "forget" anything. I wasn't trying to be harsh or even that serious either. Just the fact that since Apple is still an American company, they're gonna give us the stuff first. It's just how it is. So there's no point in getting bent out of shape over it.
French fries aren't French and chips (fries) were invented in Belgium
That is a LIE!
Next you will try to tell me that the Eiffel tower is not in NYC.
I have a question for LTD if he's around:
Where are those who said the iPad would fail now, Sir? I would love to hear from them...
They've changed their arguments from "it will fail" to "only the sheep are buying it."
Then when it sells well into the millions a la iPods and everyone has one or wants one, they'll say "why get one when everyone else has one?"
Like I always say, envy and frustration is a hard road.
I didn't "forget" anything. I wasn't trying to be harsh or even that serious either. Just the fact that since Apple is still an American company, they're gonna give us the stuff first. It's just how it is. So there's no point in getting bent out of shape over it.
By that logic, China would get everything first.
While I don't think Apple intends for undersupply per se, I think that in the doubt, they guess low very intentionally.
As many have pointed out, they have a history of doing this.
There are a couple of reasons this makes sense for them.
1. If you get to little supply, it leads to positive press and buzz about the product.
Remember the ipod, and the ipod mini, etc.? Every week in the tech, business, and sometimes front section, you'd get a story about people going to great lengths to get one for christmas, with this insane demand. Apple is about buzz, and a shortage helps create it, while a surplus kills it.
2. If you get too much supply, you've got to cut prices to get rid of product.
Apple is loathe to do this - it says that the product is not worth as much as apple says it is, and perhaps that the whole brand is in the same boat. Apple is about brand, and having to work to get rid of oversupply really hurts the brand.
How many times will apple wait forever to update a product so that they can let supplies of the old one dwindle, only to release the new and better one at a lower price? Clearly the old one doesn't cost more to make, and it isn't helping apple to have an out of date product, either. But if they cut the price to move it, you see failure there, you see having paid too much for it in the first place. If they wait and make the next one cheaper, they get better buzz about the new version, and you see the incredible pace of apple's innovation making you want the new one, rather than having paid too much for the old one.
3. Apple has to make wild guesses about supply often. They bet big on products with big unknowns as a course of business.
So, apple has learned to do low risk, high hype, high brand building behavior here. Other companies don't really need to do this, because they aren't running like apple is. Most companies sell a ton of different products, innovate rarely (preferring to buy or imitate smaller companies who have proved an idea successful), and when they do make something bold and new, they start small and let the product grow. Even google, insanely innovative, opts for a proliferation of interesting side projects that don't take up that many resources, and then watches to see what grows and needs more support.
Not apple. While apple's bets are usually safer than they appear (they think things through) and they very intentionally sit on a very large pile of cash, should things ever go bad, it's still huge. Let's assume that they make commitments for about a year's supply at a time. roughly, I'm calling iphone's first year sales 4-5 million, and it looks like ipad is already well ahead of that, (without the wifi version). So let's say we see sales of 10 million the first year, which I feel is conservative.
Now, look at the ipad. It's unprecedented. It's unnecessary. It's unbelievable. Sales are totally unknown, and nobody should be surprised if apple sells double or half of their predictions. Including apple.
So if apple overestimated by double, they'd have an extra 10 million ordered, which at 500 bucks a pop (I'm very roughly balancing out the variety in models sold with apple's typical 30% margins and saying, let's price it at the cheapest model) is a FIVE BILLION DOLLAR LIABILITY. You can argue with numbers here, and about the pricing model, etc., but you'll still end up with what, a 2 BILLION dollar liability?
Yikes.
Now, underestimate by half, and you're potentially missing out on 2.5 Billion in revenue (I know, I know, I'm mixing revenue and costs and margins messily, but I'm lazy, and this is getting long). But you're still getting 2.5 bil, while giving the brand huge cachet and earning a very healthy margin. Adjust the next version's volume accordingly, and you just might be able to cash in on all the hype and anticipation enough to make up for the money you left the first time around.
As many have pointed out, they have a history of doing this.
There are a couple of reasons this makes sense for them.
1. If you get to little supply, it leads to positive press and buzz about the product.
Remember the ipod, and the ipod mini, etc.? Every week in the tech, business, and sometimes front section, you'd get a story about people going to great lengths to get one for christmas, with this insane demand. Apple is about buzz, and a shortage helps create it, while a surplus kills it.
2. If you get too much supply, you've got to cut prices to get rid of product.
Apple is loathe to do this - it says that the product is not worth as much as apple says it is, and perhaps that the whole brand is in the same boat. Apple is about brand, and having to work to get rid of oversupply really hurts the brand.
How many times will apple wait forever to update a product so that they can let supplies of the old one dwindle, only to release the new and better one at a lower price? Clearly the old one doesn't cost more to make, and it isn't helping apple to have an out of date product, either. But if they cut the price to move it, you see failure there, you see having paid too much for it in the first place. If they wait and make the next one cheaper, they get better buzz about the new version, and you see the incredible pace of apple's innovation making you want the new one, rather than having paid too much for the old one.
3. Apple has to make wild guesses about supply often. They bet big on products with big unknowns as a course of business.
So, apple has learned to do low risk, high hype, high brand building behavior here. Other companies don't really need to do this, because they aren't running like apple is. Most companies sell a ton of different products, innovate rarely (preferring to buy or imitate smaller companies who have proved an idea successful), and when they do make something bold and new, they start small and let the product grow. Even google, insanely innovative, opts for a proliferation of interesting side projects that don't take up that many resources, and then watches to see what grows and needs more support.
Not apple. While apple's bets are usually safer than they appear (they think things through) and they very intentionally sit on a very large pile of cash, should things ever go bad, it's still huge. Let's assume that they make commitments for about a year's supply at a time. roughly, I'm calling iphone's first year sales 4-5 million, and it looks like ipad is already well ahead of that, (without the wifi version). So let's say we see sales of 10 million the first year, which I feel is conservative.
Now, look at the ipad. It's unprecedented. It's unnecessary. It's unbelievable. Sales are totally unknown, and nobody should be surprised if apple sells double or half of their predictions. Including apple.
So if apple overestimated by double, they'd have an extra 10 million ordered, which at 500 bucks a pop (I'm very roughly balancing out the variety in models sold with apple's typical 30% margins and saying, let's price it at the cheapest model) is a FIVE BILLION DOLLAR LIABILITY. You can argue with numbers here, and about the pricing model, etc., but you'll still end up with what, a 2 BILLION dollar liability?
Yikes.
Now, underestimate by half, and you're potentially missing out on 2.5 Billion in revenue (I know, I know, I'm mixing revenue and costs and margins messily, but I'm lazy, and this is getting long). But you're still getting 2.5 bil, while giving the brand huge cachet and earning a very healthy margin. Adjust the next version's volume accordingly, and you just might be able to cash in on all the hype and anticipation enough to make up for the money you left the first time around.
That's all well and good, and completely irrelevant to my post. The whole point I was getting at is that Apple had to have known by the developers conference last week that they would be running low on ipads and thus wouldn't have enough to launch internationally by the end of the month. Hell, they probably knew before then. It's not as if the extra 50 000 ipads sold was some sort of shock to them. So, instead of announcing it last week, they waited until the developers conference was well over, and they had tempted foreign developers with sales numbers etc.
If they'd announced this last week that they had insufficient supplies to meet their deadline it would have been looked on as a bad thing and put off foreign developers. Now, because they've waited a week and already had the developer's conference they can spin it as a good thing - "Oh, we're selling way more ipads than we expected!". It is nothing but a marketing ploy to try to manufacture demand. They knew this was coming all along.
Have you ever used this company? They are UK companies but based in HK, the stock is usually sent from oversea and I had to pay custom charges...
You are partly right; just don't forget that Apple already got burned in past times for underestimating demand and not being able to fulfill it later - PowerBooks at their launch, and later SOHO PowerMacs.
This is especially risky in a consumer market that may be more elastic for some products (especially in light of competitors' releases).
So if Apple is saying this, it's not inventing stories at all: it's a fact and it has to be rectified quickly in international markets.
Ha! A company lies about supply and demand and you swallow it hook, line, and sinker.
The last refuge of a scoundrel company when an item is tanking is to hold up supply to hopefully try and create artificial demand.
Oldest trick in the book.
If you ever want to contact *LTD* just start a post in some slight way criticizing Apple. (If it's really urgent though its faster to praise Adobe).
This is good news. Demand is beyond expectation. That is better than the opposite. As to those who complain Apple doesn't ramp up demand fast enough, lets see them commit resources like that. It is very hard. Especially with cutting edges.
Hmmm. Cliff is actually the only guy on the board that I have marked as a buddy. He is very reasonable and has a good sense of humor. And I'm a European. And I'm pretty sure that Cliff agrees that just as many tools live in the US as in Europe... And I don't mean percentage wise
Thanks for the informaton. I will download a few of his products when I get a chance. I like card games.
So your few visits to Heathrow mean you are 100% sure the guy won't be stopped? I have seen many people stopped - why might that be?
Advising someone to break the law (which is what you did be telling them to use the Nothing to Declare route) is not very smart, would you be happy to pay the fine for them?
Your personal limit for importing goods into the UK is £145, after that you must pay VAT and Import Duty. One iPad would take you over the limit right away.
Not declaring the import will result in the VAT and Import Duty being levied and a hefty fine.
Good advice?
Justice
This is what the EU gets for attacking American innovation, smarts and good business practices. Sue Microsoft, sue AAPL, how many European designed computers are for sale in the world? In fact what has the EU given anyone in the last 20 years. All they are good for is formulating rules on cheese, let them eat cake. I hope they have to wait until 2011 for an iPad.
This is what the EU gets for attacking American innovation, smarts and good business practices. Sue Microsoft, sue AAPL, how many European designed computers are for sale in the world? In fact what has the EU given anyone in the last 20 years. All they are good for is formulating rules on cheese, let them eat cake. I hope they have to wait until 2011 for an iPad.
Ha! A company lies about supply and demand and you swallow it hook, line, and sinker.
The last refuge of a scoundrel company when an item is tanking is to hold up supply to hopefully try and create artificial demand.
Oldest trick in the book.
You do realise that your post is an act of libel?
Apple would be well within their rights to sue you for defamation.
http://en.wikipedia.org/wiki/Defamation
Defamation—also called calumny, vilification, slander (for transitory statements), and libel (for written, broadcast, or otherwise published words)—is the communication of a statement that makes a claim, expressly stated or implied to be factual, that may give an individual, business, product, group, government, or nation a negative image. It is usually, but not always,[1] a requirement that this claim be false and that the publication is communicated to someone other than the person defamed (the claimant).