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This is not a success by the expectations and hype created. Analysts projected 10Million sales and worst case scenario of 6Million sales before launch: http://a

by kumarm 14y ago

This is not a success by the expectations and hype created. Analysts projected 10Million sales and worst case scenario of 6Million sales before launch: http://articles.cnn.com/2012-09-19/tech/tech_mobile_iphone-5-pre-orders_1_iphone-4s-release-apple-stores-16gb http://articles.cnn.com/2012-09-19/tech/tech_mobile_iphone-5...

uptown 14y ago
So maybe the analysts underperformed.
josephlord 14y ago
Sales were limited by supply at least in many places although some carriers at least had some stock in particular models. The only real way to judge the sales success is when supply matches demand
- loceng 14y ago
  Pretty sure Apple controls this to manage the numbers, and have an out if sales don't skyrocket as is/was believed to.
  - josephlord 14y ago
    Doesn't matter, you still can't tell the true demand until there is general availability whatever the cause is. I don't think that they artificially limit supply initially but they almost certainly do launch before they have enough to fully meet demand. If you thought there was demand for 10,000,000 phones would you really wait until you could stockpile $5Billion worth of inventory before you pressed the launch button? And it isn't worth having enough manufacturing capacity to fully support the initial rush when you know it will be underutilised for the rest of the year. I would target sufficient capacity to support expected demand to be satisfied through peak season (probably Christmas-Chinese New Year) based on production start date. It would be good to be able to expand between now and Christmas if demand is higher than anticipated. I would not produce enough for the initial launch for practical reasons but the free marketing would definitely be a bonus.
    - bornhuetter 14y ago
      > I don't think that they artificially limit supply initially I'm pretty sure they do. It would have been deeply embarrasing for Apple if they couldn't claim that "demand outstripped supply" - and it would hurt them on their next launch, because people would be less inclined to pre-order.
      - josephlord 14y ago
        What you take 'artificially limit supply to mean? 1) Launch before you can fulfil supply. 2) Resist taking too much from future supply by limiting use of air shipment. Also saves shipping costs. [I'm more used to TVs, phones may be mostly air shipped normally] 3) Have warehouses of stock backed up ready to release. (2) can be similar to having floating warehouses while items are sea shipped. I guess that Apple are doing (1) and possibly (2) but I would be surprised if they are doing (3) apart from some supplies so that if some locations don't sell out they can prioritise others rather than to have fully committed everything at the start. If they are doing (3) on a large scale there will probably be evidence of the excess inventory in their quarterly figures. If you think they are doing (3) in a big way can you suggest why that would work or what the benefit of the approach would be?
        bornhuetter 14y ago
        I think there is definitely an element of (3) in their strategy. From the link - "While we have sold out of our initial supply, stores continue to receive iPhone 5 shipments regularly and customers can continue to order online and receive an estimated delivery date" I think they estimated how many they can sell, gave shops 80% (or some other fraction) of that, and made sure they had millions more ready to provide to these shops over time. The ideal situation for a manufacturer is to "sell out" in the first few days, but not sell out for so long that people go to rival products. Apple are exceptionally good at supply chains and hype management, so I have no doubt that they made are controlling supply to make this launch look as successful as possible. The best way to manage this is having a bit of a stockpile.
flyinRyan 14y ago
What a bunch of nonsense. This beats the iPhone 4S, their previous top performer. Not a success! Some people will do anything to throw rocks.
jusben1369 14y ago
The very first paragraph of your linked article reads: "Pre-order response to the iPhone 5 has been massive, outstripping expectations of analysts, who were bullish on Apple's latest smartphone to begin with, and apparently of Apple itself." How do I reconcile that with your comment here?
- kumarm 14y ago
  The article is from 19th (Before iPhone was released) where analysts expecting sales to be 10Million during weekend and 6 Million worst case scenario.
  - jusben1369 14y ago
    Ok. I think what has happened is a) Analysts had lower numbers. b) Analysts blown away by initial numbers which leads to this opening paragraph, c) Analysts raise numbers substantially to 6 - 10 million range as a result and per your highlight d) You assume these last minute updated numbers are expectations that have been set for a while and thus only inline with expectations.
  - zerohm 14y ago
    Professional Analysts haven't been able to reliably predict iphone or ipad sales for the past 5 years. Even Gartner looks like they are just throwing darts, so why should we give credence to their predictions?
yread 14y ago
The market tends to agree with you AAPL is down ~1.2% as of 13:41 utc
- stephencanon 14y ago
  The markets are down in general (AMZN -1.21% MSFT -0.93% DELL -0.48% ...), so the downtick of AAPL is not very informative.
Someone 14y ago
http://www.apple.com/pr/library/2012/07/24Apple-Reports-Third-Quarter-Results.html http://www.apple.com/pr/library/2012/07/24Apple-Reports-Thir... gives 26M iPhones sold in the last _quarter_. Even assuming all of those were top of the line, 5M sold would be 2.5 weeks of 'regular' sales. I guess 'top of the line' is less than 50% of normal sales. If that is true, at least a month's worth of customers wanted this product so much that they went to a store in the first weekend. Also, to get to 10M, they would have to sell almost a quarter's worth of top of the line iPhones in one weekend. So, 5M looks like a good start to me. Of course, one cannot declare succes on basis of one weekend of sales. For all we know, 4.999M of those phones will be returned to the store and none will be sold afterwards.

by kumarm 14y ago

uptown 14y ago

So maybe the analysts underperformed.

josephlord 14y ago

Sales were limited by supply at least in many places although some carriers at least had some stock in particular models. The only real way to judge the sales success is when supply matches demand

loceng 14y ago
Pretty sure Apple controls this to manage the numbers, and have an out if sales don't skyrocket as is/was believed to.
- josephlord 14y ago
  Doesn't matter, you still can't tell the true demand until there is general availability whatever the cause is. I don't think that they artificially limit supply initially but they almost certainly do launch before they have enough to fully meet demand. If you thought there was demand for 10,000,000 phones would you really wait until you could stockpile $5Billion worth of inventory before you pressed the launch button? And it isn't worth having enough manufacturing capacity to fully support the initial rush when you know it will be underutilised for the rest of the year. I would target sufficient capacity to support expected demand to be satisfied through peak season (probably Christmas-Chinese New Year) based on production start date. It would be good to be able to expand between now and Christmas if demand is higher than anticipated. I would not produce enough for the initial launch for practical reasons but the free marketing would definitely be a bonus.
  - bornhuetter 14y ago
    > I don't think that they artificially limit supply initially I'm pretty sure they do. It would have been deeply embarrasing for Apple if they couldn't claim that "demand outstripped supply" - and it would hurt them on their next launch, because people would be less inclined to pre-order.
    - josephlord 14y ago
      What you take 'artificially limit supply to mean? 1) Launch before you can fulfil supply. 2) Resist taking too much from future supply by limiting use of air shipment. Also saves shipping costs. [I'm more used to TVs, phones may be mostly air shipped normally] 3) Have warehouses of stock backed up ready to release. (2) can be similar to having floating warehouses while items are sea shipped. I guess that Apple are doing (1) and possibly (2) but I would be surprised if they are doing (3) apart from some supplies so that if some locations don't sell out they can prioritise others rather than to have fully committed everything at the start. If they are doing (3) on a large scale there will probably be evidence of the excess inventory in their quarterly figures. If you think they are doing (3) in a big way can you suggest why that would work or what the benefit of the approach would be?
      - bornhuetter 14y ago
        I think there is definitely an element of (3) in their strategy. From the link - "While we have sold out of our initial supply, stores continue to receive iPhone 5 shipments regularly and customers can continue to order online and receive an estimated delivery date" I think they estimated how many they can sell, gave shops 80% (or some other fraction) of that, and made sure they had millions more ready to provide to these shops over time. The ideal situation for a manufacturer is to "sell out" in the first few days, but not sell out for so long that people go to rival products. Apple are exceptionally good at supply chains and hype management, so I have no doubt that they made are controlling supply to make this launch look as successful as possible. The best way to manage this is having a bit of a stockpile.

flyinRyan 14y ago

What a bunch of nonsense. This beats the iPhone 4S, their previous top performer. Not a success! Some people will do anything to throw rocks.

jusben1369 14y ago

The very first paragraph of your linked article reads: "Pre-order response to the iPhone 5 has been massive, outstripping expectations of analysts, who were bullish on Apple's latest smartphone to begin with, and apparently of Apple itself." How do I reconcile that with your comment here?

kumarm 14y ago
The article is from 19th (Before iPhone was released) where analysts expecting sales to be 10Million during weekend and 6 Million worst case scenario.
- jusben1369 14y ago
  Ok. I think what has happened is a) Analysts had lower numbers. b) Analysts blown away by initial numbers which leads to this opening paragraph, c) Analysts raise numbers substantially to 6 - 10 million range as a result and per your highlight d) You assume these last minute updated numbers are expectations that have been set for a while and thus only inline with expectations.
- zerohm 14y ago
  Professional Analysts haven't been able to reliably predict iphone or ipad sales for the past 5 years. Even Gartner looks like they are just throwing darts, so why should we give credence to their predictions?

yread 14y ago

The market tends to agree with you AAPL is down ~1.2% as of 13:41 utc

stephencanon 14y ago
The markets are down in general (AMZN -1.21% MSFT -0.93% DELL -0.48% ...), so the downtick of AAPL is not very informative.

Someone 14y ago

http://www.apple.com/pr/library/2012/07/24Apple-Reports-Third-Quarter-Results.html http://www.apple.com/pr/library/2012/07/24Apple-Reports-Thir... gives 26M iPhones sold in the last _quarter_. Even assuming all of those were top of the line, 5M sold would be 2.5 weeks of 'regular' sales. I guess 'top of the line' is less than 50% of normal sales. If that is true, at least a month's worth of customers wanted this product so much that they went to a store in the first weekend. Also, to get to 10M, they would have to sell almost a quarter's worth of top of the line iPhones in one weekend. So, 5M looks like a good start to me. Of course, one cannot declare succes on basis of one weekend of sales. For all we know, 4.999M of those phones will be returned to the store and none will be sold afterwards.