Rotten Apples

The Apple Watch launch has been very different than those of recent past--and not in a good way.

I've been a part of the cult of Apple for a while now and ever since the release of the iPhone I have always gotten caught up in the hysteria with the launch of a brand new product. iPhones and iPads and MacBook Pros all stir up an excitement to have the latest and greatest. I admit, there is a feeling of cachet or exclusivity with being able to be the first to get something new.

Getting an Apple Watch has not been any different, in that regard, except in one small way: While I was able to get in the first wave of pre-orders, I was shocked that others have orders backed out all the way until July. I know I'd be livid that a pre-order would have to wait so long, so soon after pre-orders were being taken.

To add insult to injury, it was announced that that there would be no in-store stock on launch day, April 24th, nor would there be until June. When I read this, I asked myself several questions:

  1. Why is supply so low? Did Apple not anticipate that demand would be so high?
  2. Or were there so many late-breaking production problems that it would have been impossible to meet demand?
  3. If it was any (or all) of these, why didn't Apple wait a month more until they had better supply?
  4. Why did they even announce this in September if it was so far away from being ready?
  5. Why did they only do online orders and not distribute through their retail stores, the local face of Apple?

Apple hasn't given any hints on the complicated nature of their development and production and I can't think of any good answers for any of these questions, save the last one:

Online-Only Orders

Given the impossible situation in which they found themselves, online orders were the only channel that would guarantee them the most control over getting the new devices into the hands of early adopters.

Last year I waited in line for a set of new iPhones (I was getting these for development at work; I preordered my personal device the week before). I got in line the night before and I noticed something very odd in the morning when we were about to go into the store. The people in front of me were not getting phones for themselves. They all knew each other and a few minutes before they were allowed in, someone came with a big wad of cash and was giving them just enough money to buy two phones each.

These phones were likely going to be hocked on eBay, or likelier still, ferried back to China for a significant markup. There's little Apple can do to combat those buying devices for resell in other parts of the world, but I have to imagine that it drives them crazy. I'm sure it tends to mess up purposeful supply distribution, and worse, makes customers upset that they can't get the items they want when they want them.

With online-only orders, Apple minimizes the power of resellers and their disruptive practices, while maximizing the opportunity for those that really want them.

But Why Such Small Supply?

This really only speaks to the strategy for dealing with small supply, not the core questions of why Apple has such small supply to begin with. I don't have any good answers, but the whole affair smells rotten. Lack of planning, lack of leadership, and/or failure to anticipate issues that would conflict with the messages that Apple tend to try to send to their customers.

It's too early to tell, but I am interested to see how the rollout actually proceeds and how this disastrous launch affects Apple in the long run. It may be nothing. But something doesn't smell right.

Posted on Apr 17
Written by Wayne Hartman