Apple Sells One Million iPhone 3Gs in First Weekend

[bobolito]

Apple Sells One Million iPhone 3Gs in First Weekend

CUPERTINO, California—July 14, 2008—Apple® today announced it sold its one millionth iPhone™ 3G on Sunday, just three days after its launch on Friday, July 11. iPhone 3G is now available in 21 countries—Australia, Austria, Belgium, Canada, Denmark, Finland, Germany, Hong Kong, Ireland, Italy, Japan, Mexico, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, UK and the US—and will go on sale in France on July 17.

“iPhone 3G had a stunning opening weekend,” said Steve Jobs, Apple’s CEO. “It took 74 days to sell the first one million original iPhones, so the new iPhone 3G is clearly off to a great start around the world.”

The new iPhone 3G combines all the revolutionary features of iPhone plus 3G networking that is twice as fast*, built-in GPS for expanded location-based mobile services, and iPhone 2.0 software which includes support for Microsoft Exchange ActiveSync and runs over 800 third party applications available through the new App Store. In the US, the new iPhone 3G is priced at just $199 for the 8GB model, and $299 for the 16GB model**.

*Based on 3G and EDGE testing. Actual speeds vary by site conditions.
**Requires new two-year AT&T rate plan for qualified customers, sold separately.

Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market with its revolutionary iPhone.

Apple Sells One Million iPhone 3Gs in First Weekend

[spleck]

From The Unofficial Apple Weblog (TUAW)

But hold on: because of clever accounting, a sizable fraction of those handsets were already considered "sold" as soon as they left the loading dock in Asia, according to Fortune's Apple 2.0 blog. "In other words, some of those 1 million iPhones recorded as sold by Apple may still be in transit," they wrote.

[Mobile Mike]

It's easy to sell 1 million phones when it's available around the world instead of just one country...

Nonetheless, this isn't a surprise considering it is the iPhone version many people were waiting for.

[spleck]

Many analysts had still predicted longer. One (I think from the link I posted) predicted 17 days.

Piper Jaffray updated their info and they have a breakdown by country. See the bottom of this link: AppleInsider

Italy, Germany, and Mexico are the big ones behind the US and UK.

[walkguru]

thats still a lot of phones in such a short peorid of time.

[AnthroMatt]

The Apple PR machine is alive and well.

Still, a very respectable opening, even if it is a bit misleading to compare it to the old iPhone initial launch numbers.

[hf1khal]

Outch I new I should ahve waited. But, I realy wonder how much more it would have been if the sellers like AT&T had enough supplies on hand. in my area, not a single AT&T store has an iphone in its stock and the same goes for APle in the DC metro area. In my opnion, the numbers could have been much better have they properly estimated the deman. From what I heard today, some stores first day supply was around 100 and few had the same number on the next day while the rest were no more than 30. Also from reading other forums, it seems that even via direct fullfilment the iphone is on backorder.

[spleck]

Your area seems to be sold out, but there are still a few stores with them in stock.

Apple Retail Store - iPhone availability at the Apple Store

[hf1khal]

Originally Posted by spleck

Your area seems to be sold out, but there are still a few stores with them in stock.

Apple Retail Store - iPhone availability at the Apple Store

Yes I have seen this earlier today (like around 3 PM) and many of the ones that now shows as yes were out of stock but the list of so many being out of stock is still very high and it seems that they restocked mostly in major markets. Actualy it was a known fact that NYC was all out of the iphone today and now shows stock unlike this afternoon.. Actualy Apple also had a note to check after 9 PM for the Tuesday availability. What we see now is after todays re-stock. AT&T stores that is a diferent story. Many said they were sold out on Friday and they actualy had the stock for the next day but each store were only allowed to sell the days alotment and could not sell the stock for the next day untill that day.

[bobolito]

Originally Posted by hf1khal

Outch I new I should ahve waited. But, I realy wonder how much more it would have been if the sellers like AT&T had enough supplies on hand. in my area, not a single AT&T store has an iphone in its stock and the same goes for APle in the DC metro area. In my opnion, the numbers could have been much better have they properly estimated the deman. From what I heard today, some stores first day supply was around 100 and few had the same number on the next day while the rest were no more than 30. Also from reading other forums, it seems that even via direct fullfilment the iphone is on backorder.

Oh I think they knew very well what the demand was going to be. The problem is you can't satisfy demand without creating worse problems on the side. Think of how much worse it would've been if they had sold all the iPhones people wanted on day 1, how those activation servers would've been down even longer and people would've grown much angrier. They also need to consider the man power needed to supply all stores, the space needed, and the employees at the stores need a break too! Making all that happen costs more money. Plus carriers need time to fine tune the 3G network in case it gets overloaded like it did today in all of NYC/NJ.

So all this out of stock BS, it 100% on purpose. It also causes more uncertainty among those who didn't buy it, to make them buy it as soon as possible rather than wait. So no matter how you look at it pulling the plug on supply is simply a well thought out tactic designed to maintain level of service without investing massively in resources to supply everyone at once, as well as to benefit Apple with stronger demand in the long run.

[hf1khal]

Originally Posted by bobolito

Oh I think they knew very well what the demand was going to be. The problem is you can't satisfy demand without creating worse problems on the side. Think of how much worse it would've been if they had sold all the iPhones people wanted on day 1, how those activation servers would've been down even longer and people would've grown much angrier. They also need to consider the man power needed to supply all stores, the space needed, and the employees at the stores need a break too! Making all that happen costs more money. Plus carriers need time to fine tune the 3G network in case it gets overloaded like it did today in all of NYC/NJ.

So all this out of stock BS, it 100% on purpose. It also causes more uncertainty among those who didn't buy it, to make them buy it as soon as possible rather than wait. So no matter how you look at it pulling the plug on supply is simply a well thought out tactic designed to maintain level of service without investing massively in resources to supply everyone at once, as well as to benefit Apple with stronger demand in the long run.

Agreed. in every way. LOL, they realy got more mies with the news and for sure generated more interest with the public.

[spleck]

I think its logistics too. It costs a lot of money to ship that many iPhones quickly (I believe they've been coming overnight/2day). They'll pay to keep flagship stores stocked, but smaller areas have to wait for more economical shipping (ie Ground).

Stores in my area did NOT get shipments for Saturday and Sunday. The mall kiosk managed two on Sunday (but they did arrive on Saturday).

Since they're going to sell every one of them for a while, they're not too concerned with filling demand the first week. You're right, the longer there is hype, the more they will sell in the long run.

As far as the Apple Store stock status page--remember it is only accurate after closing, before they open for the next day. So yes, it reflects restocks that may have arrived that day.

[hf1khal]

Here is an interesting article:


From: CIO.com - Business Technology Leadership

How Did Apple's Supply Chain Fare During the iPhone 3G Rollout?
– Thomas Wailgum , CIO

July 14, 2008

Everyone and their brother has got an opinion about the new Apple 3G iPhone (faster? yes! battery life? booo!), but how did Apple's behind-the-scenes supply chain systems and processes fare during the much hyped rollout last week?

MORE ON CIO.com
Study: Apple, Nokia, Dell Tops Among Global Supply Chains
Fraud and Theft Risks in Global Supply Chains Are Everywhere
How ConAgra's Pot Pie Recall Bakes In Hard Lessons for Supply Chain Management
According to news accounts of frantic Friday, there were enough of the ultracool devices in the Apple stores, which means Apple's physical supply chain processes (manufacturing, inventory and logistics) worked well. In fact, Apple reported on Monday, July 14, that it had sold 1 million iPhones by Sunday. (By comparison, it took 74 days to sell 1 million of the original iPhones).

(Update on July 15: Media outlets are reporting that as of Tuesday morning, all three iPhone 3G models had sold out in 21 states. This news comes from a retired public relations man named Jim Neal who discovered, using iPhone's availability widget, that 117 of the 188 Apple stores in the U.S. had sold out of all three of the new iPhone models.)

But it appears that the digital supply chain side of Apple's house was unable to withstand the barrage of activation demands (through the iTunes site) that stormed in from 21 countries. Many frustrated customers had to wait varying lengths of time on Friday to get their new iPhones up and running. "The iTunes software appeared to have been so overwhelmed by demand today that customers were not able to go through that final stage and sync their iPhones," said AT&T spokesman Mark Siegel. (So far, Apple has not commented on the problems and did not return a message from CIO to talk about its supply chain.)

"To me, the physical supply chain is working just fine," says Kevin O'Marah, the chief strategy officer at AMR Research. "But the pioneering position they have taken in the digital supply chain is showing how tough it is to compete in this new realm."

In AMR Research's 2008 "Supply Chain Top 25" list, Apple took home the top spot, besting Nokia, Dell, Procter & Gamble, IBM, Wal-Mart and others, due to "an intoxicating mix of brilliant industrial design, transcendent software interfaces and consumable goods that are purely digital," noted the report's authors, who included O'Marah. "The mechanical and financial benefits of this approach include extremely high inventory turns, minimal material or capacity limitations to growth, and excellent margins." (For more on what those top 25 companies do, see "Apple, Nokia, Dell Tops Among Global Supply Chains.")

O'Marah says he was surprised that it was the digital side of Apple's operations that encountered difficulties. Apple's physical supply chain operations have a "checkered past," says O'Marah, though that has recently changed.

But it appears to O'Marah that Apple's digital supply-chain strategy, which he applauds for its infinite scalability and zero-marginal cost, may have "bottlenecked" on Friday. "Who would have even thought that was possible?" he asks.

The Future Supply Chain
In the AMR "Supply Chain Top 25" report, the analysts noted that while Apple could have stumbled in meeting the demand for the original iPhone in 2007, it did not. "Behind-the-scenes moves like tying up essential components well in advance and upgrading basic information systems have enabled Apple to handle the demands of its rabid fan base without having to fall back on their forgiveness for mistakes," notes the AMR report. (See "Fraud and Theft Risks in Global Supply Chains Are Everywhere" and "How ConAgra's Pot Pie Recall Bakes In Hard Lessons for Supply Chain Management" for more on today's top supply chain issues.)

Even with the technical problems and mild customer frustrations on Friday, O'Marah doesn't think there's cause for alarm at Apple. "No one's chucking their iPhone," he says.

"You can look at that and say, 'Shame on them for not thinking this through,'" O'Marah says. "But a fairer observation is: Good job to Apple for mastering the physical supply chain so well that you have this high-profile launch and your problems are not on the physical side—you have product in stock. So, you've done it. And yet what you're doing is so successful in putting this product out there, that the pressure ends up falling back on the content side of the business. Which is kind of amazing."

There aren't too many companies that experience the physical and digital convergence intensity like Apple is. O'Marah notes that Disney (which is also on the AMR top 25 supply chain list) may be the closest comparison. Disney must coordinate its digital and physical supply chain operations for its movies through its distribution arm (shipping DVDs to stores), its TV properties, theme parks and Disney websites.

"Though," O'Marah says, "there's not quite as much of a surge in demand on its digital supply chain" as what happened with Apple's. (Going green with your supply chain? See "Can You Build a Carbon-Efficient Supply Chain?" Read about how four CIO 100 honorees plan for unexpected events in their supply chains in "The Supple Supply Chain.")

The importance of blending digital and physical supply chains is a trend that will only continue, however. "It's an interesting story because it's the digital and physical converging and lo and behold it's the digital that had trouble," O'Marah says. "There are lessons to be learned for everyone."

© 2008 CXO Media Inc.



Link: How Did Apple's Supply Chain Fare During the iPhone 3G Rollout? - CIO.com - Business Technology Leadership

[thom]

Did I read that correctly...Iphone 3G 8G version for only $199?

[hf1khal]

Originally Posted by thom

Did I read that correctly...Iphone 3G 8G version for only $199?

yes. it is for new customers as well as existing 2G customers and are required to enter into a 2 year contract. Cutomers who do not qualify must pay $200 additional and extend their contract for 2 years. The is no pricing without a contract but rumer has it that it will be around $599 for the 8GB version.

[thom]

Originally Posted by hf1khal

yes. it is for new customers as well as existing 2G customers and are required to enter into a 2 year contract. Cutomers who do not qualify must pay $200 additional and extend their contract for 2 years. The is no pricing without a contract but rumer has it that it will be around $599 for the 8GB version.

I see...$599 isn't bad I guess. I can see on ebay they're selling it at around that price.