The Apple Watch: Generating “Supply Chain Strain” or Simply a Blockbuster?

I’m one of the many folks who are geeking out about the Apple Watch and have my place on the waiting list to purchase one. As a runner, the idea of a heart rate monitor that is simply on the wrist all day and accurate enough to be valuable is sufficient to put me over the edge. But aside from my own “early adopter” proclivities, from a procurement and supply chain standpoint, the launch of the watch is also fascinating to keep tabs on for a variety of sales and fulfillment reasons. (And this was true even before news of the Apple/ACC Technology Holdings supply issue came out last week.)

As a personal example, when I recently went to the store and spoke to our small business sales team, who are usually good about getting the products we want in our hands as quickly as possible, the polite response was: skip us and order online. “We can’t help,” in the store or through the regular channels, they said.

This has never happened before. But perhaps it’s not surprising if the facts are to be believed. A somewhat high level article in The Telegraph explores the basics surrounding the release of the Apple Watch and it’s delays, noting that “with rumors of 1 million pre-orders in one day in the US alone, and the firm now pushing estimated delivery times for its product into June, speculation is rife that its supply chain may not be able to keep up with demand.”

Are supply chain delays with the Apple Watch the new tech status quo? As the article also observes, “This type of speculation ahead of a big launch is nothing new. Recently, Samsung was forced to admit that it may be unable to fulfill the 20 million pre-orders received for the new Galaxy S6 and S6 Edge … This ‘supply chain strain’ has become the new norm in the consumer- driven world of high-tech gadgetry, where all eyes are on the newest and most innovative devices.”

I’m not sure if I would describe the situation so much as general “supply chain strain,” but rather would suggest such delays are isolated to specific blockbuster products. The vast majority of high-tech manufacturers would be thrilled to have a single item with even half the backorder demand as the Apple Watch every couple of years, let alone more frequently.

But from a B2B sales, procurement and supply chain insiders perspective, the overall watch design and delays do raise some rather curious questions:

  • Is the delay in fulfilling orders based on final assembly (production) or with lower-tier suppliers?
  • Why weren't in-store sales representatives on the business teams better briefed to explain the reason for a lack of inability to fulfill orders on the business side?
  • How will Apple eventually integrate the in-store and business user purchasing experience for the Apple Watch?
  • From a repair standpoint, is the watch designed to be modular from a service perspective if key components fail? The tear-down suggests perhaps not
  • Given this concern, will Apple be able to keep up sufficiently with warranty claims/replacements for the Apple Watch in 2H2015?

What do you think?

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First Voice

  1. Bitter and twisted:

    Its deliberate

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