Not Enough iPad 2 Units to Go Around?

Apple (AAPL) routinely releases new products with insufficient inventory to keep up with demand. This happened when the iPhone 4 debuted on the Verizon Wireless network last month. Phones available via the cellular company's website ran out in a day. And when the first iPad was released in March 2010, supplies were also too low for demand.

Rumors are already circulating that the supplies of the new iPad 2 -- set to be released on March 2, according to many media reports -- will be well below anticipated market demand as well. Does Apple simply produce too few units of a new product, or is the company plagued by supply-chain-management issues? This debate seems to come up with each new product launch.

Apple Insider reports that "Production issues with new thin display could limit Apple's initial iPad 2 supply." The problem may be due to manufacturing or parts for the screen on the thinner tablet. The report also warned that supply chains from Asia could face problems as they ramp up production.

Apple may run into trouble that it didn't have to worry about when the first iPad was released: Consumers now have plenty of tablet computer alternatives if they don't want to wait for the iPad 2. Motorola (MMI) recently began selling its Xoom tablet. Samsung's Galaxy has been out for a while already. Lenovo is expected to release its tablet this month. And most other large computer makers plan to launch their own tablets in the first half of this year.

Apple's iPad 2 inventory problems -- if they really exist -- may cost the company sales this time because the market is now full of competitors.

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March 02 2011 at 12:32 PM Report abuse rate up rate down Reply

unlikely there is some evil conspiracy to push desire. hell, people already can't live without one. if apple could put 2 million of them out the door at
$800 a pop, or whatever the price, with the lines not ending until the last one was sold, that is what they would do. not a large amount of pad purchasers are going to buy competing products. those products are 1 trick pony's and will not be updated and improved like everyone knows apple will do with the ipad. the few that might buy the other products were halfway there decision wise whether they could get their hands on a ipad2 or not. in the meantime, why would apple sit on whatever inventory they have waiting until they have enough for world wide demand?
get real.

March 01 2011 at 4:56 PM Report abuse rate up rate down Reply
Bob Weiland

1. The iPad 2 will not likely launch on the announcement day. It will probably take a week or two in order to hit stores.

2. I don't believe that short supplies upon launch will turn a lot of people away from the iPad 2. People that have been waiting for the iPad 2 will not suddenly go with a competing product. The only way that this will impact the iPad 2 sales is if the price also increases based off their first launch. If Apple keeps the price point the same, there is no worry about losing lots of sales over low initial supplies.

In fact, it's beneficial for Apple to launch with lower supply than demand. This allows for coverage of short supplies and emphasizes buyer demand, which is then reported on in the media. This adds more publicity and desire for the product (even one people have to wait a few more weeks to get). It's a smart business strategy and while it may impact some initial weekend sales, it likely increases sales over the long term.

March 01 2011 at 1:11 PM Report abuse rate up rate down Reply
1 reply to Bob Weiland's comment

Bob i agree analysts always predict doom,,,,apple has done this many times with plenty of free coverage good job using anal-ysts, apple love it

March 02 2011 at 1:07 AM Report abuse rate up rate down Reply