As you no doubt have read, I have bought an iPhone.Â This makes for the third iPhone in the family, and the first of the 3G variety.Â I have replaced my Cingular 8525, which was a nice Windows Mobile phone.Â I bought my phone at the AT&T store near me the day it was released, and even twittered while in line.
Apparently, though, I was one of the lucky few.Â According to one source close to AT&T, Apple fills the purchase orders for the Apple Stores first, and then fills the ones for the AT&T stores.Â On top of that, they will be satisfying the AT&T direct-fulfillment orders first, before sending any to the AT&T stores for general (walk-in) sales.
This is an interesting situation, because it is a conflict with selling one product through two different distribution channels.Â Apple has two retail distribution channels–the AT&T channel, and the Apple channel (and admittedly, but have online and storefront channels.)Â Apple will sell phones through both, but I suspect they sell to AT&T at a “wholesale” price, and they sell through their stores at the higher retail price.Â (Yes, I realize there is the AT&T subsidy involved.)Â It is understandable that a manufacturer would prefer to sell their product at a higher rate of return through their own channels.
Of course, this approach isn’t without problems.Â The fact that the Apple Stores have iPhones in stock, and the AT&T stores do not, leaves customers (especially the Apple-fan types) being hyper-critical of AT&T while applauding how good Apple is at satisfying demand.Â Really?Â Not that hard, when you control the stock.
You see, according to my source, Apple provided up to 10 times as many iPhones to their stores as they did to the AT&T stores.Â And, as mentioned above, they are still sending iPhones to Apple Stores for store-front sales, while they are forcing AT&T customers into a 21 day wait for their “direct fulfillment” orders.
So who is to blame?Â Wrong question, really. I hate the “blame game.”
But–I do believe we must acknowledge that the end result is because of Apple’s decisions, and NOT AT&Ts’.
(see next post for part 2)