iPad 2 Lines Persist, Supply Chain Is Key

March 16, 2011

Demand for the new iPad 2 continues to be strong at Apple U.S. retail stores, in some cases from buyers hoping to resell the tablets for a profit, prompting Apple to modify its usual straight-to-shelf supply chain to better manage inventory. According to reports, factories in China are turning out iPads on a 24-hour basis, and finished units are being flown directly to the United States and trucked to Apple stores. In some cases, the supply chain extends just 24 hours from factory to store. However, according to the AppleInsider Web site, those tablets have not been immediately being sold to customers over the past three days. Instead, the supply delivered to stores on Monday was held so the store staffs could better count their supply of iPads and plan their sales procedures. To account for having no iPads, store managers were told to simply tell potential buyers that no shipment had been received. When the stores did begin selling, the New York Post reports that up to 200 scalpers were in line at the Fifth Avenue (NYC) store, openly supplied with money from a “leader” who stood beside a large bag of purchased iPads. One leader told a reporter the top model of iPad could sell for up to $2,000 in China. A similar line appeared at the San Francisco stores when the iPad debuted, reportedly to supply sellers in Hong Kong. The iPhone 4 debut in China last year also generated long lines of resellers until Apple instituted purchase limits, buyer identification and iPhone registration requirements.

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{ 8 comments… read them below or add one }

AS March 16, 2011 at 1430

Meanwhile, the guy who works for a living, who has a job to go to and be at and can’t spend all day in line waiting, waiting, waiting, can’t get one. I’m a developer and I still have yet to get one… I put an order in on Apple’s site but shipping time was 2-3 weeks by time I got it in so I am keeping my eyes open for one locally so I can cancel that order. It’s hard to develop apps for something you can’t even get your hands on. Apple should allow for pre-sale through their ADC store and give the developers first crack at them. What about online ordering for in-store pickup? Make that the only way you can buy the products, then you can limit the sale per-person to 1 very easily. They have to be bought online and if you’ve already purchased one, you can’t buy another one for say…. 30 days?


Fred March 17, 2011 at 1346

Proper Prior Planning Prevents Piss Poor Performance. If your business hinged on you being able to develop apps for iPad 2, seems like you screwed up, not Apple. And honestly, I don’t see this as Apple’s issue to address, they only sell the things, and while yes it is unfair, life often is. Buck up.


Banana March 17, 2011 at 2245

If your business depends that much on it, buy one from a re-seller or pay somebody to stand in line.


George March 22, 2011 at 2118

Don’t worry about developing for the iPad, it’s so popular that nobody can get one


Mike Kaufmann March 16, 2011 at 1733

I was able to get a Verizon model at the Los Gatos Store at 9AM today. 3!16/11. It took about 2 hours line wait and for setting up the unit. There were about 15 people there and we were told the Verizon model was the only one available. About half the people left hearing this. Nice iPad! Quick!


Actual Apple Employee March 16, 2011 at 2052

Apple insider is implying that we are just lying to the customers. But what those twerps don’t get is that we don’t just take the boxes from the delivery guy cut them open and hand them over.

When a delivery arrives the receivers have to break down the pallets, sort everything by the PO numbers on the boxes, input each PO into a computer system to pull up the items that are supposed to be there, verify that everything is there and then confirm the items as ‘received’. There can be literally dozens of POs. Even if they start with the ones that have ipad boxes it still takes time. And the ipads are tripled boxed which means more time to unpack them and have them ready to hand over to a customer.

Not only that, not just anyone can do that receiving in the computer system. There’s only a handful of people (sometimes only one at many stores) that can access that system and pull that information. And that person is often there only from like 6am to 3 pm. Some of the malls won’t let them show up any earlier. So when they say they didn’t receive any until the morning that is very possibly the truth. But the staff aren’t allowed to say “well yeah we got a delivery and there are probably ipads in it but we can’t see them until tomorrow when our receiving manager is here” because that is basically saying “please come rob us tonight”. Although at most stores, the staff can’t get into the receiving room (which is passcode locked so only the receiving crew and managers can go in) so they actually don’t know what is in the shipments (which arrive on pallets that stay wrapped until they are in the locked area) until the receiving manager hands the sales manager the info.


Actual *Former* Employee March 17, 2011 at 0538

Yep. And yep. Although, now they’re triple boxed? I’m sure BOH loves that. Original iPad eventually became double-boxed, and that made things much easier on them. (At least at the end of our chain, they did. They were super easy to count (five per box) and super easy to manage. (Open one box, remove five iPads. Break down box. Done!)

I must say that as a former employee, I have to applaud their decision to wait after a shipment. The chaos that came with “OMG we haz more iPads!” was ridiculous. One minute, I would tell someone that we were sold out, then the next minute I’d hear over the walkie that we had them! Start selling! It made things completely arbitrary and most times, no one knew what was going on. Multiple times a day I’d see specialists who were uninformed giving incorrect information on inventory levels. It was an extremely frustrating experience for both us AND the customer. It basically said to the customer, “I sure hope you show up in the right 30-minute block of time that we have them, because that’s how random it’s going to be!”


Patrick March 25, 2011 at 1255

Walked past the Apple Store at Opéra, Paris. There must have been at least 500 people in line; incredible turnout and huge buzz. This is not a normal company’s product launch. While for many people in the city there will be low awareness of the launch today, a certain subset are hugely excited. It’s impressive.


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