- 11-29-2012, 05:13 AM #1
Nokia's New Lumia: In High Demand, or Just Short on Supply? - NYTimes.com
So I was reading this article in the NY Times, where the author was talking about the low supplies of the Lumia 920. To paraphrase, he was curious as to whether they were short because demand was high, or that possibly Nokia just could not make enough. I know this has been discussed before, but the one line in the article that prompted me to make a post was this
He noted that on Amazon, for instance, the Lumia 920 sold out just three days after it went on sale on Nov. 7, and the “backordered” status has stuck ever since — a sign that Nokia may simply be lowballing supply because it doesn’t expect to sell many phones here.--
"A guilty conscience needs to confess. A work of art is a confession."
- 11-29-2012, 05:17 AM #2
Given the flat (disappointing) sales of the former flagship 900, it doesn't surprise me that supplies are limited.
In the US it was limited to one carrier. AT&T probably gave a sales estimate to Nokia, and that's what they made.
Then sales boomed. If the number of 2.5mm is accurate, that's a lot of Windows Phones sold in a short period of time.
Nokia will catch up. Other companies with a logo resembling a fruit are still catching up on their latest release. Took my wife 4 weeks (including a few day delay due to Sandy) to get a white iPhone 5...
It's just frustrating when you are waiting...
11-29-2012, 05:35 AM #3
- 991 Posts
Its pretty simple.
Nokia will have had advance orders for x million 920s. They will have built 1.5 maybe 2 times x to satisfy demand, and have some spare phones.
If everyone completely underestimated demand, how is that Nokia's fault? No manufacturer will build huge amounts of excess stock, especially when they are in the sort of financial position Nokia are in.
This could have all been avoided, if all the Telcos had opened pre-orders the moment Microsoft officially announced WP8. The telcos would have had a good idea of the demand for the phone. They could then have adjusted their orders from Nokia 2-3 weeks ago, rather than now.
- 11-29-2012, 07:56 AM #4
Nokia can't just push a button and crank out a couple million new handsets tomorrow. AT&T put in an order for X phones, the various other retailers put in their orders, and Nokia ordered the parts and trained their workers and started making them. After their retailers realized they had underestimated demand and put in a bigger order, Nokia still had to order the necessary components from their suppliers, wait for their delivery to the factory, produce the handsets, put them on a boat for the US, and get them through customs. Keep in mind that Nokia's suppliers were also faced with an unexpected surge in demand, and had to order the materials they needed, wait for their arrival, try to find free capacity in their plant (because they have other customers besides Nokia, with other outstanding orders).
One other point is that it's very difficult to measure how high the demand for an item really is once it's exceeded the supply, which makes companies somewhat hesitant to ramp up their orders too exuberantly. For example, if AT&T is getting 1.5M 920's from Nokia each month, and selling 1M of them each month, then they can say with certainty that there is demand for 1M 920's per month. But if they're getting 1M per month and selling 1M per month then they don't really know if there's demand for 1M/Month, 1.5M/month or 2.5M/month. Even if they count the number of people who are turned away at each store, they don't know if it's the same few die-hard fans that are trying every store in town. They are painfully aware of this fact, which makes them somewhat cautious about putting in a really massive order and risking getting stuck with it. A few years ago Ford announced they were making a new Thunderbird. They received an unprecedented number of pre-orders and decided it was gonna be a big hit and dedicated a big chunk of their capacity for it. It turned out that the people that were sufficiently interested to put a deposit on a pre-order were also the only people remotely interested in the car at all. They filled the pre-orders and sold only a few thousand more cars over the next few years before a wiser, sadder Ford pulled the plug on it.
- 11-29-2012, 08:11 AM #5
This is actually an excellent frustrating problem to have - simply demand is high and production was based on history, which supports the current back order status... and FYI OP, NYT's is Apples best buddy since Mr.Jobs and the media monster learned a long time ago how to truely control/drive market share - I wouldnt expect anything to impressive to be said about anything other then an Apple product. Wait for Nokia and Carrier sales figures Q4.
- 11-29-2012, 08:26 AM #7
- 11-29-2012, 08:31 AM #8
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