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  • Apple Responds to Allegations of "Intentional Product Shortages"



    On more than one occasion, more than just a few MMi readers and contributors have speculated on our forums that Apple could very well be supporting intentional product shortages - that is, knowingly producing fewer iDevices than necessary to meet current demand and, therefore, drive demand even further.

    Well, if you missed it during all the hoopla surrounding the release of Apple's rock 'em sock 'em 3rd quarter earnings late yesterday afternoon, executives in Cupertino were put on the spot during the earnings conference call and bluntly asked if supplies can't keep up with demand because that's the way Apple prefers it to be. It was Gene Munster with Piper Jaffray who finally pushed Apple Chief Operating Officer Tim Cook into the admission (one that some will, naturally, still doubt the validity of) that Apple is doing everything it can to work with parts suppliers to make as many iDevices as consumers want in the fastest time possible.

    "We do not purposely create a shortage for buzz," Cook told Munster. "We are selling every unit we can make," he said. Ultimately, Cook pointed to the iPad and its unexpected sales success as the biggest culprit for supply shortages. Ahead of the product's release, Apple planned to mass produce one million iPads per month. Even with such an aggressive initial product run, the company manged to consistently eat through supply reserves, selling 3.27 million iPads in the quarter of the tablet's release.

    Apple Insider
    This article was originally published in forum thread: Apple Responds to Allegations of "Intentional Product Shortages" started by Michael Essany View original post
    Comments 28 Comments
    1. billmilo's Avatar
      billmilo -
      Apple is perfect. They never do anything wrong.
    1. tremerone's Avatar
      tremerone -
      OR....they are secretly fixing all of the phones, and it's a good opportunity with the white iphone 4 release! Fix em and ship em. Then wait for the next batch, fix em and ship em.
    1. Mes's Avatar
      Mes -
      While it is always a good marketing ploy to generate 'buss' with a perceived and/or manufactured shortage ---- Apple products have consistently out-sold expectations. Far more than analysts thought, far more than I ever expected.

      For sure, Apple makes great products. They always have.

      I only wish they would relax their absolute control and give more consumers a greater opportunity to use their iDevice like they want to use it, not just how Apple wants us to use it.

      They can have their cake and eat it too!
    1. whereswaldo's Avatar
      whereswaldo -
      What do you want them to say? "Yes we made a shortage so we could take less peoples money"
    1. hollow0's Avatar
      hollow0 -
      That shortage nonsense is made up by fools who want to create a buzz. That BS story should be put to rest already.
    1. jOnGarrett's Avatar
      jOnGarrett -
      Quote Originally Posted by whereswaldo View Post
      What do you want them to say? "Yes we made a shortage so we could take less peoples money"
      my wife got her i4 on launch day, I wanted the white one so I "waited" until its expected "release date" that came and went so I ordered a black one, two weeks into waiting for my phone, I get an email telling me that my order was canceled !!

      they are holding back but not to make less money but to fix the antennae issue.
    1. bobymicjohn's Avatar
      bobymicjohn -
      I would just like to say that i have purchased every one of apple's iPod touch and iPhone products since the original iPhone, and each one has had their own problems, but none like the iPhone 4. I am truly disappointed in Apple's quality (as well as quantity) and overall handle on this situation.

      I purchased my iPhone 4 a few days ago and the day i open it out of the box and plug it in to iTunes it is in restore mode, instead of the usual mode its new products are in. So i restore to a opy of the 4.0 firmware (hoping to eventually jailbreak) but it gives me an error. So i figure what the heck ill just update. Again an error. So i try about 20 more times 20 different ways with no luck. SO the next day I drive 2 hours to my nearest apple store and luckily for me they had a replacement. I go home with a new iphone.

      So the same day I open it up, sync it, activate it, and call my buddy to try out the face time. But he cant hear me. Microphones broken. I call apple support, they say its a hardware issue blah blah blah. So i got 3 options, drive 2 hours to an apple store and hope for a new one, for 30$ i can order one and have it in 48 hours, or send min in and they see if they can fix it (appox. 10 business days).

      But i gotta have a phone for my job and because of the new sim cards i cant just switch back to my 3gs. So i call in sick the next day, drive to an apple store, they dont have any i order one for 30 dollars, they ask for the broken one i have now, i give it to them they check the box. ooops left my usb cable at home. Can't return it with out a usb cable. WTF i have a draw with at least 30 of those damn things in my house but thats 2 hours away and im not looking to drive 6 more hours just to get rid of this damn phone so i spend another 30 bucks to buy a new goddamn cable at the store just so i can return the stupid piece of crap for the second time. Im just hoping the third times the charm.
    1. southfrisco's Avatar
      southfrisco -
      It is only business. Obviously they are going to err on the side of caution and produce conservative numbers of their products. This is also what they do with earnings estimates on Wall Street.

      Undercut to sell more. You don't want to be a Palm or Kin where you produce far more devices than sell. You are wasting money (not earning it) this way by housing the unsold merchandise. Not to mention the company being out the costs to manufacture said unsold devices.
    1. skiptowncat's Avatar
      skiptowncat -
      Quote Originally Posted by bobymicjohn View Post
      I would just like to say that i have purchased every one of apple's iPod touch and iPhone products since the original iPhone, and each one has had their own problems, but none like the iPhone 4. I am truly disappointed in Apple's quality (as well as quantity) and overall handle on this situation.

      I purchased my iPhone 4 a few days ago and the day i open it out of the box and plug it in to iTunes it is in restore mode, instead of the usual mode its new products are in. So i restore to a opy of the 4.0 firmware (hoping to eventually jailbreak) but it gives me an error. So i figure what the heck ill just update. Again an error. So i try about 20 more times 20 different ways with no luck. SO the next day I drive 2 hours to my nearest apple store and luckily for me they had a replacement. I go home with a new iphone.

      So the same day I open it up, sync it, activate it, and call my buddy to try out the face time. But he cant hear me. Microphones broken. I call apple support, they say its a hardware issue blah blah blah. So i got 3 options, drive 2 hours to an apple store and hope for a new one, for 30$ i can order one and have it in 48 hours, or send min in and they see if they can fix it (appox. 10 business days).

      But i gotta have a phone for my job and because of the new sim cards i cant just switch back to my 3gs. So i call in sick the next day, drive to an apple store, they dont have any i order one for 30 dollars, they ask for the broken one i have now, i give it to them they check the box. ooops left my usb cable at home. Can't return it with out a usb cable. WTF i have a draw with at least 30 of those damn things in my house but thats 2 hours away and im not looking to drive 6 more hours just to get rid of this damn phone so i spend another 30 bucks to buy a new goddamn cable at the store just so i can return the stupid piece of crap for the second time. Im just hoping the third times the charm.
      That's just crap luck, it was quite funny to read. Though I wouldn't be laughing if I was in your situation!!
    1. macsoldier's Avatar
      macsoldier -
      Either way the products are still great, there will always be a demand a high demand at that for the main line in APPLE. I say let them do this the right way by learning from there mistake ( releasing without ample testing ) and then mass produce and everybody is happy I mean heck could you imagine if they screwed up anything else with the white Iphone or still had antenna issues coming off the racks, this would cost apple a crap load of money for cases and bumpers and refunds would just keep rolling in. I say let them take there time a product of this stature needs to be done the right way this time.

      yea i agree id be pissed off too, hope third time is a charm.
    1. slowman's Avatar
      slowman -
      Yeah I'm still waiting on mine. Hoping I don't get the shaft! I went to a Best Buy mobile store with my friend so he could pick up his new Droid X and they had a surplus of iPhone 4 there! I was like WTF. They just had them available to anyone, they weren't to fill orders or anything, just chilling for anyone who walked in and asked about them. Why couldn't I get one since I've already paid for it at my ATT store??
    1. RICO_'s Avatar
      RICO_ -
      And next year when the next epic most perfect geniusly innovated iPhone 5 comes out, and they are spending millions and millions on advertising and boasting that it will be the best ever, and everybody in the world will be wanting one and lining up 6 months prior to get it......... Apple will still have a shortage and not produce enough and claim once again they were caught by surprise. Really Apple? After all these years of epic sales and record revenues you're still caught by surprise? Give me a break. I find it both offensive and laughable when a company can pretend its consumers are complete idiots.
    1. screamforme02's Avatar
      screamforme02 -
      Yeh iv been waiting for mine for what seems like forever (a week) and i talked to att and they said it should ship by the end of the month. If i get a canceled email i going to go crazy. I also think the three week expected delivery does have something to do with trying to fix the antenna problem. I could care less i want my phone now!!
    1. santacruzlocal's Avatar
      santacruzlocal -
      Availability ... The only reason I live in the US
    1. TheDirtyDiddler's Avatar
      TheDirtyDiddler -
      Quote Originally Posted by RICO_ View Post
      And next year when the next epic most perfect geniusly innovated iPhone 5 comes out, and they are spending millions and millions on advertising and boasting that it will be the best ever, and everybody in the world will be wanting one and lining up 6 months prior to get it......... Apple will still have a shortage and not produce enough and claim once again they were caught by surprise. Really Apple? After all these years of epic sales and record revenues you're still caught by surprise? Give me a break. I find it both offensive and laughable when a company can pretend its consumers are complete idiots.
      I think the jump from iPhone 4 to iPhone 5 is going to be like the jump from the 3G to the 3GS. There aren't many more new "features" they'd be likely to implement at this point. I think the main focus will be on a new source of power rather than the battery we're used to.
    1. RICO_'s Avatar
      RICO_ -
      What kind of power source?
    1. wolverinemarky's Avatar
      wolverinemarky -
      well im still waiting on release date of the white iphone 4 so i can join the new iphone 4 family my 3G just looks like an old dinosaur lol
    1. ursweetsacrfice's Avatar
      ursweetsacrfice -
      I ordered mine on the 17th...and will probably be waiting forever. this is ridiculous. If they are fixing the problem, they should let us know. Then maybe consumer reports will recommend the iphone 4 and I probably wouldnt be this upset. The end of the month? UGH!!
    1. cartman13's Avatar
      cartman13 -
      Quote Originally Posted by RICO_ View Post
      And next year when the next epic most perfect geniusly innovated iPhone 5 comes out, and they are spending millions and millions on advertising and boasting that it will be the best ever, and everybody in the world will be wanting one and lining up 6 months prior to get it......... Apple will still have a shortage and not produce enough and claim once again they were caught by surprise. Really Apple? After all these years of epic sales and record revenues you're still caught by surprise? Give me a break. I find it both offensive and laughable when a company can pretend its consumers are complete idiots.
      And you are going to buy the extra phones if they dont' sell out? Of course they want to produce at a shortage. Who wants to be left with surplus inventory. As a company why would you gear up production volumes for initial launch when the actual volumes will be much lower after the initial launch. They make very calculated decisions on how much capacity to bring on board. Capacity costs money so they weigh that against lost customers due to long waits. They are running a business, not a public service.

      Of course that douche bag schumer might disagree.

      But the real question is, did you buy an iPhone 4?

      Cause if you did then give ME a break, cause they just offended you, slapped you in the face, laughed at you and you said, thank you sir, may i have another!
    1. RICO_'s Avatar
      RICO_ -
      Quote Originally Posted by cartman13 View Post
      And you are going to buy the extra phones if they dont' sell out? Of course they want to produce at a shortage. Who wants to be left with surplus inventory. As a company why would you gear up production volumes for initial launch when the actual volumes will be much lower after the initial launch. They make very calculated decisions on how much capacity to bring on board. Capacity costs money so they weigh that against lost customers due to long waits. They are running a business, not a public service.

      Of course that douche bag schumer might disagree.

      But the real question is, did you buy an iPhone 4?

      Cause if you did then give ME a break, cause they just offended you, slapped you in the face, laughed at you and you said, thank you sir, may i have another!
      I'm not saying they have to produce a massive surplus of inventory, but a modest surplus would be reasonable.

      To this day people continue to buy the 3GS and even the 3G. So certainly any surplus of the next gen iPhone would more than likely sell by the end of the fiscal year.

      Right now the iPhone 4 has sold a little over 3 million units right? Say they upped their initial production launch number to 5 million. If they sold a modest 2 million units just during the first launch week, u don't think they would sell the remaining 3 million by the end of the fiscal year?

      And no sir I have not bought the iPhone 4 yet.