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skeechan
Ai Otsukaholic
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join:2012-01-26
AA169|170

skeechan to Nezmo

Premium Member

to Nezmo

Re: Damn Man - iPhone is on a Roll!

The only benefit to artificial scarcity is to raise the price. The price is what is regardless of supply which is why there is a shortage. With artificial supply, the only benefit would be from a new equilibrium price, much higher than under normal conditions. You would thus have no shortage but the phones would be selling for $1500 each instead of $700.

Your claim of artificial scarcity has no basis in fact nor logic. Apple would be leaving tens to hundreds of millions on the table with artificial scarcity at the current price.

Publicity is meaningless if you are promoting a product you are restricting the supply of. Great, people want it, and can't buy it. That isn't smart marketing and no one at Apple is that stupid. Apple is the marketing benchmark.

There is zero intention of limiting supply. No conspiracy. No black helicopters.

Nezmo
The name's Bond. James Bond.
MVM
join:2004-11-10
Coppell, TX

Nezmo

MVM

said by skeechan:

The only benefit to artificial scarcity is to raise the price. The price is what is regardless of supply. Your claim of artificial scarcity has no basis in fact nor logic. Apple would be leaving tens to hundreds of millions on the table with artificial scarcity at the current price.
...

And what is your proof that Apple is leaving "tens to hundreds of millions on the table." Like me, you are speculating. We can agree to disagree but your comments are just like mine - an opinion.

For the record, I don't wear a tin foil hat like most around here. I just have common sense and a good feeling when I'm being snowed.

This is just like the planned leaks Apple does prior to a launch. That's how you create a buzz. Like you said, Apple is the marketing benchmark.

skeechan
Ai Otsukaholic
Premium Member
join:2012-01-26
AA169|170

skeechan

Premium Member

It's not opinion, it's first semester economics. There are substitutes in this market as the gShills continuously point out. Delays in availability result in lost sales. Not everyone is willing to wait 3-4 weeks and the longer they wait the less likely they are to impulse buy and more likely to comparison shop both leading to lost sales.

If Apple could have had 10M units in the channel they would have done it. Foxconn simply couldn't do it with their production lines.

There is nothing to be gained from a shortage and everything to lose. The longer the delay the more lost sales as mentioned. The more lost sales the more lost sales from complementary items such as cables and apps.

They try to start early enough to get product into the channel and Foxconn simply couldn't do it. Foxconn gives their production estimates so Apple schedules their releases based on that. When Foxconn drops the ball Apple is stuck with shortages and a choice to delay foreign release of the product to keep channel inventory for the US. Beyond that, they simply have to wait for Foxconn to catch up.

No one is planning ahead of time..."let's limit supply to ensure a 3-4 week backlog for weeks on end while maintaining the same price". No one is that dumb.

Nezmo
The name's Bond. James Bond.
MVM
join:2004-11-10
Coppell, TX

Nezmo

MVM

So you know FC says when they'll be ready and apple follows? You don't think Apple tells them when to be ready? Which is it? I have no proof either way but I suspect the latter.

The gain to be had from this tactic is to create more demand. Apple does not have to worry about the crowd that will buy the product even if they have to wait weeks because they will wait regardless (eg, the folks you see saying I'll buy it before specs are out, etc). What they care about are those on the fence. And the latter won't go elsewhere as Apple is careful not to delay supply too long and many see the 'sold out' as "dang, it must be fanstastic so I'll wait and buy it."

You said it, Apple are master marketeers. I think the production issues at FC are real (BTW, the employing 14-year olds is disgusting if true) but that is only part of the picture in my opinion.

BTW, what is a gShill?

skeechan
Ai Otsukaholic
Premium Member
join:2012-01-26
AA169|170

4 edits

skeechan

Premium Member

Of course Apple works out the schedule but when Foxconn has an unforeseen problem, S goes south.

There is no gain from artificial scarcity. All buyers won't wait regardless and competitors will respond accordingly with their substitutes (the next big thing is already here).

If Foxconn could have delivered 10M units first week, Apple would have been much happier. No one desires shortage except for Apple's competitors. Master marketers work day and night to ensure EVERY buyer can get the devices (place strategy). FYI, marketing isn't just advertising, it's the entire process of identifying and filling wants...fulfilling wants being the ultimate goal.

Think about it...what would have been better for Apple...5M unit sell out and 3-4 week backlogs, or 10M in first week sales and a 1 week ongoing backlog for 2 weeks followed by no backlog (supply matches demand). Obviously it is the latter.

What you are suggesting would work for "limited edition" items. Say Apple initially released a limited edition iPhone for $1500, 2 months before general availability. Artificial scarcity supports the high price, gouging those who MUST have it now. But there is no benefit from keeping the price low and just having shortages. There is no marketing benefit.

It's like Ray Ban. Ray Ban was available everywhere for $30 until Ray Ban was bought by Luxottica. They took Ray Ban off the market for about a year and reintroduced them with artificial scarcity and again Ray Bans are $100+. The benefit is from raising the price. It wouldn't make sense to have artificial scarcity while still charging $30 bucks. Even if the intent is to build exclusivity into the brand, the benefit isn't the exclusivity, it's the higher price that exclusivity can command. Yet Apple isn't making an attempt to reprice the iPhone based on this exclusivity. It's the same $200-$400 like everything else.

dirtyjeffer0
Posers don't use avatars.
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join:2002-02-21
London, ON

dirtyjeffer0 to skeechan

Premium Member

to skeechan
said by skeechan:

It's not opinion, it's first semester economics. There are substitutes in this market as the gShills continuously point out. Delays in availability result in lost sales. Not everyone is willing to wait 3-4 weeks and the longer they wait the less likely they are to impulse buy and more likely to comparison shop both leading to lost sales.

If Apple could have had 10M units in the channel they would have done it. Foxconn simply couldn't do it with their production lines.

There is nothing to be gained from a shortage and everything to lose. The longer the delay the more lost sales as mentioned. The more lost sales the more lost sales from complementary items such as cables and apps.

They try to start early enough to get product into the channel and Foxconn simply couldn't do it. Foxconn gives their production estimates so Apple schedules their releases based on that. When Foxconn drops the ball Apple is stuck with shortages and a choice to delay foreign release of the product to keep channel inventory for the US. Beyond that, they simply have to wait for Foxconn to catch up.

No one is planning ahead of time..."let's limit supply to ensure a 3-4 week backlog for weeks on end while maintaining the same price". No one is that dumb.

QFT.

ptrowski
Got Helix?
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join:2005-03-14
Woodstock, CT

ptrowski to skeechan

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to skeechan
We all speculate so no one knows for sure, but apple does love to hype the "can't keep up with demand" pat on the back all the time. One or two releases, maybe. They also know that people will wait for the phone and a small percentage will find something else. Apple fans can be loyal to a fault, so having an artificial scarcity does work. Apple could easily find other companies willing to build plants, lines etc to manufacture for them. It's a gold mine.

skeechan
Ai Otsukaholic
Premium Member
join:2012-01-26
AA169|170

1 recommendation

skeechan

Premium Member

There is no way on earth that Tim Cook, an expert in supply chain, takes any pride in Apple not being able to deliver product. There is no hype from being sold out only bad PR from not being able to deliver product. The hype is people lined up around the corner...not from walking out empty handed. And with limited devices in the supply chain, there is no in store traffic from it (where users can be upsold) and no impulse buying.

There is ZERO benefit from artificial scarcity when you don't raise the price and in that case there is negative benefit both in lost primary sales and lost sales on the complementary goods.

Apple fans will buy it whether it is scarce or not. No hype. Non-Apple fans will go elsewhere rather than wait. No hype.

Again, there is no benefit unless they raise the price. When they leave price where it is, they simply leave money on the table if they induce artificial scarcity.

Mike
Mod
join:2000-09-17
Pittsburgh, PA

1 recommendation

Mike

Mod

Yeah there is.

Hype.

If you have a rare product that is supposed to be amazing, people are going to fiend over it.

It's a lot better if people are going crazy over limited supply than having a store full of retail boxes.

bbarrera
MVM
join:2000-10-23
Sacramento, CA

1 recommendation

bbarrera

MVM

This is just nutty. Wall Street Journal quotes Foxconn rep ""the most difficult device that Foxconn has ever assembled." Apple sells more in the opening weekend than any other cellphone launch, by far. Yet on this thread we are too believe they are artificially limiting production. Come on, its not like anyone is capable of mass producing phones on the scale of say M&M's candy at over 400 million a day. Get real people.

skeechan
Ai Otsukaholic
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join:2012-01-26
AA169|170

4 edits

skeechan to Mike

Premium Member

to Mike
There is no benefit to "hype" in itself. Benefit comes from revenues. You don't hype a product you are already selling out of. You make as many of the damn things as you can and get them to market. Anyone think they need to sell out in order to hype an iPhone. It's the most overhyped device on the planet...long before release day. Apple doesn't need to scheme artificial scarcity to promote their device.

No units = no revenues. No units /= hype. No units = lost sales. NO ONE is surprised by a first week sell out. There is ZERO hype from a first week sell out, or a second week sell out. By the 3rd week it is simply frustration.

You would be right if the few units that were available were selling for $1500 per...then sure, there is the benefit to artificial scarcity.

No one is going "crazy". They simply walk out of the store empty handed or with an S3 box in a bag.

Boxes sitting in retail doesn't mean anything. Turnover does. You can have shelves full of boxes if you have high inventory turnover. It's infinitely better to have boxes in retail than zero boxes in retail.
The former means revenue, the latter doesn't.

Mike
Mod
join:2000-09-17
Pittsburgh, PA
·Verizon FiOS

Mike

Mod

If you're in the Apple system, why would you leave? Someone handed me an iPad mini.. uh I mean a S3 today and it's half phone half kindle. Too big.

Theres your reality distortion field in effect.

If you have a predictable base that can only grow, then your stock price is going to be insane.

skeechan
Ai Otsukaholic
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join:2012-01-26
AA169|170

1 edit

skeechan

Premium Member

There are lots of reasons not to buy Apple products, particularly if you don't run Macs. And the S3 isn't the only competing phone. There are the new Windows phones rolling out, certainly lots of new ICS/JB phones like the newest Razr HD Maxx with crazy battery life, something like 20 hours and the Photon; a slider with a "real" keyboard.

If you are in a Windows world, migrating away from iOS to Android or WP8 can be compelling. I have friends who see no real difference between Android and iOS because they just use it for phone/text/browse/email so to them it is whatever they get a deal on.

If I didn't use Macs, I wouldn't use an iPhone. If I was using Windows on all of my desktops, I'd be on board with the Lumia 900.
itguy05
join:2005-06-17
Carlisle, PA

itguy05

Member

said by skeechan:

If I didn't use Macs, I wouldn't use an iPhone. If I was using Windows on all of my desktops, I'd be on board with the Lumia 900.

Why? The UI is pretty nasty and ugly. The apps are not there and it doesn't integrate any better than iOS on Windows. Apple does an OK job integrating with the PC, better than Android but nowhere near what they do on Macs. But with the push with iCloud they are making that irrelevant anyway.

I wouldn't wish Windows and Metro on my worst enemy. It's that nasty.

skeechan
Ai Otsukaholic
Premium Member
join:2012-01-26
AA169|170

skeechan

Premium Member

Integration.

Count Zero
Premium Member
join:2007-01-18
Milton, FL

Count Zero

Premium Member

I don't think integration is a big problem anymore. Syncing isn't a common activity anymore but iTunes on windows works as well as OS X's version. They also have an iCloud control panel to manage other aspects of integration.

darcilicious
Cyber Librarian
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join:2001-01-02
Forest Grove, OR
·Ziply Fiber

darcilicious

Premium Member

said by Count Zero:

iTunes on windows works as well as OS X's version.

Which can't be saying much, can it?

skeechan
Ai Otsukaholic
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join:2012-01-26
AA169|170

skeechan to Count Zero

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to Count Zero
It is for me. I like stuff to just work and work together. I like the potential of Windows 8 + WP8 + XBOX 360.
skeechan

1 recommendation

skeechan to darcilicious

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to darcilicious
Best music library management utility I've ever seen or used on any platform. Combined with iTunes match it's awesome.

Count Zero
Premium Member
join:2007-01-18
Milton, FL

Count Zero

Premium Member

Agree. iTunes works very well for me for managing, organizing, streaming and sharing my 16,000 song library. It's just RAM hungry - but RAM is thankfully cheaper these days.
Count Zero

Count Zero to skeechan

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to skeechan
Versus the OS X + iOS + appleTV. Gotcha. Can't really comment since I never really used the Xbox for streaming.

skeechan
Ai Otsukaholic
Premium Member
join:2012-01-26
AA169|170

skeechan

Premium Member

Exactly...imagine an AppleTV with apps, with some sort of controller. It would be a great bottom tier game machine to compete with the original Wii (the $99 price point). I think it would bring AppleTV into the mainstream, being a game platform. I think that would do better to spur sales that trying to make it a DVR or set top streaming cable box.

Play a game on the XBOX360, then take that game with you on a high end Windows 8 phone (making WP8 a real competitor to PS Vita). Have a Microsoft version of Airplay to stream content from a WP8 to any XBOX 360, so you could hit a friend's house with a movie and watch it on their TV, etc.
skeechan

skeechan to Count Zero

Premium Member

to Count Zero
I leave my iTunes open and running on my Mac Pro (which serves my iTunes media) 24/7 and it's sitting at around 260MB out of the 16GB in the machine. I just opened a SINGLE browser window in Windows XP to DSLR and it's taking up 55MB. Open a Google Maps tab and that jumps to 80MB. I closed the google maps tab and RAM usage for IE actually jumped to 82MB. Dropbox on that machine is running at 80MB too.

I see similar high usage from any advanced programs handling a lot of data (Filemaker, Quickbooks, etc) on both OS X and Windows.

Thinkdiff
MVM,
join:2001-08-07
Bronx, NY

Thinkdiff

MVM,

I haven't worried about how much RAM something is using in over a year. A modern computer with 8+GB RAM and a fast SSD will do that, I suppose.

Count Zero
Premium Member
join:2007-01-18
Milton, FL

Count Zero to skeechan

Premium Member

to skeechan
Well I don't play any video games so its all meh to me!

Though ill probably buy halo 4 later.
Count Zero

1 edit

Count Zero to Thinkdiff

Premium Member

to Thinkdiff
Indeed.

I think a lot of iTunes bad press comes from when people typically had less RAM and iTunes didn't perform well.

Nezmo
The name's Bond. James Bond.
MVM
join:2004-11-10
Coppell, TX

Nezmo

MVM

said by Count Zero:

Indeed.

I think a lot of iTunes bad press comes from when people typically had less RAM and iTunes didn't perform well.

That would be me. I have a 32bit Windows machine. Other than the issue it can't address more than about 3.3GB of RAM (I have 4GB in it) it's a fast quad core machine. But I admit it's now dated. It handles everything I need great (including heavy-duty video encoding) except iTunes which blows chunks to be honest.

I either need to update my main machine or get something like a Mini to act as an iTunes server.