Carl Howe, writing for Blackfriars Marketing, reports, “One of my blog readers wrote in with the following very interesting story: “I am a regular there and was talking with one on the higher-ups when he told me about a change in policy effective yesterday (10/24) regarding the sale of iPhones. Effective immediately, there is a limit of 2 iPhone purchases per person (not, the individual was clear to tell me, per transaction).”
“Given that Apple estimated in its earnings call that about 250,000 iPhones have been sold to unlockers, and that Piper Jaffray’s Gene Munster estimates that Apple earns about $432 per AT&T activated iPhone, I can see how Apple might want to take this approach. But it does suggest a possible problem for particularly well-heeled Christmas shoppers who may want to buy an iPhone for everyone on their gift lists,” Howe writes.
“I suspect that these restrictions have less to do with squelching the unlocking business, and more to do with Apple’s holiday marketing and sales strategy. If Apple lets consumers buy five or ten iPhones at a time, it runs the risk of 1) depleting limited stocks of iPhones over its critical holiday selling season, and 2) having those resold phones, which get sold for very high prices with possibly buggy unlocking software, sully Apple’s consumer experience and brand image. That would be, as people in consumer marketing business would say, bad. Want proof? Ask Nintendo how much fun it was last year not to have stock of Wiis at Christmas,” Howe writes.
“Despite what seems like an endless iPhone launch, the iPhone has only been on the market for four months now, and Apple’s manufacturing capacity is probably still only about 500,000 iPhones a month, if that. With the iPhone launching in Germany and the UK in two weeks and in France in a month and with holiday shopping demand ramping up, the last thing Apple wants to happen is to run out of iPhones for any of its markets,” Howe writes.
More in the full article here.
You know you’re doing well when you have to restrict the number sold to each consumer.
Damn! There goes my plan to get rich this Christmas by buying hundreds of iPhones in the hope that Apple will run out around Christmas and I can resell them for twice the price.
I guess I’ll have to go play the lottery, instead.
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You know they are being sold unlocked when a customers buys more than two iPhones.
The reason Apple is restricting sales is due to Time Machine. When it is implemented on the iPhone, you will literally be able to travel back in time. Demand will go through the roof.
“Despite what seems like an endless iPhone launch…”
LOL, tell me about it. Feels like the iPhone is a year old.
As for the limit, I think it should be five phones.
is the going price, and it seems Apple sees resellers making more money than Apple on its phones…in effect, mass purchasers are selling the gadgets on ebayand in large quantities….shipping worldwide. Just do advanced search, Apple iPhone, highest value first and the list is endless. By lowering the price to $399, Apple made their phones available to eBay profiteers. Rationing them now two at a time is a partial solution, I suppose.
hmm I have three already, was gonna get one for my other daughter, wonder if they will restrict that?
Anytime a company places RESTRICTIONS on the sales of its products, you know they are doing very, very, very well.
Imagine demand for a Hannah Montana edition iPhone.
i/o of buying iPhones to get rich – have a simpler strategy – buy apple stock;)
If you really want more than 2 then why not just go two days in a row. Not that hard to figure out.
at Jeff,
Yeah, with the Time Machine feature on the iPhone, I could go back in time to July 4 in the year 1997 when Apple’s stock price hit $3.47 and buy a sh@tload of shares.
Have four already.
Planning on 3 more for C’mas presents to office staff. Will stick with iPods for special clients.
“Effective immediately, there is a limit of 2 iPhone purchases per person (not, the individual was clear to tell me, per transaction).“
I plan to file another lawsuit since they are limiting the profit I can make by reselling them.
didn’t mr. porsche start artificially raising prices on some of his cars because people were buying them as investments instead of driving them?
Went into my local Carphone Warehouse store here in the UK four days ago to see if I could get any info on the iPhone before it’s 9 Nov launch.
The guy behind the counter confirmed it’s the same M.O. as in the States:
two per customer,
the stores close at 3pm to reopen at 6pm,
plastic only – no cash
He also said that they were due to get their in-store displays this week but that there had been some sort of hold up with the roll out (couldn’t/wouldn’t say what) and that he was expecting all of the stuff to arrive next week but he was able to give me a bad photocopy of a fax he’d just been sent with the iPhone pic and specs as well as CW’s selling rules.
I was more pleased though when he told me that plenty of chavs had been in asking about the God phone but did an immediate volte face when told of the costs involved. That’s good to hear.
Anytime a company places RESTRICTIONS on the sales of its products, you know they are doing very, very, very well.
Agreed. And just when the pundits were trying to claim the iPhone wasn’t selling.
Could Apple be trying to “Cabbage Patch” the iPhone in time for the holidays? Although it’s not like Steve to intentionally limit stock or sales, unless of course an update is imminent….
The U-Village Apple Store is closed for renovations til Nov. 2nd. WTF? Couldn’t they put off the redo until after the Leopard release? There goes my Friday night. Boohoo.
woot
I just like to type it cause it looks cool
If you want to get rich off the iPhone then buy AAPL. I bought $18k worth @ $47/share. It ought to be worth just under a quarter million in less than four years if it gets up to $600/share as predicted.
This has the potential to piss off quite a few legitimate customers. I can imagine any number of people wanting to give an iPhone to more than two members of their family for Christmas.
-jcr
I’m surprised the article never mentions the fact that iPhone is due to go on sale in France, UK, and Germany next month.
To me, this is the simplest and most obvious reason why Apple would want to limit people from buying iPhones in the US.
@Peter: ummm, except the last paragraph of the article is all about European launch dates.
Hmmm, sell them at Christmas instead of now, effectively holding them in inventory in the meantime??? What business school did Carl Howe go to?
First, we learn that iPhones exclusively simlocked are unlawless in many european countries (France, Belgium, etc.).
Next, we learn that Apple limits the selling of 2 iPhones per individual (by week, month , year?). But Apple lawyers seem to ignore that many European countries (not necessary the sames than those above) statute that the refusal of selling an availble item is an unlawfull practice,,;
And last but not the least. It’s unlawfull in many countries to refuse to be payed in local valid cash, because instead Apple want to be paid with plastic card as a way of personal identification of buyer that could not buy more than 2 iPhone everywere in the world…
So Apple is going progressively in absurd politics if continuing in that direction : an international legal wall.
Because Apple want to preserve its exclusive contracts with ATT&T;, Orange, etc., that co. must go further in restrictions, verifications and somewhat unlawfull practices abroad.
I could understand the many reasons and justifications for these restrictive transaction rules, but these pseudo reactive solutions are illusory, countreproductive and at the end very bad to Apple public image.
How are they going to track this? What would prevent a person from buying from different cards, or buying from different stores? I don’t see how this bite has any teeth – seems like a symbolic gesture to mollify their partners and garner extra publicity.
Clearly it has more to do with unlockers than any stock restrictions.
Otherwise it would be all the same to Apple if they sell their entire Christmas stock to one person or two at a time to a lot of people.
No business intentionally restricts the sale of an item to limit 2 per customer unless it’s a loss leader to get people into the store.
Here the situation is similar because Apple makes much more money from a phone used in the US with AT&T;than one sold overseas unlocked.
I think there has been an issue of people buying lots of iPhones and then sending them overseas. Of course its good that people in China, Europe, S.A, etc. want the iPhone, but it takes a little luster off what are suppose to be US sales #s (if its in the 200k- 300k range, for example.)
I don’t own one and am not up on all the details re: buying and activating one, especially for those outside the US, but with exchange rates the way they are I can see people coming in from England, for example, and buying one like they do with iPods, so I’ve heard. (Maybe someone who knows more about buying a cellphone in the US and using it in Europe can comment on that.)
@ Get Real
“Here the situation is similar because Apple makes much more money from a phone used in the US with AT&T;than one sold overseas unlocked.”
Getting money is important, but selling 10 millions iPhone at the end of 2008 is even more important. Long terme relative domination of Apple in world mobile networks is absolutly important. If Apple is going on too much confusion about the practical aspects of his business plan with ATT&T;or Orange or whatever international network, the results could be catastrophic for his corporate image of simplicity, easyness, global awareness, etc.
Yet every products of Apple could be used easily with small adaptors (110/220 volts, local phone jacks, localized keystrokes, etc) but it’s not the case actually with the restricted localized use of iPhone as a GMS simlocked mobile. Only about that aspect, I think it’s a shame for Apple and that mean losing the long term perspective of an international standard bearer in favor of short term annual revenue.
Otherwise it would be all the same to Apple if they sell their entire Christmas stock to one person
Damn. So much for Ballmer’s plan to buy up all the iPhones, thus giving Windows Mobile a lifeline into 2008…
Can’t beat ’em? BUY ’em!
it seems like Apple’s attempt to control and restrict what happens in the phone world in the same way it controls and restricts what happens with it’s other devices is crumbling already.
@ all those who are putting this idea forth: “You know you’re doing well when you have to restrict the number sold to each consumer.”
I think it is also good for the consumer, ensuring that the product will be available to anyone and that cheap profiteering is kept to a minimum.