It’s clear by now that the Apple Watch launch did not go as planned, with demand outstripping supply and vast numbers of customers potentially waiting weeks for their new smartwatch to arrive.Market research company Slice Intelligence has now put a number on this— claiming that just 22% of Apple Watch buyers actually received their order by this weekend, the official date when Apple said the watches would actually become available.
Meanwhile, amid widespread confusion as to the device’s availability, a source at Apple is telling us that the launch is being viewed internally by some employees as a massive screw-up.
Sales have been amazing. BUT …
Let’s back up here for a moment: No-one is denying that sales have been fantastic. While Apple hasn’t yet released concrete figures, it looks like the Cupertino company managed to sell more smartwatches in a single day than Google has managed with Android Wear in an entire year.
The issue is with the logistics of the launch itself.
Apple had decided to ditch its traditional blockbuster launches, with retail chief Angela Ahrendts telling staff in a leaked memo that “the days of waiting in line… are over.” Significantly, the Watch isn’t even available to buy in store. While customers can (but only with an appointment) try the device on in stores, there aren’t any units actually there to purchase, and there will not be for the foreseeable future.
This has caused serious confusion among customers, with Ahrendts acknowledging in a video that retail staff have been “bombarded with questions” from customers unable to understand why — despite the apparent “launch” — the Apple Watch isn’t actually available to buy.
There just aren’t enough to go around
Exacerbating the problem is the fact that demand has vastly outstripped supply. Simply put, Apple does not have enough Apple Watches to go around.
After pre-ordering online earlier this month ahead of last Friday’s launch, some customers have been told their devices may not ship for weeks, with some not arriving until June. Slice Intelligence believes that just 22% of its estimated 1.7 million Apple Watch orders in the U.S. were actually delivered to customers this weekend. (It’s unlikely there would be a higher rate of shipments elsewhere in the world.)
Another 547,000 Watches are expected to ship between April 27 and June 11 — but 647,000 Apple Watch orders still have no delivery date at all.
Amid this failure to fulfil orders quickly, Apple quietly dropped the April 24 launch date from its website altogether.
It’s a misstep for Apple execs
The Apple Watch has been closely watched as the first major new product launch for CEO Tim Cook. But Angela Ahrendts has just as much riding on it as he does, if not more so. The former CEO of Burberry, she joined Apple in 2013 to revitalise the company’s retail experience.
The Apple Watch launch was a chance for her to prove what she was capable of, and ahead of it she promised retail staff a “significant change in mindset” is coming to the way Apple launches products. Yet within a month she has rowed back on these comments, saying that “we all love those blockbuster Apple product launch days — and there will be many more to come.”
Fortune’s Philip Elmer-DeWitt may think the launch was “classy,” but Apple staff at the retail level largely regard it as a massive screw-up, a source tells us. Employees are being forced to turn away eager customers again and again and again — and they hate doing that.
Apple must have known this would happen
Ahrendts cannot be blamed for demand outstripping supply. It’s extremely logistically challenging to develop the international supply chain for an entirely new product category with a predicted run of millions of units.
But Apple does employ analysts who are responsible for calculating potential demand and guide strategy. They would have known the company might not be able to satisfy all demand on launch day. The mystery is why they stuck with the April 10 and April 24 launch dates knowing that supply was so limited as to be non-existent. There were simply no watches available to buy on the date they went on sale. (The only watches in existence at that point were display items in stores and advance models given to celebrities and tech journalists.)
Its executives must have realised in advance that they were not going to be able to satisfy demand.
One wonders then why Apple chose to stick with the April 10/24 dates in the knowledge that it would be months behind the curve — leaving customers waiting, and confusing its staff in the process.
Business Insider Emails & Alerts
Site highlights each day to your inbox.