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Confirmed: There Will Be IPhone Shortages, Not Due To Supply And Demand

Posted June 1, 2007 4:00 AM by Tanner Godarzi
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image It’s been tossed around before about Apple’s iPhone being in short supply. It has yet to be confirmed and if so why. I just got off the phone with a rather nice AT&T call rep who I had called regarding the iPhone’s price for an already existing plan. I asked about the rumored short supplies and he said there would be short supplies, just not the reason you’re thinking of.

A lot of hype has been generated before the iPhone’s release and we’ve all thought there would be short supplies, there wouldn’t be short supplies then there would be. Well the reason is rather shocking, it’s not due to massive demand, it’s not due to the FCC delaying anything and not because components could not be ordered quick enough. No, it’s rather your local AT&T (the new Cingular or whatever abomination it decided to become) store limiting it themselves. Now let me explain, you must be outraged over such an outlandish claim and how I must be so bold. But the reality is this a high end phone we’re dealing with and the rep explained that local stores really like to limit their supply of high end phones such as the Black Berry and Treo because of all the costs involved. People walk in just wanting a phone to make calls, it’s generally the business people who buy the high end phones.

So blame not Apple for short supply, they’ll be well stocked but blame your local store if you can’t get your hands on one right away. It’s price point is what’s turning off stores from ordering so much.

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Comments

  1. I plan to get mine from the Apple store, not an AT&T outlet. I expect better supplies, better service and possibly better deals at the Apple stores.

    Posted by Adam J. Bezark on June 1, 2007 9:00 AM

  2. I plan on getting mine from and Apple store as well, but at “All things Digital”, Jobs was quoted telling some journalist that the Apple store will be a mad house and he encouraged her to go to an AT&T store to make sure she gets her hands on and iPhone on launch day. I’m still going to an Apple Store. They like me there and if anything, they will even hold 2 for me.

    Posted by Robbie L. on June 1, 2007 9:18 AM

  3. It’s a great plan. more people will buy it at the apple store, which will help the aapl stock out more than the t stock i don’t own. wink.

    Posted by stock_owner on June 1, 2007 9:21 AM

  4. I doubt there will be a line at the apple store around where I live. What I don’t understand is the fact that Steve Jobs would encourage people NOT to go an Apple Store but instead to an AT&T store. It would look good for Apple to have lines of people waiting around their stores to buy their iPhone.

    Posted by Robbie L. on June 1, 2007 9:29 AM

  5. “local stores really like to limit their supply of high end phones such as the Black Berry and Treo because of all the costs involved. People walk in just wanting a phone to make calls, it’s generally the business people who buy the high end phones.”

    So… they don’t want to sell an expensive product with a higher profit margin even when there is demand for it? What sort of sense would that make? And what exactly are the “costs involved” with selling a higher number of pricier phones?

    Posted by Neven on June 1, 2007 10:42 AM

  6. Neven, what the Rep told me was that the phone’s price and data plans were very pricey and only appealed to a small range of people. Most don’t want to go through all the red tape just to get a high end phone. Many walk in just for a basic phone and that is what the store is focusing on, basic phones.

    Posted by Tanner Godarzi on June 1, 2007 11:32 AM

  7. Well I think SJ said that because it would unseemly to partner with someone to sell something and tell people to go to “your own” stores ... plus, most people could tell you where an Apple store is even if they are not Mac owners - not ask people where a Cingular/AT&T store actually is? They might say it’s a mall but which one of the kiosks is actually AT&T?

    Of course, the store managers are not geniuses - if they are - they wouldn’t be managing a kiosk ... it’s also in Apple’s favor if they don’t over order. Apple would rather Apple.com and AT&T wireless have most on hand to sell - It’s better if than maybe 10 out of 20 is left sitting on a shelf in a town of 500 people somewhere.

    Of course, they’re going to base it on all their previous experience - is a $500 Nokia really much better than a $300 or a $100 Nokia? Why would you pay 5 times as much for maybe 2 extra features? NOt the same with an iphone.

    But it’ll add to buzz as people run from kiosk to kiosk and they sell out until theygo to the Apple store ...

    Posted by jbelkin on June 1, 2007 11:59 AM

  8. Have you tried to buy a Treo or high end phone at one of these stores? I spent two hours monopolizing the nice lady at my Cingular store because the phone was so much work to set up. I’m hoping the iPhone will be easier than that. Probably about 3/4ths of the time was spent setting up the stupid (and that’s being nice!) WinMobile. What a POC! Still, the iPhone has a lot of features and there will probably be a lot of questions from most people. THAT’s probably what they mean by associated costs.

    Posted by pontific8 on June 1, 2007 12:25 PM

  9. Excuse, please!
    Just what do you think “supply and demand” IS?

    Posted by Steve P on June 1, 2007 2:03 PM

  10. This is just nonsense. Do some math. Divide the total number of phones said to be available in year 07 by the number of Cingular/AT&T stores and the number you come up with is really quite small. then reduce by the number being held back for the Applestores - probably 50% and you have a classic supply and demand situation IF the reports of long waiting lists are to be believed.

    Posted by flint on June 2, 2007 5:18 AM

  11. Anyone expecting Wii or even PS3 type demand for the iPhone needs to come back to planet Earth immediately.  Reality is calling you back.

    Posted by JKFAN on June 4, 2007 12:34 AM

  12. Whether Steve Jobs REALLY said this to Arianna Huffington, or was misquoted (as Apple contends), is unknown. What is known however, is that whether he did or did not make this recommendation, it wasn’t made “to people”. Arianna herself punctuated her “outing” comments with “they do now”, referring to what people know or don’t know to Steve Jobs. Unfortunately a few news outlets have lept on this and reported this as some sort of duel between Apple and AT&T sending customers back and forth, when nothing could be further from the truth.

    Supply will fluctuate between Apple and AT&T locations. Regardless, you call before you go, or at least plan to camp. Nuff said.

    Posted by Cleverboy on June 4, 2007 3:58 AM

  13. Yes, there’s also been a lot made of the “4 million” phones that will be available in 2007, according to some analyst. But remember, that’s an outside observer’s guess, not Apple’s or AT&T’s projection.

    OTOH, Apple has always been conservative with its hardware projections when a new product is introduced. They prefer high demand and spot shortages to low demand and unsold inventory sitting on shelves. Neither situation is ideal, but the first is the lesser of the two evils.

    So while I’m sure they’re making as many phones as they can, I think it’s also safe to guess that there will be a fairly tight supply at first. If you want one of the first iPhones, watch for the announcements and be prepared to camp out. But unlike the Wii (which is STILL hard to get—what’s up with that?), I expect the volume will ramp up within a few weeks to meet the demand.

    Posted by Adam J. Bezark on June 4, 2007 8:48 AM

  14. I think one of the reasons behind the rebranding, was to help flush the kiosks, authorized or not, into limbo temporarily, so that more people will go to an official AT&T Company store, where the product channels are much better controlled… If they say they have phone x, y, and z, they can have phone x,  y and z, where it is much more difficult for the independent resellers/agents, to say the same about their inventory.  The indie kiosk resellers simply do not get the signage or their contracts renewed… yet, and customers are sent to the stores.

    Plus, Ma Bell may want to rethink those agreements anyway, as a new corporate entity.

    The company stores are usually the ones where you can pay your bill, see most of the phones they have on their web site, and also, get cornered by marketing weasels.

    Posted by bud on June 4, 2007 11:46 PM

  15. AT&T is not intentionally limiting supply of the device. I’m a store with AT&T. The iPhone came up in a meeting this week. AT&T is not handling any part of the distribution of this device. The iPhone, and any iPhone accessories, will be shipped directly to AT&T stores from Apple. We have nothing to do with any sort of throttling to create artificial demand. Apple has told us the number of devices they’ll provide to AT&T stores. That number was broken down by region, then by area, then by district. Do I know how many my store is getting? No. However, we were told that we would receive more units of this than of a typical “hot item” launch.

    Posted by anonymous on June 5, 2007 7:24 AM

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