Filed under: Analysis / Opinion, iPod Family, Apple Financial
iPod 5G supply may not meet demand
After yesterday's news about one million iTMS video downloads, an article in Business Week today notes that Apple may not be able to supply the iPod 5G's fast enough. The news is based on reports of hardware shortages of both LED backlights and and the Toshiba-Matsushita supplied LCD displays. An analyst quoted in the article notes that between 100,000 and 200,000 iPod 5G's may have been sold in the twenty days since the unit was released. As a comparison, Apple sold one million iPod Nano's in the first 17 days after it was announced. The price point differences between the models may account for this discrepancy. One might wonder if Business Week's "news" about a perceived shortage of iPod 5G's is simply fodder to help sell units more quickly for the holidays.
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Reader Comments (Page 1 of 1)
Derrick said 9:37AM on 11-01-2005
The analyst was trying to speculate on the number of 5G iPods sold based on the number of video downloads ... ultimately no one knows exactly how many have sold except Apple. Also, I am sure the primary reason we know how many nanos were sold is because Apple's 4th quarter results were announced shortly after ... if the nano was introduced ealier in the fiscal quarter ... I am not sure Apple would have released the sales figures so quickly.
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Hee Haw said 9:53AM on 11-01-2005
Run out please-- I'm kinda waiting for the 40gig at $299. That'd be perfect.
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David Chartier said 9:59AM on 11-01-2005
I'm very much of the belief that Apple uses this "shortage" bit as a marketing strategy. They've done it with nearly every significant new product they've released over the last year or two: the Mac mini, the first gen iMac G5 and just about every iPod revision. A shortage gives off the impression of "oh man everyone's buying one, so should I!!"
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Jacob Varghese said 12:38PM on 11-01-2005
David,
I think you're totally right. It might be simple marketing strategy, but it works and that's all that matters at the end of the day.
And it's kinda stupid to guesstimate the number of ipods sold by looking at the number of downloads. I dled 32 videos and I don't even own an ipod.
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Wheels said 12:34PM on 11-01-2005
I don't buy the "shortage as a marketing strategy" theory. Companies, especially Apple, a company who is traditionally seen as weaker and one that people are willing to beat up at a moments notice, do not want to tick off their customers by creating artificial outages. What Apple probably is guilty of is not accurately projecting sales. I think they're conservative about predicting initial sales because they don't want to be producing gobs of inventory weeks or months ahead of a product introduction, and increase a chance of a leak. Also, by trying to keep supply and demand somewhat on an even keel, Apple can keep their inventories low so they don't pay taxes on any overstock they have. While this is a purposeful business move, it is a consumer marketing strategy.
I remember waiting three and a half months for my iPod mini; a company would never purposely make a customer wait that long for the purposes of a marketing strategy. Apple relies on third party vendors, shortages are going to occur.
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Satish Bhardwaj said 6:39PM on 11-01-2005
Apple has found a way to make money after having failed to sell its computers to the extent necessary to make Apple a force in the Computer industry. But the device needs the support of the people to make videos for the stocking of the device. Soon people will realize that they are being had and they will stop creating the videos for stocking the device.
There are already reports that viruses are being created to hurt the performance of this device. Once the viruses take over that will spell the doom.
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indolene said 8:52PM on 11-01-2005
Of course they're not meeting demand. I ordered my 5G at 4pm on October 18th, and it was "processing" my order for more than a few days, then "preparing to ship" for another few. I don't remember how many days the order status said "processing order" and "preparing to ship". Anyway...
I paid for the 2 day shipping (which, once the thing was 'ready' to be shipped, did come to Chicago from China in 2 days), but the iPod ultimately came to my house on the 26th, 8 days after I placed my order (meaning it took 6 days for a computer to verify and charge my credit card and print up an address label for the box at the factory). I called Apple during my "processing order" phase-as I was concerned that maybe the order didn't go through-and the guy on the phone told me exactly what the website said. I asked him flat out if they just didn't have enough on hand and that's why it was taking so long to process my order. He said no, it says it's processing, and it would be there before the 27th (again, exactly what the website said) My main beef is that neither the website nor the guy on the phone explained exactly why.
My theory is that the Apple online store-when there's not enough units to go around-uses the lines "processing order" and "preparing to ship" instead of saying "we don't have one to send you at this time".
Now, I'm not really all that peeved about the extra 6 days, but seriously, there's no need to make stuff up or not explain why your online store is 6 days slower than every other online store on the internet. Apple: you'll find that just being honest with folks makes them happy even when you don't have enough iPods to deliver them in the timeframe that your website says you will.
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indolene said 9:21PM on 11-01-2005
Shoot. Reading what one writes is good for the soul.
What I mean when I said "I don't remember how many days the order status said 'processing order' and 'preparing to ship'" is that I don't remember how many of the 6 days the order status said 'processing' vs. 'preparing', but I do know that it ultimately took 6 days for the thing to be put on a plane.
Sorry 'bout that.
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ChipNSoCal said 9:12PM on 11-01-2005
Viruses for the Video iPod? Come on now...Please.... give me a break...and lack of available content? There will be plenty..and if not.. you can make your own. Read the posts. There are a number of tools already available.
You should also check out Mark Cuban's blogmaverick posting about how "Bob Iger saved the TV Industry" - if you don't believe me. Very insightful.
I ordered mine the day they came out, because I knew there would be a shortage - and the stores would be understocked. The stores are not notified of their shipments, but if you live near an Apple store, you just have to visit more frequently. The store near me had them in stock when I've visited, but was sold out shortly thereafter when a friend went to purchase his.
As for the "shortage marketing strategy", that is hard to say.. These things are selling...as have the other iPods... and after people saw my video iPod, they wanted one. Go figure.
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