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Will iPad Delivery Flub Juice Demand or Dampen It?

Will iPad Delivery Flub Juice Demand or Dampen It?

Apple's iPad will reach the hands of some eager consumers this weekend, but those who made their buying decisions late in the preorder cycle will have to wait a couple of weeks for delivery. What's still up in the air is how badly customers want an iPad. Apple is known for the hype that often surrounds its product launches -- will lines be snaking around the block at Best Buys this Saturday?

By Erika Morphy MacNewsWorld ECT News Network
03/29/10 12:01 PM PT

People who placed pre-orders for the iPad after Saturday, March 27, are finding that they will have to wait a few weeks beyond the April 3 launch date to receive their devices. The shipping date for those pre-orders is now April 12. [*Correction - March 29, 2010]

These dates apply to the first wave of iPads that will hit the market -- the WiFi-only units. It appears that consumers who ordered the 3G + WiFi iPads are still on track to receive their devices in late April.

Apple is making some of the devices available at its 221 Apple stores and at least half of all U.S. Best Buy stores for the official Saturday launch.

At face value, the slight shipping delay for some pre-orders suggests that Apple sold out its initial inventory -- an inventory that shrank due to supplier problems that analysts previously reported. It's also possible that Apple is deliberately curtailing the supply of its iPads in order to tweak demand as much as possible -- what better way to do so than by announcing its limited supply has sold out?

It's conceivable that early adopter demand is not as strong as the company had hoped, so it could be calibrating supply to meet weaker-than-expected demand.

Of course, it could simply be that Apple is still grappling with minor production and delivery problems.

The Valentine's Day Problem

That's the direction Rob Walch, host of Today in iPhone, is leaning.

"The fact that people who are now pre-ordering the iPad are being given a later delivery date doesn't surprise me," he told MacNewsWorld. "It is getting close to the delivery date, and Apple is just trying to get its ducks in a row."

Besides production issues, there is also the matter of scheduling delivery. It's the same scenario that confronts late planners for Valentine's Day who find they can't have flowers delivered on the actual date.

"A service like FedEx or UPS can only deliver so many devices in one day," Walch said.

Offering the device in the Apple stores and Best Buy should bolster the supply, he noted. Most likely, the ones at the Apple stores are already unofficially spoken for; consumers who really want to get their hands on an iPad on April 3 should try a Best Buy that is not located close to an Apple store, Walch said.

"My guess is that Apple is planning to seed the Best Buys that are not close to the Apple stores with the iPads to spread out availability as much as possible," he speculated.

No Hidden Agenda

It is unlikely that Apple is deliberately tinkering with its supply chain in order to dole out the iPads, said N. Venkatraman, a business professor at Boston University.

Rather, Apple is probably trying to manage its pipeline as cleverly as possible, given that it does not have full control over many of the elements of its global supply chain involving Asian producers.

"I do not think they can or want to deliberately goose demand for their product by artificially creating a shortage, because the financial market expects that they will lead in the creation of this category," Venkatraman told MacNewsWorld. "By limiting supply, they risk competitors coming up with their version of tablets."

It's actually surprising that the delivery date for pre-orders was shifted by only a week or so, Venkatraman said. "That is not a big deal."

No Compelling Reason to Buy

There are some skeptics who believe Apple might be panicking a bit about the iPad's unveiling, however.

"I think the theory that Apple would rather have too little than too much on its store shelves is a viable one," said Peter Cohan of Peter Cohan & Associates.

"If you can create a sense that there are not enough units to go around, it will make people pay more attention to the device," he told MacNewsWorld.

The appeal of the iPad -- and what it offers that the iPhone or iPod touch doesn't -- is still a mystery to Cohan.

Tablet computers have yet to make inroads with consumers for some very good reasons, he said. "It is a struggle to figure out who will want to buy it."

*ECT News Network editor's note - March 30, 2010: The original published version of this story incorrectly stated that people who pre-ordered iPads after April 27 would experience shipping delays. The cutoff was March 27, not April 27.

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