Invites, pre-orders, and stock shortages; what’s the fairest way to launch a smartphone?

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We live in a day and age where our phones are an integral part of our regular routine. We wake up to alarms on them. We receive text messages, emails, pictures, chats, and phone calls with them. They help us keep track of our schedules so we don’t miss important events. We are able to keep up on local, national, and even international news — and in many cases they enable us to report on that news ourselves. They provide us with entertainment in the form of books, television shows, movies, and even games. Saying these devices are “important” is a grotesque understatement.

Given the central role that smartphones occupy in our lives today, it shouldn’t come as a surprise that competition plays a central role. Who has the better phone, or the newest one is something you’ll see argued on every campus and in every workplace. Manufacturers know this and are themselves competing for who will take the top spot in the latest round of devices.

All factors combined leave us with the desire (if not a true “need”) to replace our devices every year or so. Many of us feel compelled to get the latest and greatest of all the available devices at the time of our purchase. Exactly which one that is will vary by person and according to what’s available on the market at the time. One item, however, remains consistent across operating systems, brands, and even carriers: frustrations with smartphone launches.

Smartphone Launches

chou-one-launchIn this industry there’s really no such thing as a well-kept secret. Eventually designs, specs, and even details get leaked well before a new product is officially launched. This drives interest and some would argue increases demand. This perceived demand, in turn, dictates how many devices will be needed, and the timing of when they’ll be needed. It’s easy to look back years later and say that a certain number of any given smartphones were sold. It’s not as easy to determine when those devices were actually needed. Were 10,000 needed on the first day, or was it closer to 100,000? Was the demand consistent, or did it increase — or drop off– as the months passed? Predicting these is even more challenging.

A manufacturer wants to get their brand new, flagship product to market as quickly as possible. Managing the supply chain of components, and the distribution of finished goods is a subtle science and an exact art.

Make too many phones available all at once and there won’t be an “urgency” in the market. Demand will suffer. Prices will drop. Popularity will wane.

Don’t make enough phones available (whether by design or by some shortage along the line) and customers will get frustrated and may abandon your product in lieu of that made by your competition — or decide to forego an upgrade at all.

Mitigating Supply and Demand

Supply-and-Demand-GraphTo combat the problems of supply and demand, some manufacturers team up with carriers or stores (or even entire countries), providing “exclusive” deals. We talked about why exclusive deals are a bad idea earlier. Others, like OnePlus, have turned to an invitation system, through which some are offered the ability to order its new smartphone — but not the general public, not yet anyway. Some companies, like Pebble, offer customers the ability to pre-order its devices — and wait until a unit is available to send out, sometimes months later.

Then, of course, there are stock-shortages. Google is famous for them. Sometimes you can head over to the play store and the phone you wanted is out of stock. An hour later it’s back in stock. An hour after that, it’s unavailable again.

Each method has its own benefits as well as disadvantages. Which one is offered is usually left up to a marketing department.

Which method do you prefer?


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About The Author
Joe Levi
Joe graduated from Weber State University with two degrees in Information Systems and Technologies. He has carried mobile devices with him for more than a decade, including Apple's Newton, Microsoft's Handheld and Palm Sized PCs, and is Pocketnow's "Android Guy".By day you'll find Joe coding web pages, tweaking for SEO, and leveraging social media to spread the word. By night you'll probably find him writing technology and "prepping" articles, as well as shooting video.Read more about Joe Levi here.