There’s nothing like scarcity to make you want something more. Apple understands this, which is why it tightly controls how many iPhones are available at any given time. Some anecdotal evidence is coming in that its partner AT&T is selling out of iPhones in some of its own stores before Apple stores.
By noon ET today, for instance, at least ten AT&T stores in New York City were sold out of iPhones. Our own CrunchGear editor John Biggs, was turned away from an AT&T store in Brooklyn after waiting in line for hours and was devastated (see his bitter-sweet video where he asks, “Am I a person, AT&T and Apple? What if I was pregnant?”).
None of this is too surprising since Apple stores are bigger and can carry more phones in stock. But is Apple artificially limiting how many phones each AT&T store can sell today? One angry reader, Mark Feldman, suggests as much, detailing his ordeal today at an AT&T store in Waltham, Massachusetts. Excerpt:
The manager got up in front of everybody and asked who was here for an iPhone. He then went on to explain that the store was only able to take orders for iPhones that would be delivered to the store in the next 5-7 days. They would take our money and when the iPhones came in we would get a call to come in and pick them up. If they were not picked up in a week, they would be shipped back and the charges reversed. He also said — and this was the kicker – that he had more iPhones in stock but he could not start selling them until Saturday morning due to his contract with Apple! And those would be on a first come, first served basis. In other words, Apple had manufactured a sell out of iPhones for the first day so as to generate “every store sold out of iPhones” [hype].
It’s one thing to actually sell out of your product. It’s another thing to manufacture a sell out of your product.
I am pissed at Apple for taking me for granted! I loved my iPhone and was willing to shell out several hundred dollars for a 3G on Day 1. I feel used. Like a chump who was turned away so Apple could get a nice sound byte on the news and the Blogs. I am so angry that I am planning to vote with my wallet… I am going to wait and buy the BlackBerry Bold which is coming out next month.
(You can read Feldman’s entire e-mail at CrunchGear).
The artificial shortage theory would hold more water if Apple’s own stores started “running out” of iPhones as well. An alternative theory, assuming that this hold-back policy is effective in other AT&T stores besides the one in Waltham, is that Apple wanted to drive more first-day customers to its own stores where it could control the launch better. The problem, though, wasn’t in the stores, it was when everyone tried to update their iPhone software at once, and found themselves holding a brick instead.
Are people forgetting that this launch is occurring in 11 countries? And that AT&T stores generally make up rules on the personal whim of the individual store managers? I think so.
Wouldn’t it make sense that they want to make sure they have stocks for the weekend and the mass market customers, as opposed to the die hard geeks that are acquired customers anyway, whether they have to wait a couple more days or not?
Found this post talking about iPhone Day 2.0: Frustrating Launch!
Why do you hate Apple so much?
We were told by a salesman that they were expecting a shipment today at 5pm, but they weren’t supposed to tell anyone and they weren’t allowed to sell them until tomorrow.
Anyone just realizing that Apple’s business model is based around being a hype machine is incredibly stupid and I’d love to sell them all of my junk. Apple has been selling lifestyle since the 80s; it is their core product. Also, who waits in line to buy a phone? Seriously? It’s a phone. It makes phone calls. And what’s with all of the Apple employees clapping for people who enter the store? ONE OF US! ONE OF US! Sheep.
I couldn’t agree more. People will be treated like sheep by corporate entities as long as people allow themselves to be treated like that. Crowds of sweaty people stading in line for a product that’s “sold out” (read: suspicious) might be the hype that helps apple compete with MS for mind-share, but for people who have already bought into the apple message, it’s just annoying. Why couldn’t we pre-order? That would have given apple some real word sales projections AND done their already loyal customer base a solid.
What “if (John Biggs) was pregnant?”
Ah, that is the real question.
Screw Apple’s iPhone shortage. Who screwed John and successfully impregnated him? — far more interesting topic.
Please shift iPhone Coverage over to http://www.iphonecrunch.com
First off, its not “just a phone”.
Second, I too was the victim of a shortage. Read my rant here as comment 6 on 43 folders. Not going to type it out again. http://www.43folders.com/comme.....u-got-them
90 phones for a whole city. Brilliant.
Of course it’s a marketing ploy. Don’t you think with over a month’s notice since the announcement, AT&T and Apple could have populated their stores with product? I bet you tomorrow there are no lines first thing in the morning an you’ll find your beloved phone at an Apple store. In my case, I have the first generation handset and it’s fine. The new apps are fun. And AT&T’s 3G service is spotty if it’s available at all. I’m an AT&T wireless aircard user and today I had about the equivalent of dialup service - no 3G. So why bother with the 3G when the problem is 3G!
You cold look at this as creating scarcity on day 1. You could also look at it as forcing a slower, more even distribution of the inventory they have. Maybe Apple wants everything to be sold out today to create scarcity.
Or maybe they’re trying to keep all the back inventory from selling out immediately to stave off a month-long shortage over the next 4 weeks. If they blew all their limited inventory now, it would only encourage line-sitters and even potentially scalpers to come in on day 1 and go nuts.
Then no one else would be able to find one for weeks. That would suck a lot, too.
I was at an AT&T store in Chicago where I sat at position 50 out at least 200. Was there at 6:30 and had made it to the front of the line by about 10:00. At that time, while waiting next to go into the store, a rep came out and said that the last one had been sold. They also wouldn’t tell me how long it would be before the next ones would arrive, but I couldn’t help but leave with a bitter feeling towards the entire process and the arrogant employees at AT&T that withold information from new and existing customers like it’s a matter of national security. It’s a phone, the least they can do is come clean with people and not waste any more time of anyone than they need to.
We’re all fools for standing in those lines in the first place goes in knowing that its all a part of the big hype machine that Apple prides itself on so dearly. It’s all a joke and the only people laughing are those that could care less about handing over $400 of their money to two comapnies hell bent on hype and BS.
I’m lovin’ the iphone coverage…keep it coming!
Are bloggers (and other pundits) manufacturing a story?
I saw the same today… the AT&T had only 70 phones for sale, come back tomorrow or pay now and get it in 5-7 days…
Even though the Apple Store that was 300 yards away had enough stock for 350 people in line and counting…
Some times I just wonder really?
It’s just a F* phone!
But again is part of been cool I guess!?
I was in line from 8am-2pm at the Barton Springs Apple store in Austin, TX today. The employees said they weren’t allowed to talk about their stock, but they basically told me that they were “pretty sure” they had enough to continue selling until their 11pm closing time. All the while, it seemed like people were coming from all of the ATT stores all over town saying that they (ATT) were turning people away after numbers 30-40 in line. At least those people didn’t have to wait for hours to find that out, but it means that the Apple stores had hundreds in stock vs. the paltry low stock at the ATT stores.
One guy mentioned that ATT told him to come back tomorrow - that they were expecting a new shipment “tonight”, which seems dubious. Does UPS, Fedex, or DHL have special delivery late at night for ATT?
Making people wait for hours in line before telling them they won’t be able to buy a phone is the “lifestyle” that Apple is selling?
I would think pissing off the diehard fans is not a good strategy for longterm success. If a store only has 100 phones, how many are they planning to save for the “mass market”? Apple might just find that tomorrow is another day, life goes on, and their potential customers don’t really need a new phone and don’t bother to make another trip to the store.
Sorry Dave, it’s a ’smart’ phone. With a crap battery. Have fun not being able to make a call when you need to because your battery has died from all the time you spent twiddling with your Facebook app. At least Steve can admit what he is. And Jon, of course the bloggers are manufacturing a story. That is what they do. It’s all PR bs.
Apple is treating its customers like those are not humans but just a apple product addicts or something, to some extend they actually are apple product addicts but still this does not give you the right to treat your customers like this.
i f_cking hate apple for its egoistic actions and its army of stupid fanboys.
I went to an AT&T store in Linden, NJ this morning - saw the line - and decided I had better things to do with my morning. I called the store at 11am to see if they still had them in stock.
The representative informed me that they had sold out; offered me the same “direct shipment” deal where I pay upfront and they call me when it comes in. I asked how long that would take and he said he wasn’t sure but that they would have more inventory tomorrow.
Take that for what it’s worth.
I can confirm Mark Feldman’s story. I was told the exact same thing today at a AT&T store in Columbia, SC. The manager told me that she had 10 iPhones in the back but could not sell them until tomorrow morning. I was shocked and pretty ticked off.
I visited 5 AT&T stores in the bay area and they were all sold out. I also heard the odd story from employees at several of them that there would be more coming in that afternoon/evening. At one store, they said try coming back after 3pm.
For what it’s worth, a friend of mine was told the same thing (”We can only sell one case of iPhones today but we have a few hundred iPhones in back”) by an AT&T salesperson here in Utah.
@Loren’s Mom
Yeah. They sell a lifestyle of exclusivity and have been doing so since the 80s. It is just like the nightlife industry (keeping people in line outside of a club when their is plenty of space inside). By shorting supply and creating demand (through clever marketing that preys on people’s insecurities), they are able to justify the prices on their goods. Have you seen the prices on their computers? You can get a Win based laptop with equal specs to the $2800 MacBook Pro for <= $1000. When Apple was a computer company they may have seriously cared about their consumers because they were a small and dedicated group. Now they are a full blown electronics company and cater to the mass market. They use ‘early adopters’ (this is a marketing term itself) as part of their marketing strategy. Do you really think Steve Jobs cares about you? He just wants your $.
Actually, Apple sells a superior computer, so I’m willing to spend more. Ask anyone who does more with their computers than surf teh web or create Excel documents and they’ll agree.
The cool factor is secondary to having a computer that I wont have to replace in a year or two.
1 Windows Laptop @ $1000 / 2 years = $500 per year.
1 MacBook @ $2800 /6 years = $467 per year.
Dont kid yourself - they ALL want your money. This is America after all. It’s your job to spend your money wisely.
It’s almost certainly not Apple’s fault. AT&T are a big telecoms company and they tend to be very very staid in their thinking.
They’ll have a rule about the $ amount of stock that each store is allowed to carry, and they’ll almost certainly be delivering new supplies from central warehouses every day to keep that $ amount topped up to their max.
It’s just a shame that this w/end they didn’t think about allowing the stores to stock more! It’s also a shame that the stores can’t count the # of people in line to be able to warn them about shortages.
7 of the last 10 articles on your site have been about the iPhone. Didn’t think TC would fall this far. Maybe more by the time this posts.
Mike - you should take a step back and take a good look at the change that has occurred in the past two years (or even one year) with the quality of your content. Each blog had something worth reading, now it seems TC is posting content just for the quantity despite the quality.
I use to recommend you site to friend/co-workers… I don’t anymore. I use read TC every other day, now I review your archives once every other week…max.
this mr. feldman sounds like a whiney baby to me. maybe he should go suck on blackberry’s teet.
i love my new white iphone.
I think people are reading a lot of intent into what was most likely a logistics challenge. Launching a product behind cranked up PR into 22 countries with new and/or multiple partners in each country is an incredibly difficult process. It was highly likely that something would go wrong somewhere - whether it was extremely severe shortages in some regions, with some partner, or at just some stores. The global distribution plan was probably developed on a spreadsheet with moving inputs from the manufacturer and moving outputs based on demand forecasts from the country partners. The partner then took this and did their math per store. Add constraints around shipping logistics, manufacturing, etc. As with any large new product launch, it is highly likely that a lot of risk was carried through right to i3G-day. Shit happens.
On the flip side, why are people standing in line? Why not wait a couple of days or a week or two, walk in, pick one up, and walk out. It is really that important to get one two days earlier / before your friends. If you got jacked because of a line-up, consider it an equal iphone story to share with friends and future grandkids as ‘I waiting in line for 10 hours in the pouring rain to be one of the first to buy the 3GiPhone’. (Add hours and decrement weather every time you tell the story). Otherwise, really, why else would you wait in line?
GaryD
http://cellcanada.wordpress.com
these are all ebay flippers
first iPhone 3G in Canada
I stated this in the previous post.
I was in line from 6:30 this morning at the San Diego store. At around 10, they announced they were nearly out of phones but if we wanted to stay in line we could order one. I decided to do this and around 11 finally got to order.
I was actually the first person to not get a phone. While this was dissapointing enough, while I was in the store giving my information, a UPS guy came in with boxes of iPhones. People in the store were obviously excited by this, until the manager told us to all calm down, as they “couldn’t” open those boxes until tomorrow.
It seems to be absolutely godawful costumer service to turn down paying customers that have been waiting for 5 hours so you can have some “weekend stock”. I was extremely dissapointed and it’s obvious Apple is doing this to generate press.
peter urban, hahaha thats was good.
I got a ATT person on the phone today that said they were “out” but I could come in very early in the morning on Saturday and get one. I asked if I could come in when new ones arrived, and was told no. Now it makes sense…
People, people, people…
Cant you see that this “shortage” ploy has been played over and over again by Apple. As much as I dig Apple and their products, they are using the oldest trick in the book to create panic and extreme enthusiasm in anything they launch by playing the “out of stock” card. This creates the hysteria that - “ooh shit i better rush to the store and get mine now” starts to dwell in your impressionable minds.
If you look back at every Apply product or service launched since Jobs 2.0 came back (1991) you’ll see the progressive trend in how the “shortage” hysteria marketing tools has been successfully executed by Apples brilliant marketing teams.
Nothing to see here - business as usual - if u didn’t get yours today - guess what? - it’ll be there next week and everyday after that for eternity.
I got to the AT&T store here in north Atlanta today around 12:00. The entire time they were constantly counting the number of people in line and letting people know where the cutoff will most likely occur with the stock they had left. They were super nice to everyone in line, handing out water, and telling everyone else that arrived that they were basically out of stock and to only stand in line for the direct ship thing.
Supposedly this store had 100-150 phones in stock at the beginning, but said some AT&T stores had more. Unfortunately, they ran out of iPhones five spots ahead of me, so I just filled out the direct to store and was told that it should be in within 2-5 days.
Also, we were told that they would be getting another shipment in sometime today for tomorrow, but that it would be a smaller amount that they had today and that it was almost not worth even considering waiting tomorrow morning.
If you are an Apple fanatic then nothing anyone says (or facts) will ever convince you that you are being used! Who cares. Buy it later and you’ll get a better phone for less money.
FYI
Apple has indeed, manufactured a First Day iPhone shortage. Sorry folks, but it’s been implemented now, and the masses will be feeling the repercussions and unknowingly a lot of them will want the iPhone even more.
This alone says a lot about Apple as a company. “Agressive Marketing” as it is.
I dropped in at my local AT&T store this afternoon on the off chance that they weren’t sold out. They were, but the clerk freely volunteered that they had received a shipment early this afternoon but couldn’t start selling them until tomorrow. He said to be there when the store opened at 9am. That seems to be the same experience that many others on the site are describing.
@Joseph
Now there’s an AT&T store that knows how to manage a line, follow company protocol, but still share enough information that people can make informed decisions.
Call it Southern hospitality?
I went into the AT&T store in Cedar Park, TX (suburb of Austin) at 11:00 AM Friday and was told they were “sold out” of their 80 iPhones and that I could pay now and receive one when more arrived. I was then told by the salesperson that if I wanted shipment by “air” I would have to pay $15.00 additional. At that point I exploded! Apple LAID A VERY ROTTEN EGG!!! Why screw up all the good will and enthusiasm from so many who came to share in the excitement of being one of the very first owners?
I feel like I have “been had” and “personally violated” because of their phony crap about “shortages”. From now on Apple Inc. is just another company that will soon be surpassed by another company that will have better technology. Hopefully theywill not screw it up be being so full of themselves by taking their customers for fools!
Steve Jobs should immediately FIRE his iPhone marketing staff and the third party agency that told Apple, Inc. that this would be a “successful” policy! Do it Steve! Save your company!
Maybe it’s just me, but I don’t think Apple has a need to manufacture a “sold out” look - the customers are doing a fine job of that.
I believe Apple does not want the stores to sell newly arrived phones immediately because they want to reach into the different classes of buyers that each subsequent day brings. Today, they reached as many of the hard-core/easy sales as they could allocate. This weekend, less-committed buyers get a shot at the phone if they stand in line early. And so on for days or weeks, until supplies can meet demand.
When a hard-core/early buyer shows the phone to his/her friends, all already have a phone and only a few will converted. But when a casual shopper/late buyer shows the phone to his/her friends, even fewer may be converted, but some do not yet have a phone and are curious about that faster, cheaper phone that is awfully sexy.
By supplying _some_ product to each of the types of customers, Apple can build a broader potential customer base.
They must have planned for a significant percentage of today’s frustrated shoppers to order today and wait an agonizing week.
Are there no laws or rules against Blackmarketing and Hoarding of consumer products that creates artificial demand in the market?
Where is the FTC or the WTO or whatever organization that looks into fair trade policies?
What a bunch of fools!
Why hav you all bought into this hysteria? AGAIN?
ROTFL!!
People clam down.
One of the previous stories here on TC was about the widespread problem with activation process failing because the servers were overloaded.
There is no conspiracy. Apple just estimated how many activations their system could handle in one day*, and asked partners (AT&T and others around the globe) to stagger the release of inventory as a way to cope with the problem.
*Obviously Apple over-estimated what their system could handle on launch day, but that’s another point entirely.
I will never own an Apple product, never. Good luck to all of you with your new iPhones.
I drove by a local AT&T store here in NJ this morning and the line was 100 deep! My work has a business account with AT&T and we were able to purchase 3 new iPhones online and they will be delivered on Monday. Beats waiting in line!
Working professionals get the shaft on a day like today, and Apple and AT&T don’t frigging help! I called ahead (yesterday), and the AT&T store said they weren’t expecting a line.
On my lunch break, which I took an hour early, I show up to a mall (King of Prussia Mall in KoP, PA) that has 3 (yes, 3) AT&T stores AND an Apple store. (It’s big… 2 major sections). I go to the first section, no AT&T store… wh-wh-what?! Yup, gone.
I get back in my car and drive to the other section and go to the first AT&T store (out of 2 in this section), which is filled with employees and customers. A nice woman comes over and asks, I ask, and she tell me they’re sold out, with “We didn’t get as many as we thought.” F
I leave, go downstairs and walk the labyrinth of stores to the 2nd AT&T, which has two employees and no customers. “We never had any.” F
I leave and head to the Apple Store, and a line. Two hours wait… no thank you. I was made to feel that I was missing out. Are you kidding me? My Razr’s lasted 2-1/2 years, and my 4th Gen iPod 20gb is still working just fine. I’ll wait another day, or be crazy and wait 3 days… I’ve already held out almost 400 days and my life still seems to be in order and my family’s still happy.
Apple, AT&T = FAIL
It was exactly the same here in Holland. Per store there were only like 25 available, while there were hundreds of people wanting to get one. Yeah, then you can expect to sell out. Smells like manufactured shortage to me.
I was at my first AT&T store an hour before open. After being there for over an hour, and talking to the manager more than once (who had come out to be friendly), he eventually came back to say that the back half of the line (starting roughly at me) would not be getting phones. That meant they had less than 100 in stock at launch.
I drove to the next AT&T store, which wasn’t open. I called AT&T customer support to check whether they would have iPhones when opening at 10am. The woman on the line was nice, but had no idea. I waited an hour, till 9:30am, to meet an employee coming to setup for the 10am opening. He looks at me and says “We have no iPhones, you want to go to the mall across the street”.
I drive over there and find a small line, wait another 30 minutes, and the manager comes out and says they have exactly 2 phones left, both 16gig white. Of the 5 people ahead of me, the first guy wants, then the punk kid in front of me that till that moment had said he’d take nothing but the 8gig black. Turns out he was already under contract. No subsidy? No problem. He remembered to bring his mom who didn’t blink at the price hike from $199 to $550 (ish?).
Now I have a flight leaving for a week and a half of travel starting Monday, where I *might* get a phone ahead of time, only if UPS by some miracle arrives at the store’s opening that same day.
The manager tells me: Yeah, Jobs likes to create a scarcity. There’s a wharehouse full of these things in TN, we can have a phone for you in just a few days.
WTF???
I’m watching sites online saying that Chicago, SF, etc. ran out at 4pm. Meanwhile, the first store I went to in my city had less phones than the people lined up before it even opened, and the next place ran out before 10am.
THIS IS BULL.
All I’m saying is that this had better do something good to my shares in Apple, because certainly I’m hella pissed off at them as a customer. Do you hear me Apple? This is total shit. You can promise customers, at *all* of the stores, to have phones within 4 days, but in the last many months since the iPhone announcement you couldn’t just stockpile more boxes of these things in stores?
Failing a reasonable explanation, this is just another datapoint in the long list of reasons why people should buy Apple’s products only so long as they continue to be so nice; the second there is a better option, you had better damn well believe I will feel no shred of loyalty.