iPhone shortages frustrate networks on launch day

By Dave Lee
Technology reporter, BBC News

media captionThe BBC's Richard Taylor examines a security flaw in iOS7 and how to fix it

Short supply of the latest Apple iPhone has left mobile networks "frustrated" and "concerned", the BBC has learned.

Several networks said that UK stock of the latest premium model, the 5S, was severely limited and would be likely to cause disappointment.

No networks contacted wanted to be identified over worries they could be further disadvantaged when supplies were replenished.

Apple has said the shortage was due to the product's popularity.

"Demand for the new iPhones has been incredible and we are currently sold out or have limited supply of certain iPhone 5S models in some stores," the company told technology news site AllThingsD.com on Friday afternoon.

UK-based networks contacted by the BBC pointed out that supplies of the new 5C, a lower-cost phone and newcomer to Apple's range, were plentiful.

Insiders from two of the companies told the BBC they suspected Apple was trying to drive sales of the cheaper 5C model, but that their own figures suggested customers had been hesitant to place orders.

Apple has prevented networks and retailers allowing customers to pre-order the 5S.

One network spokesman said they had "crates and crates" of the 5C, but that the higher-end 5S was being "drip-fed" into the market, and networks and retailers had been left "in the dark" about Apple's schedule for replenishing the stock.

He added that he was concerned that customers would be angry with the networks for the delay rather than Apple.

Less than an hour after going on sale in the UK, the 5S was listed on Apple's website as being unavailable for seven to ten working days for the UK.

Delays in other markets

O2 confirmed to the BBC that it would not be selling the 5S in its stores on launch day, but that customers would be able to try a "demo" model and place an order through its website.

It is the first time that O2 has had to put all its stock online because of low availability, a spokesman confirmed.

On Friday morning, EE said interest in the 5S was strong.

image captionCustomers queuing in Covent Garden were cheered into store by staff

"We've had call queues into the thousands," a spokesman told the BBC. "It's pretty unprecedented in terms of the volumes."

He added that extra 5S stock had been sent to 80 of the company's 630 stores, where demand was anticipated to be higher.

Some Vodafone staff appeared confused about their company's position. One call centre worker told the BBC that there would be no 5S units in stores until Saturday. Another said that stock would be available on launch day in some of the network's stores, but that the company was unable to say which.

A Vodafone spokesman later made a clarification, saying: "We will have models of both 5S and 5C in our stores across the country from tomorrow.

"We are doing as much as we can to ensure every store has every configuration. We will be very open with our customers about what we have available to them."

In Apple's flagship store in Regent Street, London, the BBC was told that details of stock levels had not been shared with staff because of "security reasons".

Customer John Davies got in touch with the BBC saying he had given up at the store on Friday morning.

"By seven o'clock we were told they were already out of 'gold', and by eight they only had 32GB whites but 'plenty' of blacks.

"By nine-thirty there were only 32GB black phones so I gave up after three hours without a phone.

"I later walked past the store in Covent Garden and the manager there told me it wasn't worth queuing, in his opinion, as they'd soon run out. Both stores had plenty of 5Cs in every colour."

In the US, technology media have reported similar issues with supply. AllThingsD.com quoted one US network as saying it had "grotesquely unavailable inventory" before launch day.

Delays have become apparent in other markets as well. In Australia and China, customers buying the 5S directly through Apple have been told to expect to wait at least seven working days, while customers in Hong Kong and Singapore are being told the phone is not available until next month.

'Encourage demand'

Technology commentators and analysts have been sharing theories on the reason for the apparent lack of stock.

"This is the first time that Apple has given its customers a choice on phones," said Graeme Neill, deputy editor of Mobile.

"I think this is a way to try and encourage and foster demand for the 5C before it comes out."

Gene Munster, an analyst at US investment bank Piper Jaffray, said the company could be suffering supply chain problems related to new hardware.

"We believe the 5S is more production-constrained than the iPhone 5 was at launch," he wrote, "likely due to the addition of the finger-print technology."

image captionIt is still expected to be a successful launch for Apple in China

Others have suggested that supply issues related to the 5S's processing chip had slowed production.

That said, Apple is expected to post positive sales in China of the 5C, where the phones will also be launched on Friday - the first time the country has got the smartphone on the same day as other markets.

Additionally, the roll-out of iOS7, the first major revamp of the company's mobile operating system since the very first iPhone, has been fast. However, news of a security glitch has dampened its reception.

More than 35% of iPhone handsets are said to be running the software after just one full day of release.

Mr Neill suggested that, despite any adverse effects from low stock, Apple would not be greatly affected longer-term.

"They're an insanely popular brand. People have been queuing at the Regent Street store since Tuesday night.

"Apple coming out at midday tomorrow and saying the whole stock has been sold... it's always in their best interests to sell out within a couple of hours.

"It's a kind of win-win for Apple."

Follow Dave Lee on Twitter @DaveLeeBBC

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