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.
If you wanted a phone you should a bought the cheaper one a few months ago. 3G is not that big of an improvement and isn’t worth the extra money AT&T is charging for the new contract.
I spent 2 hours upgrading my original iphone to the new software (2.0) and it’s awesome. Even better I have all the features and software of the new phone and I don’t have to pay a thing.
Three stops at different stores, two calls to AT&T…yes, it was obvious it manufactured and that they are shorting supply. I paid to have it in 5-7 days…but it’s extremely odd that I could also go there tomorrow morning and try to get one of the ones for sale “next day.” Obviously they were already sitting in the back office waiting for the manufactured shortage.
This is all very funny to me. How apple lovers are such sheep. The last iphone dropped 200 dollars after a few weeks on the shelf. Oh there was such an uproar, these same people are the ones standing in line for their next iphone, what sheep. hahahaha…babababa
YES. But thats what you do when you have a sort of monopoly product(perceived or actual)
I was at an AT&T store in Braintree this morning, got there at 7:00am (was 14th in line) and was greeted by the manager asking us if we needed chairs or water. We were asked what iphone we would be purchasing and even told how long it would take us to get out of there. Some of the best service I have EVER received! Good Job guys!
Geez, anti-Apple folks are a bitter bunch, aren’t they? I’m no fanboy, and I’ll readily agree that they’re not perfect (wasn’t much interested in iPhone 1), but why do people get so freaking angry that other people like Apple?
@43
“Are there no laws or rules against Blackmarketing and Hoarding of consumer products that creates artificial demand in the market?”
Yeah, we should give the government the power to penalize private companies for hoarding THEIR OWN PRODUCTS. Give me a break. Better yet, in order to create total fairness, maybe we should just abolish private companies altogether and let the government create everything and hand it out with some kind of ration system.
Finally, to all the people bitching about how TechCrunch is going downhill and blah, blah, do you really think that Mike and the TC team aren’t always watching their traffic stats, advertising revenues, etc? If they’re posting more and more iPhone stuff, it’s because they’ve learned that the market wants that and will respond to it. If you don’t like it, go elsewhere. But don’t bother bitching about it like we all care and will miss you deeply. We don’t and won’t.
Getting REALLY TIRED of all the iPhone coverage, people. Not all of your readers are as ga-ga over the iPhone as you all are. One more day of it and I’ll be unsubscribing….
AT&T still wold have sold out, not just as fast. There aren’t that many being held back.
This is not entirely Apple, it’s a fairness policy of AT&T for store managers and salespeople. They are in “sales” thus part of their compensation comes from store revenues. - commissions & sales goal bonuses. large volume on launch day affects the numbers, thus if one store had 200 phones and one down the street had 75, workers at stocked store would make more money, and that would piss people. Especially, if a store manager missed his budget by an amount that iPhone sales would have generated - that went to another store.
Because inventory is still in transit, some will get luckier than others if there isn’t a predetermined cut-off that has been predetermined - agreed upon & fair. If store A brought in most customers but store B got shipment in morning (A afternoon) A runs out, and its customers go to B where more phones are. A gets more phones later, but most customers came to them first hooked up at B, and they won’t be coming back for 2 years.
Each store then has a fair chance the next morning. Store managers hate each other and there is big competition, and it’s all about which part of town you are in. Two buddies- both started selling phones at wal-mart and da ‘hood, neither coulg make a dollar (all prepaid and customers with attitudes) because the demographic, one worker pretty hard and got lucky to move to the store in $$ area, with soccer moms spending $$ and burning minutes. His income increased five-fold just b/c the location of the store. My point is, it’s political, and the hold back is a measure of fairness.
2008 is a great year. First, Obama. Now, iPhone 3G. What’s next?!
I agree with post #57. As good as the iPhone my be, so many people now have one that I’m looking for alternatives. I was reading an article in which the author had 12 friends with iPhones, and they all used the default ringtone (so everyone reaches for their phones when one person gets a call). Apparently, HTC is coming out with a formidable competitor in North America soon; guess we’ll see.
Same situation in Germany, and I’m sure elsewhere too. A store in Düsseldorf (about 500.000 citizens) was “sold out” in no time, sales lady admitting to the reporter that’s because they had “only 12″ of them anyway. That’s as stupid a scarcity as is the collapse of the activation servers - either intentionally manufactured, or the biggest rollout screwup of all time.
And kudos to #9, I wholeheartedly agree. Anyone who’s dumb enough to stand in line for a lifestyle status symbol like this on rollout day deserves to be spanked with a wet fish, or maybe shipped to Africa to see some people who *really* have it bad and a real reason to complain about something. Spoiled decadent whiners.
And people are offended that Phil Gram says the country whines too much.
And that should be kudos to #6 of course, I really shouldn’t be reading my news standing upside down.
It was kind of funny to read about Apple’s chosen Swedish carrier Telia contacting an event organizer to hire 50 fake line-sitters to each of the 3 biggest cities’ stores to “manufacture” this hype. Apparently this was cancelled though as there were enough real line-sitters to make it into the news.
“It’s people!”
While Iphone 3G made it to the stores. People here in Asia still have to get the old 8Gb Iphone unlocked and it costs over ~650 U.S dollars a piece.
See the irony.. When is apple going to launch Iphone’s here is out of the question. Will there ever be a contract based services available here?
As the mass marketing scams seems to hover over the cyberspace.. we are still left out scavenging the blogs and forums for updates..
Screw you globalization.. ~__~
They aren’t manufacturing a shortage. Look at the iBrick phenomenon. They are merely trying to spread the load on their systems. I think it’s as simple as that.
What a ridiculous article. I know for a fact that Apple has plenty of stock. Who goes to an AT&T store for an iPhone anyway? That’s lame. Apple has plenty and AT&T has a limited supply just like last time. You should know this by now and shut up.
Are You paid for writing about Apple almost on every post?!
@#67:
Ray, when you launch a product, worldwide no less, you ramp up your resources to accomodate any such possible peak access demand. Under no circumstances, no way, no nah nevah, should their activation/iTune/iBrick servers come ever near crashing *on frigging rollout day*. That just cannot be. It’s either one massive screwup that should cost someone’s job, or it’s an intentional marketing ploy to induce the notion of awesomely high demand.
What “if (John Biggs) was pregnant?”
What an idiot. If he were pregnant, he would ahve better things to do then to stand up in the middle of the night and wait 10s of hours in line just to get some over hyped gadget to feel cool.
The iPhone launched in 20 countries at the same day, shortages are expected in the first few weeks. Look at Sony’s PS3, and other devices.
How silly!
AT&T stores ran out before the Apple stores the first time around also.
Of course Apple wants to get more people into their stores than the AT&T stores…..
Of course Apple wants to sell as many phones possible in the first day. The more people that have them shortly after launch, the more people that are talking about their new phone to friends….further increasing sales…..
i’m sorry, IS TECHCRUNCH AN IPHONE SITE? what the hell, is all i read from the launch of the 3G iPhone…
=P you can’t really blame apple.. for doing so i mean its a good marketting strategy… i mean profit maximization is the ultimate capitalist goal.. right?
i was at an att store yesterday and got a phone but no att employee could answer the question many people were asking regarding how many phones they had in stock and whether waiting in line would be fruitful. instead they kept saying the system would tell them when they were out. which made no sense if they were talking about physical inventory, but if there was a cap it now makes sense
We’ve also had artificial demand being created here in the UK. This, I think, was done to avoid the embarrassment of the empty stores and apparent disinterest that we saw last time.
We also had a ‘computer glitch’ that protracted purchases and conveniently held buyers in the shops for longer.
Clever stuff, from a marketing perspective, but woefully dishonest.
I wouldn’t doubt it for a minute. Steve Jobs is a sneaky son of a gun.
Steve Jobs knows how to make appletards desperate.
“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?”
LOL. Yes. It’s called exclusivity. Take a marketing course.
Too funny.
My wife went into an AT&T store Friday because she had spilled water on her old iPhone and she could no longer use the bottom row of dial keys on her screen. She was told that the store was out of phones but would have more to sell Saturday morning at 9:00. She then asked when the next shipment was due in (since it was already late afternoon), and the person declined to answer the question.
If it weren’t for the fact that her phone was damaged, we really wouldn’t care, but the business practices of Apple/AT&T really have to be called into question here.
BTW, the AT&T store said that their “direct fulfillment” option (pay now, get a phone when the store feels like giving you one) would not guarantee a phone within a specific time frame, e.g., 10 days. You’d basically get one when you got one.
I am absolutely convinced that Mark (and the manager) are accurate and these are fake sellouts designed to keep the hype alive. It seemed incredibly obvious to me yesterday afternoon when I went past *two* AT&T stores in the Los Angeles area with nice, pre-printed “Sold Out” signs in the windows. Those really brought it home.
This launch was handled poorly, at least at AT&T stores. As for Apple stores, there are none near by.
The management of the local AT&T store !@#$% sucked. At 8pm we had about 40 people in line. They had us all fill out paperwork, asked what model we wanted, etc. Around 9:30 they announce that they are out of iPhones. About 15 people walked out of the store total. There was one woman with a number of little kids in tow that I think must have walked out with 4 of them.
Basically, the local AT&T store only got 30 phones. But they tried to play up that they had more only to bait’n’switch to have us order them to be drop shipped. And while this was the closer store to me. There is one I pass by closer on the way to & from work. Which I’d rather have drop ship. Later went there and they were not drop shipping anymore.
Frankly…. AT&T and Apple both blow chunks on this one. Apple fan boys, go stare at a mirror please. For the rest of us normal human beings, while we like good products we disliked being jerked around and played with.
i went to my local att store on friday around 6pm. the guy said they were sold out, but they would have more tomorrow. I asked what time is the shipment? he said they open at 8am and it’s first come first served. I replied “what if you don’t get the shipment by 8am”…he said they will have them for the store opening.
led me to believe that they had them in stock and were told to only sell a certain amount.
I hear apple and ATT are offering $100 refund if they dont get your phone in 36 business hours after you purchase one.
ptosa ihlkfy mzvkb evzoriub qpwcmfx msvbz tdqfpchzm