Still More Apple Pwnage

[Kidlicious]

Continued from More Apple Pwnage

It's not a question if the distributor has a right to return the merchandise. Although I think that's often the case with new products.

The issue is channel stuffing. Which can get the manufacturer investigated by the SEC, result in fines, and cost some people their careers. Asher is accusing Apple of channel stuffing.

A deceptive business practice used by a company to inflate its sales and earnings figures by deliberately sending retailers along its distribution channel more products than they are able to sell to the public.

By channel stuffing, distributors temporarily beef up their accounts receivables. However, unable to sell the excess products, retailers will send the excess items instead of cash back to the distributor, who must readjust its accounts receivable and ultimately its bottom line. In other words, stuffing always catches up with the company, because it cannot maintain sales at the rate it is stuffing.

This is usually done fraudulently to raise the value of the stock. Channel stuffing is illegal.

http://www.investopedia.com/terms/c/channelstuffing.asp

[Asher]

What the hell are you going on about?

It's not channel stuffing, it's not done intentionally to raise the value of stock. I have said this over a dozen times now.

The problem is likely AT&T being overconfident in their ability to sell iPhones through AT&T retail stores. Consumers are not doing that, they are going to Apple stores instead.

AT&T likely bought too much stock of the iPhone that they could not sell through their stores. This is not illegal in any way, it's just typically AT&T stupid.

Why do you want this horribly one-sided flogging to continue?

[Kidlicious]

But you're saying that Apple is intentionally not disclosing material information to the public in order to keep their stock price high, right?

[Nikolai]

It'll be interesting to see what happens now that free unlocking of the iPhone has come on the market.

[Kidlicious]

Asher,

Overstocking ATT stores when the phones aren't selling there, and then reporting that as sales is channel stuffing. These types of things aren't accidents, and the SEC doesn't see them as such.

[Asher]

Originally posted by Kidicious
But you're saying that Apple is intentionally not disclosing material information to the public in order to keep their stock price high, right?

I am saying Apple does not have the consumer sell-through rate, AT&T does. If Apple does have it, they are under no obligation to disclose that. These companies ALWAYS report "sold to retailers", and NOT "sold to consumers". This is NOT illegal.

[Pekka]

http://www.thebestpageintheuniverse.net/c.cgi?u=macs_cant

And we know it's true

[Asher]

Originally posted by Kidicious
Asher,

Overstocking ATT stores when the phones aren't selling there, and then reporting that as sales is channel stuffing. These types of things aren't accidents, and the SEC doesn't see them as such.

NO.

This is so simple! They ARE sales, to Apple. They SOLD these phones to AT&T. Apple reporting this as a sale is not only legal, it is standard practice.

[-Jrabbit]

If Apple forced ATT to take delivery of unwanted/unneeded additional stock, there would be a stuffing issue. There's no evidence of that here.

[Zopperoni]

Originally posted by Pekka

http://www.thebestpageintheuniverse.net/c.cgi?u=macs_cant

And we know it's true

This one is accurate too: http://www.thebestpageintheuniverse.net/c.cgi?u=iphone

[Kidlicious]

Originally posted by Asher
I am saying Apple does not have the consumer sell-through rate, AT&T does. If Apple does have it, they are under no obligation to disclose that. These companies ALWAYS report "sold to retailers", and NOT "sold to consumers". This is NOT illegal.

Do you completely ignore everything people post?

You have no reason to believer that Apple continues to deliver inventory to ATT store rooms. That's not common sense if the product isn't selling. You are taking things from your fantasy world and arguing as though they are common sense and facts.

[Pekka]

At least most manufacturers in mobile industry sell to providers in bulks as the main strategy and that's the sales numbers for the manufacturer. Because they sold it and the retailer paid for it.

Most manufacturers also do not have stockpiles because every unit is sold before they have a chance to dust. It doesn't mean there aren't phones in the shelves of stores.

This is why, for example, my ****tiest day in the week working in the industry was Monday, because every Monday we had a meeting about the production figures and I had to explain why we didn't meet the quota that was possible IF everything went perfect at all times, components were perfect, logistic between subcontractors and others worked like heaven and no airplanes and trucks ever missed their deadlines, and everything was 100% good quality and never had to be dumped. It is seen as LOSS.

This is the logic behind it: we can sell every single unit that comes out of the production lines, in fact, they already HAVE BEEN SOLD. De facto sold. The providers and customers have bought so much ****, that production planners are only trying to keep up with the orders. So what you have is constant flow of prioritized orders, meaning if you can't make the deadline, the company has to pay for it. As in they get penalized. So you bet your ass the high priority customers, the biggest customers, you better make that deadline even if you have to get naked to do it and beat someone up.

So, in the top of the industry, all units are sold before they are even made. And they have to open new factories all over the world, just to keep up with the demand. It's not shutting down factories and shifting them to India and China, it's opening extra factories in other marketplaces where huge loads of units are sold because it only makes sense (Be where your customers are, save in logistics, take the competition to all corners of the world and battle local companies to make sure you are have the biggest share in the future as well).

So there's no need for stock for the big boys. None. They're always _behind_, even though they have massive production capabilities.

So... when Apple gets to this point, then we might have a case of an opportunity to pwn. But this point hasn't been yet reached so we just have to wait and see how they can manage.

So this is why for example the environment working in these places is tough. If you happen to make an hour worth of ****ty units, maybe a problem with the process, components, human error, what ever it is, say you have for example 1000 units made and you have to trash them because they're failing the testing. It's not that you just had to scrap a whole lot of components, it's also 1000 units NOT sold, it's also 1000 units worth of time NOT sold, it's a double loss. Because now you have to make 2000 to get the 1000, and within that time you could have made that 1000 more, and they are all sold already, so you're just selling less. That can lead to missing the deadline, so you're paying a penalty for it as an extra. So it's not just simply screwing up....

[Kidlicious]

Originally posted by -Jrabbit
If Apple forced ATT to take delivery of unwanted/unneeded additional stock, there would be a stuffing issue. There's no evidence of that here.

Forced? What are you talking about? The issue is whether the sales figures are misleading or not.

And Asher is the one who needs to start providing some evidence for his claim that there is a material amt of inventory at ATT stores.

[-Jrabbit]

That's awesome, Zopp!

[Asher]

Originally posted by Kidicious
Do you completely ignore everything people post?

You have no reason to believer that Apple continues to deliver inventory to ATT store rooms. That's not common sense if the product isn't selling. You are taking things from your fantasy world and arguing as though they are common sense and facts.

Who said anything about continuing to deliver? My entire point was they overestimated in their original order shipment.

Do you completely ignore everything people post?