Apple sells more Mac notebooks than desktop computers. To improve shipments of the slow selling iMac and Mac mini models, Apple is offering an iPad 1 for $100 with each purchase.
Only the iMac and Mac mini are included in the promotion which lasts for a limited time. Industry analysts said Apple’s promotion will help to move backed up inventory of desktop models.
iPad Manufacturing Glitch
The problem stems from a growing trend toward mobile devices in Apple’s product line. The Mac Pro, Mac mini, and iMac are Apple’s slowest selling products, while MacBook Air, iPad, iPhone and iPod touch models continue to sell better than expected.
To clear out the channel of desktop Macs, now estimated at 120 days, Apple’s new promotion is designed to also deplete all remaining iPad 1 models.
Sources say the order backlog for the hot-selling iPad 2 is the result of Apple manufacturing too many of the original iPad models, which began to slow down in January and February as buyers expected Apple to release a newer model with more features.
Apple released the iPad 2 in early March and supplies have been constrained since. Industry analysts say the original iPad remains in strong supply, though demand has weakened considerably.
An Apple spokesman said the company hopes the $100 iPad promotion will balance iMac and Mac mini inventory soon, and clear out remaining iPad inventory.
Online Orders Only
Unlike the three to four week wait for online orders for the iPad 2, and long lines at Apple Stores privileged enough to receive shipments of iPad 2 models, Apple anticipates a quick reduction in inventory for both the original iPad, the iMac, and Mac mini.
To handle the expected surge of orders, Apple has limited the $100 iPad promotion to online purchases only. A link to the Special Promotion Site provides a self explanatory description of the promotion’s details, time limit, and model availability.
Apple’s Senior VP of Product Marketing, Phil Schiller, described Apple’s desperate action:
We don’t know exactly what happened. We thought we ordered 15-million original iPads from manufacturing—enough to last until the iPad 2. Instead, we received 20-million units and then began manufacturing the iPad 2. Now we’re stuck with millions of iPads that haven’t sold. We hope to reduce the inventory of both Macs and iPads soon. It’s a good thing Steve Jobs is on leave from Apple. He would be pissed if he found out.
One executive, who asked to remain anonymous, was quoted as saying that the company’s backlog of unsold iPads means Apple actually had 117-percent of the tablet market in 2010, not the 90-percent figure quoted in the media.
When asked how many of the original iPads remain in Apple’s inventory, Schiller responded:
I don’t know exactly. They’re everywhere. We have boxes stacked in warehouses all over the country. They’re like Tribbles. They seems to breed on their own.
Industry analysts confirmed that supplies of iMac and Mac mini models will be reduced but that the promotion needs time to work because people are not buying desktop models. It is estimated that Apple may have sufficient supply of the original iPad to last until April 1, 2012.