Apple rethinks inventory management for iPad 2 as lines outside stores persist

“Apple has changed its inventory management policy for iPad 2 deliveries, having its retail stores hold on to new shipments until the next day in an effort to ease the sales process for both customers and employees,” Neil Hughes reports for AppleInsider.

“A person familiar with Apple’s retail operations informed AppleInsider this week that the new shipment of iPad 2 stock sold by some stores on Tuesday was actually delivered on Monday,” Hughes reports. “Apple is said to have elected to hold the inventory for a next-day sale to grant its inventory control specialists the time to ‘calmly and accurately’ process new shipments.”

Hughes reports, “Apple’s previous strategy was to get products from the pallet to the shelf as fast as possible. But that approach was said to have caused ‘utter havoc’ for Apple’s retail employees, and led to inventory inaccuracies.”

Read more, and see photos of iPad 2 lines form today, in the full article here.

MacDailyNews Take: What part of ‘iPad 2 Availability Tracker’ does Apple still not understand?

45 Comments

  1. I was walking by the main San Francisco Apple Store on Friday at 5pm, amazed that the line had actually wrapped around the entire city block to end up back at the Apple Store (from the opposite direction). Then, a large white Fedex semi-trailer truck pulled up next to the “back door” (actually an unmarked side door), near the end of the line. Apple was probably doing some iPad “inventory management” to ensure there was sufficient supply at that prominent Apple Store, maybe at the expense of other nearby locations.

  2. As far as I’m concerned, Apple has done a piss-poor job of dealing with the huge demand for the iPad 2. Why, for example, haven’t they posted a web page that tracks iPad availability at all their retail stores? Customers have no other option but to either stand in a long line or keep calling their local store. That’s bad for both customers and Apple sales staff. They most definitely could be doing better.

      1. Ordering online with a 4-5 week wait time is hardly a good option! Not everyone who wants a new iPad is merely indulging a desire for instant gratification. Some people have been waiting months for this device. The video camera alone makes it superior to the original iPad. Apple might think they have a “hit” on their hands when the new model immediately sells out, but they are also creating quite a lot of frustration for their customers. Hard to imagine how that can be a good thing.

      1. Actually, Apple is helping to create a stampede by failing to have adequate inventory for the launch of a product that they knew very well in advance would be a hot seller. If they weren’t prepared to meet demand, they should have delayed the new iPad’s availability.

        1. Okay; you’re right. Apple should have waited another 6-8 weeks to build up enough stock first. Oh, wait! That would be even longer than the online order wait period! Silly you!

          “Ordering online with a 4-5 week wait time is hardly a good option!” (omalansky).

          “Some people have been waiting months for this device” (omalansky).

          So wait a little longer. Why does it matter how long you’ve been waiting? Is your life in danger if you don’t get an iPad 2 by tomorrow? No? Okay, then. Shut up, and get back in line.

  3. Apple should be doing what the free market normally does when there is limited supply. They should be raising the price. This would help alleviate demand, and help to build up supply for those people who absolutely have to be the earliest of adopters. Meanwhile, the remaining people can wait as supply continues to increase and the price starts to drop back down to normal. Unfortunately, they have little supply, and the price is way too low. They are creating a mob frenzy because of this and the only people who suffer are their customers as a result, who end up waiting in long lines and walk away with nothing.

    1. Joe… your idea is the most non-consumer friendly approach I have heard of. Raising prices for customers is NEVER consumer-friendly. Their price is on the mark, and their competitors should stay as flummoxed as ever.

      As someone has mentioned previously, it’s about ordering online and simply waiting for it.

      1. Trying to fight market principles is the most consumer unfriendly way to deal with customers. The number of disgruntled and unhappy customers who have waited in lines and come to the stores over and over again to try to get the product and leaving empty handed is wrong. Trying to fix the price doesn’t make sense. Every other good or service has prices that rise and fall based on availability. The fact that apple thinks it is above the laws of economics is beyond me. Even with the price remaining the same online, when you factor in time, they are still inconveniencing their customers, especially those who if given a choice to pay more and getting a product today, or waiting in long lines, getting frustrated, and then having to go online and wait even longer, is just plain obnoxious. It is obvious the product is in MUCH higher demand than any of its competitors, and they also have the least supply of any of their competitors. The price SHOULD be going up. It is economics 101.

        1. People shouldn’t complain about the availability of the iPad2 unless their life depended on it. Not their whiny, pathetic life but their actual life.

          Joe, Apple’s product demands are just a sign of remarkable success. Don’t mess with success. People can wait and will be happy when they finally get their iPad. Economics 101 is what all the other companies are using and suffering from. Apple obviously doesn’t play by the rules of others, k?

          1. Apple isn’t playing by the same rules, and in many ways will suffer the consequences from that. Don’t discredit or underestimate the numbers of people who will buy alternatives simply because of the dim witted and idiotic decisions to do price fixing on a low supply and highly demanded product. Of course there will be shortages and frustration and anger. If Apple won’t do what the market expects, I know craigslist and ebay will step up to the plate and satisfy the market in ways that Apple is currently failing at…

            1. Nope, but I bought my ipad on craiglist and got it that day, no fuss no muss. Got the model and color I wanted, exactly the way Apple should have sold them in the store.

            2. It may be Econ 101 to price what demand can support but once you do that for the iPad you lose one of the largest competitive advantage they have, PRICE. Apple doesn’t want to reduce lines or frenzy at the stores. Everytime something like this happens it makes headlines in newspapers, websites, and word of mouth. Its free advertising and convinces people who are thinking of buying one that Apple has the best product because everyone wants it. I think the people at Apple know full well how economics works but I think they were sick of getting the rich niche crowd.

            3. Paul, all the hype in the world does no good, if you get to stores, wait in long lines, and there is no product to be found. I still argue, even if the price is a differentiator, it can only be so when there is enough supply to drive the price downward. Right now, in the initial first days, the supply is obviously too small, and the demand is way to large. Not to mention factoring in complications due to the japanese quake. Apple is doing a great dis-service to all the people who want ipads, and if anything I think there is going to be a point where all the anger and frustration is going to build to a climax and start to work against them… Fighting economic principles is not the way to build happy customers…

            4. Joe, I personally CAN wait. I’m not angry about it in the least. You see, there are simply NO alternatives to the best tablet available. Apple is not going to lose me as a customer for their iPad 2.

              Now, on the other spectrum, if Apple decided to increase the price, I would be terribly dismayed. During these harsh economic times, I’m sure many, MANY others would feel the same way (you obviously AREN’T included in this demographic.) Apple’s competitive advantages outside of it’s large ecosystem of third party add-ons, iTunes and huge app selection is PRICE. A decent price is imperative to the iPad 2. People like you who are willing (and can AFFORD to) pay extravagant prices can go to places such as Craigslist, instead of WAITING A FEW WEEKS have that option. Not everyone has that option ($$$) and instead choose to wait a bit for their food, air and wate… I mean their iPad 2.

              You see, Joe, it’s all about the world’s poor economic state that we are currently living in, too. Enjoy your new iPad 2… how much did you pay for it? In China I hear they are paying close to $2000, lol!

              I’ll wait for the iPad 2… soon enough I will have enough cash saved up for it. (It will take me longer in YOUR scenario which I detest. Anything higher and I might as well save up for a new MacBook hehehe!)

              I’M SURE AS HELL NOT GETTING A XOOM! lo! I can see competitors to the iPad 2 being more than happy with your scenario. It would make the competition actually competitive in some people’s minds who have no clue whatsoever about their subpar technologies and ecosystem.

              iPad 2 rocks, and people see that fact apparently.

            5. Increasing the price for IMMEDIATE purchase and having the price fall over time, is a better way to handle immediate demand, because it actually means supply is available, even if the price is out of reach of a large number of people. This is a self regulating principle of markets that help to keep demand under control, and help to reflect scarcity in product availability. Instead of having to call a store and ask if they have anything in stock, the question could instead become, what is the current price for what they currently have in stock. You can save yourself the trip, until the price is reached that is in alignment with what is available and how much demand is currently occuring, or what you are willing to pay.
              As for the state of the economy, if people are that incredibly poor, they probably shouldn’t be buying an ipad or anything electronic if it is keeping them from paying bills or putting food on the table. Waiting online for a delivery really should be no different than waiting for the price of the ipad to drop as supply becomes available.
              As for it taking longer to buy an ipad in my scenario
              that isn’t necessarily true. You might save the fixed price that the ipad costs, and end up waiting longer as the demand shifts from brick and mortar stores to online. Shifting sales online doesn’t magically or mysteriously solve the issue with high demand and low supply, especially with world turmoil and turblance that will inevitably be disrupting supply and availability. It is very probable that it goes from weeks to months. Keeping the price low will only make the supply that much more scarce and the wait that much longer.
              As for the competitors of the ipad? I think many of them are happy to see people going to stores and getting disgruntled that ipads are no where to be found. It would be interesting to see statistics of people who get fed up and buy xooms and touchpads out of disgust and unhappiness with the way Apple is treating customers.

            6. Joe…

              “Increasing the price for IMMEDIATE purchase and having the price fall over time, is a better way to handle immediate demand, because it actually means supply is available, even if the price is out of reach of a large number of people.

              Nonsense. The iPad is priced appropriately given the price points of Apple’s other products.

              “Instead of having to call a store and ask if they have anything in stock, the question could instead become, what is the current price for what they currently have in stock. You can save yourself the trip, until the price is reached that is in alignment with what is available and how much demand is currently occuring, or what you are willing to pay.”

              Or the question could become: Why in the hell aren’t you ordering one online already???

              “As for the state of the economy, if people are that incredibly poor, they probably shouldn’t be buying an ipad or anything electronic if it is keeping them from paying bills or putting food on the table. Waiting online for a delivery really should be no different than waiting for the price of the ipad to drop as supply becomes available.”

              It’s not the matter of not being able to pay your bills or put food on the table.. It’s a matter of stretching your dollar for as much as it’s worth. Increasing prices of entertainment / computer devices will not improve Apple’s image in any conceivable form in this economic market, and will only keep their product out of reach. The REAL answer would be to increase the production of iPad 2’s which you never mention as a possible option (if that is something Apple can do now or in the future.) Increasing the price to lower the price later will give reviewers and lame blog writers the availability to distort pricing in their comments long after Apple has resolved and lowered the price of the iPad which is at the price it was intended to and should be.

              If waiting for the price drop is the same as waiting for delivery, the best option is already available by clicking “order” online.

              “Shifting sales online doesn’t magically or mysteriously solve the issue with high demand and low supply, especially with world turmoil and turblance that will inevitably be disrupting supply and availability. It is very probable that it goes from weeks to months. Keeping the price low will only make the supply that much more scarce and the wait that much longer.”

              This is a prediction on the future on your part and has no proven basis with determined facts from Apple or anyone else with the required integrity to make such statements. Your guesstimates of the future don’t make your guesses facts. I’d rather wait to hear what Apple says on the matter, since they are the ones that actually know how their production is running. You, sir, have no clue.

              “As for the competitors of the ipad? I think many of them are happy to see people going to stores and getting disgruntled that ipads are no where to be found. It would be interesting to see statistics of people who get fed up and buy xooms and touchpads out of disgust and unhappiness with the way Apple is treating customers.”

              Apple is trying the best that they can to help these customers get what they want. LOL regarding people wanting that Xoom. That’s just silly BS. Honestly, that seems so far from reality it cracks me up. No smart consumer with common sense is going to buy that Xoom, or any of the alternatives that are out there (there aren’t any.)

              Like I said, the iPad 2 rocks and it shows (hehehe!)

            7. “Nonsense. The iPad is priced appropriately given the price points of Apple’s other products.”
              Apparently not, with the amount of demand outstripping supply, they obviously have the price set too LOW…

              “Or the question could become: Why in the hell aren’t you ordering one online already???”
              Ordering online only shifts demand from brick and mortar stores to online, it doesn’t magically increase supply… The problems of obnoxiously long wait times and non existent supply at physical stores still exist…

              “It’s not the matter of not being able to pay your bills or put food on the table.. It’s a matter of stretching your dollar for as much as it’s worth. Increasing prices of entertainment / computer devices will not improve Apple’s image in any conceivable form in this economic market, and will only keep their product out of reach. The REAL answer would be to increase the production of iPad 2′s which you never mention as a possible option (if that is something Apple can do now or in the future.) Increasing the price to lower the price later will give reviewers and lame blog writers the availability to distort pricing in their comments long after Apple has resolved and lowered the price of the iPad which is at the price it was intended to and should be.”
              Apple’s products are already out of reach. They already have demand that outstrips supply. Increasing price is the only way to accommodate the mismatch of demand to supply. As for increasing production, that is another benefit of higher prices, is that the extra money they gain from the higher prices can actually be used to BOOST production…

              “This is a prediction on the future on your part and has no proven basis with determined facts from Apple or anyone else with the required integrity to make such statements. Your guesstimates of the future don’t make your guesses facts. I’d rather wait to hear what Apple says on the matter, since they are the ones that actually know how their production is running. You, sir, have no clue.”
              Oh yeah, no major earth shaking event just happened, nothing to see there. There can’t possibly be any effect on supply, no sir. Time will tell who is actually right. Based on increasing delivery times online, and little to no supply at local stores, it looks like this is already a reality…

              “Apple is trying the best that they can to help these customers get what they want. LOL regarding people wanting that Xoom. That’s just silly BS. Honestly, that seems so far from reality it cracks me up. No smart consumer with common sense is going to buy that Xoom, or any of the alternatives that are out there (there aren’t any.)”
              I never said people set out with the intention of getting a xoom or touchpad, but when you buy a product you are doing more than just buying the product, you are voting with your money for the way the company treats its customers, and I have a feeling a great many people are disillusioned by Apple’s arrogance and stupidity in the way they are dealing with the demand for the Ipad…

            8. “Apparently not, with the amount of demand outstripping supply, they obviously have the price set too LOW…”

              They have the perfect price points given the popularity of the product. The iPad 2 is a hot item that no competitor can match and their price helps them continue their dominance in this tablet market which they have created.

              “Ordering online only shifts demand from brick and mortar stores to online, it doesn’t magically increase supply… The problems of obnoxiously long wait times and non existent supply at physical stores still exist…”

              Patience is a virtue. Ordering online allows you to bypass that long line at a store, making it a non-issue for ya.

              “Apple’s products are already out of reach. They already have demand that outstrips supply. Increasing price is the only way to accommodate the mismatch of demand to supply. As for increasing production, that is another benefit of higher prices, is that the extra money they gain from the higher prices can actually be used to BOOST production…”

              Time, and only time, will accomodate the large amount of customers excited about this product. Apple doesn’t need more money to boost production (they are doing quite fine in that area thank you very much lol!)

              “Oh yeah, no major earth shaking event just happened, nothing to see there. There can’t possibly be any effect on supply, no sir. Time will tell who is actually right. Based on increasing delivery times online, and little to no supply at local stores, it looks like this is already a reality…

              Your correct sentence in that snippet was “time will only tell who is actually right.” The rest is unneeded verbage with no actual concrete facts to base it on. You are not Apple and therefore have no clue on the matter. (I don’t either.) Let’s see what Apple says on the matter first.. how about that? You are trying to put two and two together when all you have is speculation at best.

              “I never said people set out with the intention of getting a xoom or touchpad, but when you buy a product you are doing more than just buying the product, you are voting with your money for the way the company treats its customers, and I have a feeling a great many people are disillusioned by Apple’s arrogance and stupidity in the way they are dealing with the demand for the Ipad…”

              Apple has been shown to have the best customer satisfaction of ANY computer company. You don’t get that achievement by not being caring to the customers it tends to. Don’t let this amazing demand of the iPad 2 veil your eyes to that. From the operating system to it’s products and customer service, it’s very obvious that Apple cares about it’s customers. Demand is simply crazy for this product, lol! Sooner or (more probably) later, Apple will meet with the demand for the iPad 2. When that happens, the delight of everyone will be met. Once again, patience is a virtue. Keep in mind that before all these computers and gizmos, people were still alive and happy. The wait will only make receiving this phenomenal product a happy part of your life. When you get your hands on one, you will see how much Apple cares about it’s customers.

              How much did your impatience cost you Joe?

            9. “They have the perfect price points given the popularity of the product. The iPad 2 is a hot item that no competitor can match and their price helps them continue their dominance in this tablet market which they have created.”
              Their price helps them to irritate customers by having it too LOW and having too little supply

              “Patience is a virtue. Ordering online allows you to bypass that long line at a store, making it a non-issue for ya.”
              The issue isn’t only the long line, the issue is if I go to the store I expect supply. With normal supply/demand processes in place, there would be supply, but Apple thinks it knows better, and is obviously failing.

              “Time, and only time, will accomodate the large amount of customers excited about this product. Apple doesn’t need more money to boost production (they are doing quite fine in that area thank you very much lol!)”
              Time, as in, if apple makes people wait long enough, they will give up and demand will drop by loss of interest, and/or frustration and aggravation that drives them to competitors. As for doing quite fine with regards to production, on what planet are you living on. They absolutely are doing TERRIBLE with regards to meeting demand… Too low of a price, not enough supply. How would anyone consider that a success?

              “Your correct sentence in that snippet was “time will only tell who is actually right.” The rest is unneeded verbage with no actual concrete facts to base it on. You are not Apple and therefore have no clue on the matter. (I don’t either.) Let’s see what Apple says on the matter first.. how about that? You are trying to put two and two together when all you have is speculation at best.”
              We will see, I still think you are wrong…
              http://news.cnet.com/8301-1001_3-20044042-92.html

              “Apple has been shown to have the best customer satisfaction of ANY computer company. You don’t get that achievement by not being caring to the customers it tends to. Don’t let this amazing demand of the iPad 2 veil your eyes to that. From the operating system to it’s products and customer service, it’s very obvious that Apple cares about it’s customers. Demand is simply crazy for this product, lol! Sooner or (more probably) later, Apple will meet with the demand for the iPad 2. When that happens, the delight of everyone will be met. Once again, patience is a virtue. Keep in mind that before all these computers and gizmos, people were still alive and happy. The wait will only make receiving this phenomenal product a happy part of your life. When you get your hands on one, you will see how much Apple cares about it’s customers.”
              Part of overall experience is having product to meet demand, had Apple priced their products appropriately, I think they would have more product available in stores, with a wider selection, less demand, lower lines, and happier customers overall. Just as happens in every other market where price is dictated by supply and demand.

              “How much did your impatience cost you Joe?”
              Definitely not 4 weeks of waiting, or hours and hours of mindless Apple employee babble about how they don’t have anything in the store, because of a stupid corporate policy that doesn’t allow the price to scale with the demand and available supply…

            10. “Their price helps them to irritate customers by having it too LOW and having too little supply”

              Patience is a virtue. LOL!

              “The issue isn’t only the long line, the issue is if I go to the store I expect supply. With normal supply/demand processes in place, there would be supply, but Apple thinks it knows better, and is obviously failing.”

              It hasn’t even been a week! LOL! Geez.. give it some time buddy!

              “As for doing quite fine with regards to production, on what planet are you living on. They absolutely are doing TERRIBLE with regards to meeting demand… Too low of a price, not enough supply. How would anyone consider that a success?”

              You read my comment out of context… I said:
              “Apple doesn’t need more money to boost production (they are doing quite fine in that area thank you very much lol!)”
              What I was inferring to was that Apple has deep deep pockets full of dough… they don’t NEED to increase prices to ramp up production. They already have the money because of their successes. Please don’t skew my words.

              “We will see, I still think you are wrong…” (regarding production issues in Japan)

              If you look back, all I said there is to wait for Apple to state facts on the matter because it’s speculation otherwise. That fact will stand either way, so I am not wrong and will never be. (lol)

              “Part of overall experience is having product to meet demand, had Apple priced their products appropriately, I think they would have more product available in stores, with a wider selection, less demand, lower lines, and happier customers overall. Just as happens in every other market where price is dictated by supply and demand.”

              Once again, patience is a virtue… and iPad 2 hasn’t even been out a week. I think we’re coming full circle here hehehe.

              How much did your patience cost you in terms of US monetary dollars, Joe? Anything beyond this information is useless to me since I already know your stance on matters.

            11. Yes, we are going in circles, you are dragging me down to your level, and beating me with experience… I have better things to do than to listen to excuse after excuse for Apple’s mediocrity with regards to price and meeting demand… Have fun waiting.

      1. One thing is FOR SURE: Joe and correctu need to write posts that are MUCH LONGER. And those who don’t have their iPad 2s should know that they can, and probably will, survive for a few more days or weeks until they get theirs. And NEXT TIME, why not order online the minute they become available. DUH.

        1. It is weird how people can be so boisterous about how great Apple’s products are, but then tolerate mediocrity in the way they meet demand. Quite ironic. Oh, btw, I’m writing this from my ipad2. Which is more than I can say about the poor people standing in front of the Apple store this morning, or the poor people who will be waiting a month before they get their’s online. Hopefully Apple gets enough complaints about this fiasco that they learn how flawed their current model actually is.

          1. LOL!…. IT’S ONLY BEEN A FRICKEN’ WEEK! Give it a rest. Patience is a virtue. No need for a frenzy it’s not a fricken beanie baby.

            Try to breathe a bit and relax.

            Apple is more than happy to serve you when they can fricken get to it, lol.

    2. Joe, if you knew anything about supply and demand, you’d know that you just can’t shift and entire demand curve. The only thing raising the price would do would bring it more in line with where the supply and demand curves currently intersect.

      Essentially, you won’t CHANGE demand… you’ll only change the quantity demanded. And yes, there is a difference.

  4. Lines come with the territory, I had my fill after today. Friday was interesting as I have not ” line sat” for probably 15 years, just showed me what was actually happening……..saw the same people there this morning who walked out with iPads Friday two at a time……..to resell over seas. Ordered online and will wait, I’ve waited this long what’s another month?

    1. That would really help with the line jumpers and those who tried to save a spot for someone coming later on. Nearly had a riot this morning when a guy shows up after many had been there for hours and goes to about the tenth spot with his friend.

  5. While the laws of supply and demand don’t vary, there are nevertheless differences between retail of a product like the ipad and the wholesale of a pure commodity, like grain.

  6. This is what’s wrong with America. People are dying in Japan and all we are worried about is the iPad2 availability. People that wait in line for ipad returning without one and getting utterly MAD and attacking Apple staff, and then we have people lost their homes in a Disaster that show more respect to each other you can ever imagine.

    1. Thanks @Frudal, for bringing things into perspective. I can’t believe how people can get so uptight and upset over a new product launch, as if it’s their right to walk straight into the store and pick one up off the shelf. Honestly if there are queues or shortages of stock, WAIT! This isn’t a life or death situation, compared to many of the current world events, which are truly heartbreaking.

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