Apple runs short of iPhones

i don't know how people can survive with out an iphone. iphones are the gratest evolution ever.in the cell phone history.nothing compares with it. thanyou apple corp.

And they say we're in a recession? Hmmm…unbelievable!

Mark -

To your last point, I read on a board somewhere a plausible explanation for this: if you treat the $99 as bait, then the relative increased demand for 3GS is explained. People see the "$99 iPhone" price and go explore it, even if they did not consider one before. But then they consider the added benefits of 3GS (x2 memory, much faster, video camera, compass) – and the $100 extra spread over 2 years doesn't mean as much to them.

In short, I think it's the RELATIVE demand that Apple may have slightly mis-estimate it. (I say slightly because, after all, the shortage is much less pronounced than last year, so this all is blown out of proportion anyway)

One and possibly the simplest, explanation for the US shortages is that Apple is not only supplying the original 8 countries, and the 6 that launched this past Friday, but also is beginning to supply the 34 countries with huge supplies for their July launches.

And based on what I've seen at the Apple Store, it seems demand for the $99 3G has been lower, and 3GS demand has been higher than anticipated since the launch weekend.

Wait until they experience the horrible service that AT&T provides. I cannot even get a signal in my house. I am 15 miles from Toledo and 35 miles from Detroit. My calls are dropped constantly. I yearn for my previous Verizon/Blackberry.

I would like to get an iphone. I was eligble for an upgrade awhile ago before the 3gs but the plan is too expensive. It is not the price of the phone, which is nice now at $200 but the price of the plan for 2 years

I think another reason why Iphone 3GS is having huge sale this year is that the original 2G Iphone owners now have finished their old 2 years contract with At&t and they are ready for new upgrades without paying early termination fees or upgrade fees or creating new plans etc.

About the 3Gs: excellent device which satisfies my need. Will enjoy it may be another 2 years.

To Mike in Boston,

Have you tried Apple's website? From there, you will be asked for your current phone number and whether you are a new or existing ATT customer. You will be told what your eligibility is at that time and what the purchase price would be. If you are eligible and agreeable to the price, you should then be able to either order one for delivery to your house (or business) or reserve one to be picked up at an Apple Store (which is what I did).

"I think the restriction about family plans has to do with adding a new line to your plan and purchasing an iPhone. Replacing an existing line with the new unit should be no problem."

Hm… I was trying to upgrade an existing line, and yet was turned me away at the Apple store. They told me that since I was on a family plan they would have no way of verifying my account info (even though I had a copy of a bill and have been eligible for an upgrade for over a year), They said the only way they would sell me one is if I paid the $699 non-contract price. I promptly walked away. I wish I had your experience…

"Unfortunately, because I’m on a family plan, I have to buy it through AT&T directly instead of going through Apple."

I was on a family plan with AT&T and purchased my new iPhone 3GS at the Apple Store with no problem. They activated it at the store and then I went home and hooked it up to my laptop, completed the registration process and transferred all my files from my previous backup all within an hour of picking up my phone on opening day.

I think the restriction about family plans has to do with adding a new line to your plan and purchasing an iPhone. Replacing an existing line with the new unit should be no problem.

Zing…your comment about the iPhone being ugly and square is about the most absurd thing I have ever seen from an apple basher. I do like my iPhone, and apple products in general, but to say the phone is ugly is a real stretch. Are you really comparing the looks of the pre to the iPhone?? Really?? I think most would agree that wether you like iPhone or not, you just can't say it's ugly.

In case you all weren't aware, hFor all those who have not bought an iPhone yet, just wait until next year. The iPhone will be going to Verizon in August of 2010. I have friends who work at both Verizon (development) and AT&T (customer service) and let’s just say with the information that’s been given, there will definitely be a transition. A CDMA iPhone version that will work with a Verizon 4G network is in development. I’ve passed on the iPhone the last couple of years waiting for it to come to Verizon, and it’s going to happen. Those who rushed into buying the new 3Gs will be stuck with AT&T’s crappy service and lagging network.

The iPhone 3Gs has varied availability at apple stores because each store has different shopping patterns, combined with record sales.

The iPhone 3G for 99 bucks is still widely available, but the demand for them is about the same ratio as iPhone 3Gs, since they make less of them now in the 8 gig model only and only in black, people would likely go after the 16 gig 3Gs instead, so it's all relative.

Just try an att store before an apple store, and remember monday is when shipments go out, so tomorrow you may see in store stock going up.

I wonder how many iPhones have been sold, 3G at the 99 price point and the 3Gs at its 2 price points, divided by color options also… Would be interesting to see.

- A

I don't think Apple is over hyped. Their computers work well period. We bought my wife a brand new HP laptop last year for $1000 and it is always freezing up on her not to mention it takes forever to open any program. We though it was a virus but even after using anti-virus software it is still running slow. Not only that my 5 year old G4 iBook is 10x faster than her computer. If you ask me that is not over hyped. Apple just builds a better product hands down.

Andrew says

"I’ve never had the opportunity to use a product such as the iPhone. However, I’ve never been one for phones that have all the capabilities of the internet. If you’re going to use something to browse the internet, use a computer."

That is the most archaic statement I've heard in a long time. I'm surprised the phrase "new-fangled" wasn't worked in there. You've never had the opportunity to use something like a smartphone so you dismiss them. I cannot count the number of times being able to look something up on the web when out and about that has saved me time and money.

Wow….

I've been trying to get one in Boston since they were released, and every time I call any of the (numerous) area AT&T stores they are always sold out without any indication of when they'll get more stock. Unfortunately, because I'm on a family plan, I have to buy it through AT&T directly instead of going through Apple. I don't know what the widget says about Massachusetts, but I can say from firsthand knowledge that we've been sold out since the day they went on sale.

@Alex

it's well known that most companies intentionally cause a shortage to generate buzz and a must have mentality. When people can't get something they want, they obsess on it, driving a more intense demand. Apple does it, Nintendo does it, Sony does it as well as most other big brands.

And guess why. V1.0 of the iPhone didn't have ANY apps. Does that make it any less of a success compared to the Pre? No. Palm is playing catch up, but the iPhone isn't for everyone. Some people need multiple exchange accounts or prefer a physical keyboard.

Why you get defensive for a for-profit company that sells products like any other company is beyond me. They are business to make money. Get over it, it's a damn consumer product. People like you almost make me ashamed to use an iPhone.

Disclaimer:

i use

iPhone 3G 16GB

MacBook

Homemade Home Theater PC running Win7

Main home selfbuilt PC running Vista.

An HP laptop

and my daughter has an iMac G3

To all of the haters -

Weren't you bitching a week ago that Apple records sales by how many phones they ship to the stores instead of at the time of cash register sale? Looks like those sales figures were legit now, even by your standards of actual cash register sales. In case some of you are unfamiliar with inventory practices, it's called "just in time" inventory. Looks like even Apple underestimated the demand for this new iPhone. How sweet THAT must be in this down economy.

Looks like iFanboys went all out.

To all the iPhone and Apple-haters out there:

What's your problem? Why don't you take your aggressions out at the gym? Or spend some alone-time with yourself? Or go and play with your little 18 apps on your Palm Pre.

Supply and demand is tricky and sometimes companies misjudge. I'm not an economics major but perhaps Apple thought that their would be reduced demand due to the 3G users not being able to upgrade. Who knew?

And to all you haters: not every iPhone user is a little poser or teeny-bopper with wealthy daddies. Some people (me) enjoy the (a) experience, (b) integration with Apple computers, and (c) details that make it easy it easy and a true pleasure. My wife even switched from PC to a Mac (after using an iPhone for a 1yr) because of the pleasant experience.

So, take that…

I understand zings point of view, but it is short-sighted. It's like me saying "I didn't order the crayfish at the restaurant today, because the waiter talked it up too much. I just didn't like his attitude.- and besides – everyone else was ordering it."

What a crock! Apple always does this to create demand and get lots of ink. We see this every time they launch a hot item. It's getting old.

hello everybody,

that must be true in usa but in india there is no shortage of supply for apple's iphone it is easily available in the retail outlet.

even i use the same ihone 3g 8gb its awesome i love this iphone u cant compare iphone with any other smartphone

its compatible,smoth in all functions and easy to use

Thats Apple for you

@zing

You bet wrong.

Silly you!

@ TimboM

You say:

" A second benefit tends to be that they create the impression of scarcity, but not so much that it frustrates potential buyers. Apple is very adept at managing that tradeoff."

There is also the possibility that they simply misjudged the demand. As you point out, they try to manage it very closely. So what do you do as a manager on a new launch? You guess the demand, add X% for safety and go with it, hoping that you are not too far over because that is a very costly error.

Now who would have guessed that they would have sold over 1M phones in the first 3 days? Munster, one of the most bullish of the analysts originally suggested 500,000 then upped it to 750,000. So

Apple sold more than 2x Munster's original guess, and you are slamming them for having "managed" this in order to "create the impression of scarcity."

If you can look into some crystal ball and tell Apple exactly how many phones they will need each day at every store, I bet they will pay you good money to get that info, AND they will supply exactly that number to each store.

Zing said: "There is nothing I can’t do with my PC that I need a mac for. I have one, but don’t really use it. It doesn’t render video as fast as my PC with 3.8ghz cpu. Point is I don’t like Apples attitude."

Zing you are so comical. You dont own a Mac and you know it. I hate when these PeeCee trolls tell people they own an iPhone or Mac but dont like it or use it. Zing, stick with your PC and Pre, iPhone isn't for everyone.

Zing: you're point about advertising for the iPhone is invalid. All of the iPhone commercials (check out the site for 2 years worth) point out how cool and good etc the phone is but I don't recall one that says competitors suck. The ads are succesful because they are practically tutorials on how to use the phone and how easy it is. Now the Mac vs Pc ads on the other hand do talk about superiority just like any other industry. (Pepsi vs Coke for example). The truth is people like their iPhones. They buy because they like them. When they get tired of them they'll buy something else.

All the hate on Apple yet you guys will defend Microsoft on their predatory behaviors?

Branded computers to be Vista compatible knowing they wouldn't be. They had internal documents showing the execs were willing to face the consequences.

Netscape?

Linux?

Pushing for open standards?

Fat32?

"…should have been able to bring multi-tasking to the table first."

Your antipathy for Apple colors your whole post. I pick just one example. Yes, Apple could easily have added multi-tasking long ago. But you toss it out like Apple was incapeable of achieving this. No, the answer is that it was a CHOICE to leave it out due to battery concerns. Sure, the Pre has its cards, but how is its battery life?

Now, I can understand if you, or anyone, does not like thta Apple tries to manage the consumer experience by reducing choice. However, Apple knows that the iPhone provides a computer like experience. Most users, when presented with multi-tasking would use it like they do on their home computer and the end result would be frustration with the battery life by many. Sure, users could not use it just like they can turn off WiFi, and dim the screen and disable 3G…but milions won't.

So, if you want to complain, complain that Apple is too concerned about the user experience, not that they are incapable of such things as integrating multi-tasking with their OS…

I've never had the opportunity to use a product such as the iPhone. However, I've never been one for phones that have all the capabilities of the internet. If you're going to use something to browse the internet, use a computer.

That being said, I've used both Macs and PCs.

Honestly, I'd never suggest a Mac to anyone. A PC can do everything a Mac can do, and more, for half the price. Not to mention, you can build your own PC computer and spend even less than you originally intended.

I don't hate Macs. I think they're over-hyped a bit. I think that they need to make things a little more compatible (i.e. games).

Also, you rarely see computer classes in schools that involve Macs. Because the whole business world involves PCs.

Mac ~ Just make things a little more affordable, and make it more user… buildable.

wow, comments are starting to look like it's only apple fan's. Nice work on the censorship. I'd bet this comment gets through but my other goes bye bye.

"Not hard to sell such a Great Product unlike so many on Wall Street who successfully market complete rubbish to everyone."

Exactly what apples weak point is. They spend 90% of their advertising efforts making fun of competitors in order to win customers. Now I now an ifan will defend this but they shouldn't because it's true. The whole snobby notion that apple users think everything else must be rubbish pretty much proves the point. And the attitude is perpetuated by apples deceptive advertising. The iphone is the ONLY product I like and it's their best product, but it's so over rated considering that it's now bulky, squarish and dated looking in comparison to say the palm pre or other phones on the horizon. Apple which touts themselves as superior should have been able to bring multi-tasking to the table first. They also lack HD like Samsung has. But I can't find much wrong with iphone other than it not being as current. Their desktops are ok, but their claims of what they can do are however a joke. osx is fine, but they act like it's something it's not. Anyone who thinks you need a mac in order to accomplish great things, video editing included, is an amateur. There is nothing I can't do with my PC that I need a mac for. I have one, but don't really use it. It doesn't render video as fast as my PC with 3.8ghz cpu. Point is I don't like Apples attitude.

Not hard to sell such a Great Product unlike so many on Wall Street who successfully market complete rubbish to everyone.

Apple has Great Products and deserves every bit of this even great success.

TimboM – You're right on point. Apple is brilliant at inventory management, and people overlook this simple fact trying to search for more obscure reasons.

Colin, I ordered a Macbook Pro recently, and it also came directly from HK. Seems that is the preferred channel for online purchases.

Regarding numbers, we'll know soon enough at the earnings call in 3-odd weeks. I think this will be good quarter for the iPhone because Apple gave 3GS 10 days of run before end of June, while also offering the 3G at $99 for most of June (immediately after WWDC). This is different from both the 2007 and 2008 rollouts.

Of course, next quarter will be the real measure of performance with the rollout to all 80+ countries in August.

I just ordered my iPhone 3GS online without worrying about retail store inventory.

Interestingly, I could see in the FedEx tracking information that it came straight from Hong Kong and even more interestingly, it only took a matter of a few days to arrive!

Except for the store in Town Sq inLas Vegas, which still have black 16gb and white 32gb, the other 2 stores at the forums shops and fashion show mall are completely out. I wouldn't be surprised if Apple already sold 5 million.

Apple is short on iPhones because they carefully manage inventory. Have a look at their balance sheet; they manage a $33 billion annual business with about $400 million (at retail value, not COGS) inventory.

Since Tim Cook has been COO, they have executed their inventory policies flawlessly, with no writeoffs of unsold inventory. A second benefit tends to be that they create the impression of scarcity, but not so much that it frustrates potential buyers. Apple is very adept at managing that tradeoff.

What is fantastic about this is we can also see how quickly Apple replenishes its own supply. If the shortages last only a couple of days, we get to see the efficiency of Apple's supply chain, and it contravenes the notion that manufacturing is substantially lagging demand.

What iPhone haters. They are all in the closet when it comes to Apple.

Some of the stores, like the Apple MOA (Mall of America) store are out because they are closed for remodeling.

Yep, the haters will be saying this is a manufactured shortage, like businesses prefer to lose money rather than sell products.

Some analysts like one named Tony-the-Warehouse will soon be out to talk about how the iPhones are all sitting in warehouses gathering dust and not being shipped, thus the shortage.

Yep, the 3GS must be so bad that no one wants one so Apple has to hide them all in warehouses just so there is a fake shortage.

I guess the iPhone-haters will be saying this is just a ploy by Apple to stir up more hype about the iPhone being very popular. The so-called fake supply shortage. I sure hope at least another 500,000 iPhone GSes have been sold since the big million unit weekend.