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Supply nonsense

profmjh

profmjh

macrumors 68000
Original poster
Mar 7, 2015
1,734
1,800
UK
Can someone explain the business case for Apple having ridiculously low levels of supply of a new product right before Christmas.

By the time I heard of the existence of APMs, shipping had already slipped to 6th January. Within a few hours it was 12-14 weeks.

How can this make any sense?

I though Tim Cook was Apple’s great logistics expert. Master of supply chains.
 
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Impossible to say exactly where the constraint is. It could be in manufacturing. More likely it’s that Apple underestimated demand. This is a highly niche product for Apple, so forecasting likely had a wide variance. Ideally Apple would perfectly match supply to demand, perhaps with a slight constraint to imply a shortage. I’m doubtful they want to delay deliveries by months.
 
profmatt said:
Can someone explain the business case for Apple having ridiculously low levels of supply of a new product right before Christmas.

By the time I heard of the existence of APMs, shipping had already slipped to 6th January. Within a few hours it was 12-14 weeks.

How can this make any sense?

I though Tim Cook was Apple’s great logistics expert. Master of supply chains.
Click to expand...

The logic is simple - Apple never intended to meet AirPods max demand ahead of the holidays.

When you have a new product that includes a number of industrial design breakthroughs, always assume supply is going to be very limited in the short run.

We can go back to the original AirPods launch in December 2016. It would take years for AirPods supply to meet demand, and in hindsight, it’s clear that Apple never had the intention of having the AirPods be a big seller for the 2016 holidays.

Instead, I imagine the thinking is simply that the AirPods max are ready to go, so may as well start selling them now vs waiting for supply to meet some arbitrary level of demand, or for manufacturing issues to be ironed out.

On the bright side, my guess is that the estimated 12-14 week delivery date is simply a very cautious overestimate, and as the preorders come in, it will give Apple a clearer idea of how much of each quantity to produce, and I expect the dates to improve accordingly.
 
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profmatt said:
Can someone explain the business case for Apple having ridiculously low levels of supply of a new product right before Christmas.

By the time I heard of the existence of APMs, shipping had already slipped to 6th January. Within a few hours it was 12-14 weeks.

How can this make any sense?

I though Tim Cook was Apple’s great logistics expert. Master of supply chains.
Click to expand...
Gotta remember also, it’s not just apple. Every company is experiencing delays due to COVID. Whether it’s supply or shipping.
 
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Is it better (from a logistics and profit point of view) to make to few or too many? So you can see why Apple errs on the side of caution
 
Abazigal said:
On the bright side, my guess is that the estimated 12-14 week delivery date is simply a very cautious overestimate, and as the preorders come in, it will give Apple a clearer idea of how much of each quantity to produce, and I expect the dates to improve accordingly.
Click to expand...

This statement has been accurate over time and it appears to be again here. My order wasn't 12-14 weeks, but it was 12/29 (after Christmas). I just got an email this morning that said that my order should be delivered by 12/23 - so that was a pretty decent move up for my shorter window. I would imagine longer shipping windows will also get better.
 
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Probably they knew they will have supply issues at launch , but to be able to cover demand for the holidays they wouldve needed to triple or even more the production lines and staff , this cost a lot of money for such a short burst , because once inital demand wades down they will effectively be stuck with dead production lines and idle staff , there will be a clause in the contract with the manufacture partner that they cannot just order 80% less just after the holidays.
So all in all the expectation they will do great out of the gate , and then Apple will evaluate the on going demand and adjust.
 
profmatt said:
There’s erring on the side of caution and there’s wildly underestimating demand. Three months shipping lead times is a massive fail.
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Why is it a massive fail ? .... simply because you can’t get them when you want them ? .... let’s wait and see if it is 12-14 weeks.

IMHO there could be many reasons for an apparent shortage some of which will be beyond the control of Apple.
 
ukms said:
Why is it a massive fail ?
Click to expand...

Because any "normal" user who wanted to buy these as a Christmas gift is totally SOL and will do something else instead (most likely)...

Nobody other than uber tech dorks (all of us on the forum here for example) was informed and trigger happy enough to immediately go drop half a thousand dollars on a totally unknown new Apple headphone product .... and by the time they were perhaps comfortable doing it, the shipping dates were months out.
 
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turbineseaplane said:
Because any "normal" user who wanted to buy these as a Christmas gift is totally SOL and will do something else instead (most likely)...

Nobody other than uber tech dorks (all of us on the forum here for example) was informed and trigger happy enough to immediately go drop half a thousand dollars on a totally unknown new Apple headphone product .... and by the time they were perhaps comfortable doing it, the shipping dates were months out.
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Well any normal user can still buy them today in store ..... perhaps any sensible business minded individual might see it as a win not a fail that the initial shipping stock has sold out ..... perhaps Apple has held back stock to trickle into the stores in the lead up to Xmas so that high street shoppers stand a chance of buying (stores on London still have stock as I type), perhaps not .... so many on this forum describe it as a ‘fail’ because they didn’t get their way or weren’t quick enough to order ;)

I guess your suggested alternative would be to delay the release until there was sufficient stock to fulfill your order once you had made up your mind.
 
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They launched a brand new product during a global pandemic and likely underestimated how many people were okay with $550 headphones. Seems fairly straightforward and a win for Apple overall. If people want Apple specific headphones they will order them and just gift a printout of the order for the future; they’re not going to suddenly grab Bose or Sony headphones that have been out for months if what they want are H1/ecosystem friendly AirPods.
 
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It looks like Space Grey and Silver jumped ahead more than a month with delivery in mid February instead of mid to late March! I wonder if they ramped production a bunch or if a vast amount of people canceled their far out orders?
 
musicpenguy said:
It looks like Space Grey and Silver jumped ahead more than a month with delivery in mid February instead of mid to late March! I wonder if they ramped production a bunch or if a vast amount of people canceled their far out orders?
Click to expand...

Maybe it's all just a cat and mouse game to keep people thinking "we don't have many on hand! Buy now!!" - lol

More seriously - we can infer almost nothing about the popularity of any Apple products based upon shipping dates.
 
It’s an absolute shambles what a farce. If anyone speaks to Mr Cook ask him how has he allowed this roll out to happen like this. They could not even roll out a carpet.
 
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Again, I think it will all adjust to earlier times. Upon order, we were given a 12/29 date. Then shortly after, we were updated to 12/23. Then today, one pair (we ordered two) was delivered today, 12/19 and our other pair is coming 12/21. Both were engraved. So, shipping dates are moving up. As with countless other orders, they have underpromised and over (and earlier) delivered.
 
turbineseaplane said:
Maybe it's all just a cat and mouse game to keep people thinking "we don't have many on hand! Buy now!!" - lol

More seriously - we can infer almost nothing about the popularity of any Apple products based upon shipping dates.
Click to expand...
Ebay prices are a relatively good predictor though. The sold prices have gone low enough now that you’re either losing money or making a few bucks depending on state taxes or shipping. That usually means low demand. Especially on something that’s back ordered for months.
 
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