Apple's iPad strategy: Cutting off competitors, or just learning their lesson?

@ToeCutter

"I'm not quite sure how anyone could call the iPad launch successful? It was a train wreck."

Train-wreck? Really?

You may be hallucinating. It is impossible to predict exact demand, particularly when that product has never been available before. It was one of the most successful electronic product launches in history.

If you can do it better set up your own company and do it. Let us know how that works out.

@ ToeCutter - "Apple was caught completely off-guard by the demand, but they dodged a bullet because there simply was no competition in that space."

Possibly true. But this isn't a sprint. It's a marathon, and Apple has a huge early lead. So thousands of potential iPad buyers were turned away in the first weeks of iPad availability? Well guess what. Those people won't forget iPad. Apple's mindshare is greater than that of HTC + Lenovo + LG + Motorola.

Consumers won't settle for just any old random Android craplet. They won't wait for the vaporware PlayBook. They won't even look at an HP Stale. Oops. I meant "HP Slate."

"Apples supply hiccup turned into an opportunity for HTC, because I needed a phone, and VZW was a good choice due to AT&Ts horrible coverage. "

Oh god. Will somebody please tell him? Anyone? OK, then I will.

Toe, iPhone is coming to Verizon. February 10th. Be there.

Oh, and there's one more thing. Your post is a near-perfect "concern troll." A concern troll goes something like this: "I am a huge fan of Apple, and have been since the year X. But Apple has started to do something that I think may cause huge problems for the company in the future, and I feel compelled to bring light to the subject because I love Apple so."

People who post "concern trolls" are usually paid shills for competitors. Politicians hire shills to post concern trolls about competing candidates, sometimes to great success. Good luck with that.

I'm not quite sure how anyone could call the iPad launch successful? It was a train wreck. Apple was caught completely off-guard by the demand, but they dodged a bullet because there simply was no competition in that space.

That won't be the case this time around. You can bet that Samsung, Moto, Palm and a hundred or so others will be waiting in the wings with shiny new Android tablets for those unfortunates who won't get their precious iPad 2 before the initial shipment sells out, which will probably be around 5 hours after launch.

Apple and AT&T jacked up the iPhone 4 launch even worse than iPad. I had pre-ordered mine, but it never went through because AT&Ts fulfillment cloud crashed and burned 3 hours in.

Having already passed my iPhone 3GS to the wife, I found myself without a cell phone for the first time in years. Instead of taking mine back from the missus, I ended up doing the unthinkable: I snagged an HTC Incredible on VZW.

Apples supply hiccup turned into an opportunity for HTC, because I needed a phone, and VZW was a good choice due to AT&Ts horrible coverage. I still have the HTC and VZW account, because having a working phone regardless of AT&Ts coverage map is kinda nice. I also discovered that Android is a competent competitor to iOS.

My point is that while I was almost exclusively an Apple user since 2007. It was Apples failure that opened the door for the Incredible, not Androids success. iPhone 5/iPad 2 is Apples game to lose. If they have another thin launch, I see the others selling a boatload of Android phones and tablets.

Not sure if I'm reading more into the article than is there, but it seems like they might be trying to tie this into the $3.9 billion in "strategic agreements" that Tim Cook mentioned in the earnings call. But I don't think they're related.

Okay not to be a business or statistics dork, but I have to nitpick this statement:

"As with the iPod and iPhone, the company has learned to anticipate demand."

Apple already knows everything it needs to know about anticipating and forecasting demand... it doesn't.

Most people think the best businesses sit down, look at a bunch of data and predict how much they are going to sell and then make that number. That type of forecasting is so 1990's.

A few decades ago, Toyota came up with this process called Lean. One aspect of Lean is that, instead of trying to figure out how much to buy, when someone buys one of your products, simply turn around and buy or make a new one to replace it. If you need more, ramp up your process and buy/make more quickly. If you need less, slow your process down. Adjust until you reach or get as close to possible a 1 for 1 replacement rate. Thus you reduce waste.

This type of process intentionally can create shortages because if demand is very high, the supply chain will have to work harder to catch up until it reached equilibrium, but that's far better than building a million and only selling 500,000 and then working hard to sell the rest at a discount. If you are running a lean process, you are making money, even if you aren't keeping up with demand right away.

In short, looking at it from Apple's angle, the launch of the iPad, in terms of volume of sales shortages, was 100% a success and 100% designed. It wasn't an attempt to starve the chain and create some mysterious air of popularity, but merely an attempt to make sure everything they made was sold and not sitting around for too long. They then tweaked production to meet demand until they were replacing everything they sold at the right speed.

You might say "they didn't meet the demands of their customers!" I challenge that. They met the demand of 1 million customers in 3 months. That's amazing. Apple made 78% more revenue last year than the year before. I call that a successful launch. And how exactly do you predict demand for a product that is the first of it's kind ever? You can't!

It's 2011, this is the way the best businesses do business now, and Apple is one of them. If you doubt it, stop someone at Apple sometime and ask them about Lean Processes and 6Sigma. Apple prays at the altar of Lean and 6Sigma and every launch from here on out will see shortages of one kind or another because that's what they are setup to do, to reduce waste.