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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