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Sat, Nov 21, 2009 - 02:26 PM EST  —  AAPL: 199.92 (-0.59, -0.29%)  |  NASDAQ: 2146.04 (-10.78, -0.5%)

Did Apple plan the current iPhone shortage?
Wednesday, May 14, 2008 - 02:57 PM EST

"iPhone is out of stock across Apple," Andy Space writes for 9 to 5 Mac.

Space writes, "It makes sense that with a new model iPhone on the way, Apple is clearing its supply chain to make way for the device. But its a deeper strategy. I suspect (personal opinion, speculation, alert) Apple management have deliberately decided to make the device more or less unavailable in the weeks preceeding the release of the new model."

This makes sense for two reasons:
1. Stimulate demand
2. Keep customers happy

Space writes, "I think the current lack of availability is deliberately designed to minimize complaints and maximize demand."

Full article here.

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May 14, 08 - 01:59 pm Comment from: D

How much is this idiot getting paid to right this BS?

Yet another asshat in the sea of clueless writers on Apple.

May 14, 08 - 02:02 pm Comment from: Aware

I was at my local Apple store last night and the three people in front of me asked all bought 4 Iphones a piece. Amazing.

May 14, 08 - 02:03 pm Comment from: ericdano

It would make a lot of sense. Otherwise, you'd get people who bought one a week before coming back wanted to exchange it for a new one. Simple, effective. Take the hit now by not selling any for a month rather than have the hassle of trying to unload "old" iPhones.

May 14, 08 - 02:06 pm Comment from: Mac-nugget

That's the same thing as asking, did Bush plan the gasoline prices to go up to record levels?

May 14, 08 - 02:12 pm Comment from: JAYGEE

I doubt any company plans to run out of products and not sell any. I could be wrong, as you never know with Apple lol.

May 14, 08 - 02:13 pm Comment from: Spock

Wow, Andy Space-Cadet is a real genius! That's almost on par with "eating nutritious food is a good thing". Ericdano hit the nail on the head. It's rather easy to see when you're as smart as Andy Space-Cadet.

May 14, 08 - 02:14 pm Comment from: Mac+

Did Apple plan current shortage, subprimes, war in Iraq, Vista's mess, Bill Gates' retirement, etc.?

May 14, 08 - 02:18 pm Comment from: jtc

@aware, and they are going to put them up on ebay as soon as they step foot into their house.

@ericdano, ever think about when they update their laptops? or desktops? thats kinda screwin people too...My friend bought the new iMac, then a week later the new one was out.What do they do with the older model computers? I'm sure they dont run out of stock on them.

With the iphone being as big of a deal as it is, it somewhat makes sense to stop making the old one. That gives them more time to produce more of the new one. Places were selling out when they came out so im sure they are going to stock up on more than the first time around. Then we can watch all other cell phone companies standing with a blank face, as they see the iphone market share rise even higher. I wouldn't doubt that within another year they will be bigger than RIM. Only took them a year to get to 28% now with even more capability from the sdk and 3G.... good luck to you phone makers out there.

May 14, 08 - 02:18 pm Comment from: Macintosh

Of course they planned it... Didn't this guy answer his own question?

May 14, 08 - 02:21 pm Comment from: macoverdose_dot_com

Captain Obvious has spoken

May 14, 08 - 02:22 pm Comment from: Blue Dream

Again, I think complaints are the least of Apple's worries. I think they can either produce both iPhones or they can put their focus and ramp up production of the new version 2 iPhone in order to have an international release. Can anyone image the volume of production for an international release while at the same time keeping everything secret. That to me is simply amazing. Keeping a lid on it is nearly impossible, and they have done it. To date, noone really knows ANYTHING!!!

May 14, 08 - 02:26 pm Comment from: Bill in Providence

Steve plans absolutely everything. And I think they're doing an excellent job with the way the sun rises in the East and sets in the West.

May 14, 08 - 02:27 pm Comment from: @Mac+

Plan Bill Gate's retirement? Maybe not, but they've had a hand in it! Bill saw the writing on the wall several years ago, and he decided to bail out early enough that Ballmer would have to take the heat for Microsoft's upcoming troubles.

Bill was the first rat to leave the ship.

May 14, 08 - 02:34 pm Comment from: Gassious Clay

@D

"How much is this idiot getting paid to RIGHT this BS?"

Calling someone else an idiot whilst demonstrating your own sub-intelligence at the same time - brilliant!

May 14, 08 - 02:35 pm Comment from: Macromancer

No, Disney did. Er wait... Dell did... Um, no wait, Coca Cola did....

May 14, 08 - 02:36 pm Comment from: R2

Hopefully they planned a universal landscape keyboard for iPhone 2.0 as well.

May 14, 08 - 02:39 pm Comment from: Steve516

Has anyone ever considered that they may well keep the current model on the market for a while with a lower price...

May 14, 08 - 02:45 pm Comment from: KingMel

I'm tired of people feeling like they are entitled to some type of refund or compensation if a product that they purchased is replaced by a newer/faster/better/cheaper version. That's life.

This guy is attempting to apply the old adage 'Absence makes the heart grow fonder' to his speculation regarding an intentional Apple marketing strategy for the next generation iPhone? Well, OK....I guess. I wish that I could get paid to idly speculate with little or no fear of being held accountable. Just fill up the space with words for today and try again tomorrow...

May 14, 08 - 02:46 pm Comment from: speedyg

I kinda figured it is easier to not cell iphones for 30 days than to have iphone returns because they fall in the "return for any reason" window. Why go through the hassle and trouble?

May 14, 08 - 02:52 pm Comment from: OneThingFor sure

We prolly can bet the current iphone will be discontinued making room for only a gen2 device. There had been speculation that this generation might stick around for a cheaper price point. Doesn't seem likely at this point.

May 14, 08 - 02:58 pm Comment from: Not Bill

While the lack of iPhones does seem to be having the described effect, you do not plan this way with millions in inventory. I expect they just wanted to be sure they would sell out of the old models prior to introduction of the new one and underestimated demand. It would be hard to know people would keep buying the old model with new ones announced. This does not follow the Osborne rule. (Osborne Computer announce a new model and went out of business with massive inventory to build the old one and no cash.)

May 14, 08 - 03:01 pm Comment from: Macintosh

There's no way they are keeping the first generation around at a cheaper price. That thing is gone...

May 14, 08 - 03:02 pm Comment from: Not Bill

@ Steve516

If they planned to keep selling the old model wouldn't still be building them and selling them now?

May 14, 08 - 03:08 pm Comment from: iWill

iPhone v. 1, now an iconic antique?

(It hasn't even been a year yet Madge.)

Hello, eBay? (^_^)

May 14, 08 - 03:13 pm Comment from: Bitjockey

This is being overthinked. You don't just pick up the phone and say I need a 10,000 more iPhones to bridge a 30 day supply gap (the unit cost would be astronomical and the vendors couldn't respond that quickly). Apple ordered 'X' amount to be manufactured some time ago and they sold them all. The guy that estimated the mfg. need actually did an amazing job hitting it within 4 weeks. That said I'm sure they had some options on higher (and lower) production quantities they chose not to act on.

May 14, 08 - 03:18 pm Comment from: Jez

I had a phonecall from Orange yesterday telling me my contract is due to run out and would I like a shiny new phone and contract with them. I told them I was planning to leave to go with O2 for the iPhone. I was told with all honesty that the iPhone had been discontinued by O2 due to lack of sales and a problem with the software. I laughed at the woman who clearly believed the memo that Orange had sent out to them. I told her the second revision of the iPhone was due out but she didn't believe me. Just goes to show that other networks are fearful of the iPhone effect and will go as far as to lie in such a barefaced manner.

May 14, 08 - 03:23 pm Comment from: Another Irish Dude

@ jtc

"Places were selling out when they came out so im sure they are going to stock up on more than the first time around."

Except Ireland, where O2's ridiculous iPhone plans have led to "O2 Ireland" shipping unsold iPhone stock over to the UK.
O2 in the UK have call plans for iphone that are approximately twice the value than in the Republic of Ireland.

Smart move O2 Ireland!
They really haven't sold many in a country where you can trip over an iPod in the street!
Again Well done O2 Ireland for the only iPhone launch failure in any iPhone territory.

May 14, 08 - 03:23 pm Comment from: LinuxGuyAndMacProdigalSon

I'm a contrairian and disagree with the notion that Apple planned this. The massive smuggling operations which bought up the old model to sell as jail broken iPhones overseas have simply made hash of Apple's plans for a transition. Apple can not simply turn on more production to meet demand. The manufacturing vendor chain does not work that way. It would take months to order and get the parts. So Apple is now stage managing the shortage using the Jobsian RDF to minimize any damage.

May 14, 08 - 03:25 pm Comment from: Lanzarote

Just Brilliant.

May 14, 08 - 03:38 pm Comment from: Dave - Colorado

One thing we've learned is that, because of Steve, Apple doesn't do what other companies do. Although I don't like seeing my stock drop that fast at the end of the day, it is Apple and analysts don't understand Apple. Neither do regular investors. I'm wondering whether it might be time to buy some more stock if it drops a little lower. this "shortage" is likely to bring the stock price down a bit, but who knows. I'm not acting unless it comes down a bit. it will be a good return after Steve announces the 3G iPhone before WWDC and then announces a laptop with a touchscreen with gesturing at the WWDC. That's my hope and expectation anyway.

May 14, 08 - 03:44 pm Comment from: Spark

Well, if Apple has fully discontinued production of the original iPhone, mine will go into into the safe when I finally upgrade. This icon will be in a technology Hall of Fame at some point in the future, and I want to be able to still have my copy.

May 14, 08 - 03:50 pm Comment from: @ Another Irish Dude

From "Tuaw"

Sean O'Shaughnessy said...

I live in Ireland and have been waiting over a year now for the iPhone to get here (remember it was announced at Macworld in Jan/Feb'07). I really want the iphone but am sickened by O2 Irelands greedy price plan. I have formally complained to them and have not even received a reply. The O2 price comparisons between Ireland and the UK are well documented by now. However, O2's lame excuse that they are competive with prices across Europe doesn't wash with me. I just spent the weekend in London and was able to use up my free minutes over their as I would have there. This was great but it also showed me that O2 can compare like with like when it suits them. Shame on O2. Shame on them.

May 14, 08 - 03:56 pm Comment from: Brilliant Guy

Apple probably contracted for N million iPhones to be manufactured under very sweet terms. It would make no sense to order another 100,000 at a higher cost just to make sure they have supply in the last month before a new product arrives. Got to keep that GPM above 50%.

May 14, 08 - 04:19 pm Comment from: John

Ramp up time.

Distribution deals closing all over the world.

Demand increasing. Supply almost gone.

Why? Duh! Take something away when it's selling and people want it more.

GP margin will be VERY heavy on 3G.

It's the money.....stupid.

May 14, 08 - 04:42 pm Comment from: Gavron

And D can't write 'write' right.

Who is clueless D baby!

May 14, 08 - 04:42 pm Comment from: Super Furry Animal

"How much is this idiot getting paid to right this BS?"

He scored Ray's 2¢.

May 14, 08 - 10:25 pm Comment from: justme2

Actually I'm planning to get the v2.0 iPhone for myself, and convert the v1.0 into a phone for my spouse. Should get a different case though -- doubt if he'll want a pink one on his belt... wink

May 15, 08 - 01:00 am Comment from: ken1w

Since Steve Jobs's return to Apple, almost everything Apple does is planned, even if it looks like a mistake or concession... from the $200 iPhone price cut (early adopter revenue surplus) to the $100 "give back" (Apple Store spending incentive). And then there's the initial iPhone "no third party native apps" stance to the "concession" to release the iPhone SDK (which was obviously a plan to minimize third party development until all the iPhone pieces were in place).

May 15, 08 - 01:39 am Comment from: macacrap

ken1w: exactly.
but you know what's really planned! the plan to make it look like a plan... ad infinitum. (or, you could take it for what it's worth.)

here's to yin-yang, action-reaction, predictability. is it really that bad? take a chill pill boys and let the good times roll.

pirates, ye be warned! (just playin')

May 15, 08 - 08:41 am Comment from: Register or Login

A planned shortage? Not unless Apple was limited in parts availability for iPhone v2. Major manufacturers have set production deadlines for end of term models. It has nothing to do with marketing and or promotions. It is based upon new model introductions. Apple has built up a sound audience of old technology purchasers. They have no problem getting rid of old stock and still maintaining a margin.

I hate these stupid flying pop ups MDN.

May 15, 08 - 09:09 am Comment from: HolyMackerel

I reckon Apple redid their numbers on the high price of the iPhone and carrier plan with the tiny numbers they're selling, then compared this will the 70% return on every application they'll sell after June and the fact that surveys probably show people will buy about 5 apps on average.

Add to this the fact that every application will be on their servers as source code that they can recompile on demand to run on the iTablet or AppleTV making even more sales!

Get rid of the exclusive carriers, reduce the price to bugg**y, and collect for the life of the phone.

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