What is one thing that the executives of Google, Nintendo, Apple, Sony and Amazon all have in common? They have all sold out. That’s right, at one time or another, the leadership of these technology and marketing juggernauts managed to let supplies of their biggest, most popular products completely run out. The voids left by their shortsightedness are typically filled with upset customers, speculative news articles about the reasons behind the shortage, and even conspiracy theories about manipulated supply chains.
Most of the time, the shortage happens during the launch of a much-anticipated new product. Sometimes that launch coincides with the Christmas buying season. This happens a lot with video game consoles.
Whenever it happens, a happy spin is typically put on the shortage. Announcements that accompany the empty shelves (whether virtual or physical) almost universally proclaim that demand for the coveted item far out-paced predictions — it was just that good, the company spin machines say.
The most recent example of this phenomenon is Google Glass. On April 15 the California company launched a one-day sale of its new high-tech spectacles for the whopping price of $1,500. As of the morning of April 16, Google proclaimed it had shot through its entire supply of the current version of the glasses it dubbed “Explorer.”
Here is what a company spokesperson said:
“We were getting through our stock faster than we expected, so we decided to shut the store down. While you can still access the site, Glass will be marked as sold out. We are leaving the site open so Explorers can still get any accessories they need.”
How many units were available? Google didn’t say. How many orders were placed? Google didn’t say.
Indeed, that is often the case with many of these product sellouts. And for that reason the companies are often accused of manipulating the supply in order to generate publicity and more demand. It is never clear if that is actually the case.
Here, though, are five high-profile examples of a company falling well short of the demand for a new product. Were they manipulated shortages? The reader can judge.
Amazon Fire TV
$99 On Launch Day
Another recent example of the early sellout is the new Amazon Fire TV. That is the name of Amazon’s new set-top box. Priced at $99 it is intended to compete directly with similarly priced devices like the Apple TV and Roku, as well as the lower priced Chromecast from Google.
But Amazon ran out of supplies a week after the device went on sale at the beginning of April.
(They are back in stock now.)
An Amazon spokesperson (not surprisingly) said, “We’re thrilled with the customer response to Fire TV so far — we’re building more as quickly as we can and we’re expecting more inventory next week.”
That’s to be expected. But it doesn’t answer the question of whether Amazon planned it in the first place. Amazon does have a history of purposefully running out of products. But that usually happens as they deplete old supplies before a new version of a popular product — like a Kindle — is released. In the world of set-top boxes Amazon is a late-comer, so it wouldn’t exactly do to be running out of supplies when there are plenty of other choices.
Of course running out of something does get the product some free publicity.
$399 On Launch Day
Speaking of the Kindle, when Amazon launched the popular e-reader in November 2007, it didn’t take long for the company to run low on supplies.
A USA Today article from March 2008 reported that users who clicked into the company’s web site to buy the product were informed the Kindle was “temporarily sold out” due to high demand.
Amazon said at the time that it was handling orders on a first-come, first-served basis, but it wouldn’t comment on the wait times customers were experiencing. Vice president for digital products at Amazon, Ian Freed, admitted the company had underestimated demand.
From scanning message boards, the best that USA Today reporters could guess was that customers were waiting a month to six weeks to get a Kindle during the worst of the shortage. That spawned a micro economy on eBay, where Kindles were averaging $443.82 per unit.
One woman quoted in the story said the most frustrating part of waiting for her Kindle was that Amazon didn’t keep her informed about how long the wait would be.
One analyst said the Kindle shortage was “like the literary version of a Wii.”
$250 On Launch Day
While the Nintendo Wii enjoyed a fairly smooth launch in November 2006 it was apparent from the start that problems were lurking on the horizon. In September of that year, it was reported that Nintendo would have one million of the highly anticipated consoles on shelves in North America for the launch. Later that month, a vice president with the company slyly revised that number down, saying the one million number was a “misstatement about the number of Wii consoles that will be available in the Americas during the launch rollout.”
Within the first eight days of the launch, Nintendo had sold 600,000 units in the U.S., but supplies were only trickling to the stores. And that trickle continued for nearly two years.
By August 2008 people were shouting “conspiracy” and claiming Nintendo was meeting its sales goals while keeping the throttle pulled back on supply to increase demand and publicity.
One blog in May of 2008 was already hyping the conspiracies. The Geeksugar blog speculated:
“Conspiracy theorists are saying that since Nintendo has already met their end of March goals (with 6 million units shipped), and are building up supply, continuing the demand, and ensuring awesome second quarter sales. Unfortunately, with American retailers now running at 2.5 percent availability, some are expecting the Wii shortage to continue through 2009.”
Later in 2008, though, the economy began looking bleak. And by November of that year the buzz was gone. Nintendo had been trying to respond to demand after all. As the economy slowed, reports of a glut in the Wii supply began to surface. That 2009 shortage evaporated.
Sony PlayStation 3
$500 (20GB) On Launch Day
The Wii wasn’t the only game console that launched during the Christmas season of 2006. It also wasn’t the most plagued with supply problems. That award goes to Sony’s PlayStation 3.
Early estimates of supplies for the console’s November 17 launch had it that there would be 400,000 PS3s to go around on the first day of sales. That never came to be. American Technology Research estimated the real number was in the less-than-200,000 ball park. That spelled bad news for initial sales of the console that did eventually battle back to become quite popular.
The sales performance was so poor that no one even thought to accuse Sony of choking supply to drive up demand. No, in this case the shortage only meant a lot of really sad kids on Christmas morning 2006.
Apple iPhone 5s
$649 (16GB) On Launch Day
New product launches for Apple always generate attention. Sometimes that is because sales are high, sometimes it is because people have camped out in front of Apple stores for weeks prior to a release, and sometimes it is because Apple ran out of a product.
That was what happened when Apple released the iPhone 5s in September 2013. Within minutes of the product’s release, shipping dates were pushed back seven to 10 days. The new color for the rollout — the never-before-seen gold color — had shipping dates pushed into October. Apple was tight-lipped, as usual, about initial sales figures, so it was unclear whether the demand was high for the gold color or whether they hedged their bet with an untested color scheme.
The shortage was good news for Apple … sort of. The company’s stock climbed a bit on news of the shortage. It had previously dipped due to a lackluster response to the product’s earlier unveiling alongside its plastic-backed cousin, the iPhone 5c.
Apple often gets accused, like many others, of holding back on initial supplies. But most analysts figured, this time around, the shortage was due to supply problems of the fingerprint scanner in the top-of-the-line model.
Even Apple has supply chain problems. Even Apple has sold out.