iPhone Shortage, a Problem or Strategy

Reader Doug sent me a a very kind note, and in that note asked me to comment on the recently reported iPhone shortage at Apple stores around the country. Let me preface this with the fact that I'm not an analysts like many well known pros, who have tremendous resources and industry insiders to talk to. And it's clear everyone of these analysts have an opinion, and those opinions are as varied as can be.

Some believe it's an accounting thing, that Apple makes sure that AT&T stores are fully stocked because every iPhone they supply there is accounted as a sale, where every iPhone in an Apple Store is accounted as an iPhone in stock.

Other analysts, like Gene Munster of Piper Jaffray, think the shortage is an imminent sign that Apple will soon be shipping the 3G. And that they're clearing shelves to make room for it. This is supported by the story I reported on the other day about a source that claimed 3G iPhones a ready to ship.

The third theory is that the shortage is due to Apple production blunders. And that Apple was simply the victim of manufacturing snafus and poor planning. At least that's how Apple specialist Toni Sacconaghi of Sanford Bernstein sees it, as reported by the Fortune 2.0 Blog.

I tend to put some credence in Toni Sacconaghi analysis, but I'm not so sure that's the whole story. I think it's a more fundamental reason. Apple can't keep iPhones on the shelf because consumers simply recognize that the best place to buy an iPhone is at an Apple store, and it's the reason I bought two iPhones at my local Apple Store. The experience is simply superior. You go in tell them you want an iPhone, they take your order on a remote handheld device, bag it, and your out in three minutes tops.


If you've ever gone into an AT&T or Verizon store, the experience is quite different. The moment you enter the store, you're attacked by a greeter that takes your name, the greeter interrogates you, puts you on a list, and you wait for ever before a greasy sales guy saunters over to take your order. That guy will probably try and talk you out of the iPhone if there's a Sales spiff that puts a few more dollars in his pocket. He could care less what you really want. Then you are directed to stand in line and wait some more.

In my opinion, iPhone shortages at Apple stores are because demand is increasing beyond what Apple had expected, and people are far more inclined to go to their local Apple Store for the experience they want, rather than go to a vipers pit for an experience they would rather avoid.

-zach bass