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Apple: 600,000 iPhone preorders crashed systems

By | June 16, 2010, 8:59am PDT

Summary: Apple said that the number of preorders was “far higher than we anticipated, resulting in many order and approval system malfunctions.”

Apple said Wednesday that it took more than 600,000 preorders for the iPhone 4 in one day.

In a statement (Techmeme), Apple said that the number of preorders was “far higher than we anticipated, resulting in many order and approval system malfunctions.”

Apple then apologized for everyone that was turned away.

There’s a good news, bad news situation here. First, it’s good that Apple sold a lot of  iPhone 4 devices. In fact, it’s already more than halfway to Piper Jaffray’s estimates after a few hours.

The bad news: Apple’s planning with its partners was too conservative and its capacity and IT systems fell short. AT&T also took a lot of heat on Tuesday.

Also: iPhone 4 pre-orders sell out; Apple bumps ship date for new orders

Indeed, AT&T said in a statement that it stopped taking preorders so it could meet demand.

iPhone 4 pre-order sales yesterday were 10-times higher than the first day of pre-ordering for the iPhone 3G S last year…
Given this unprecedented demand and our current expectations for our iPhone 4 inventory levels when the device is available June 24, we’re suspending pre-ordering today in order to fulfill the orders we’ve already received.

The availability of additional inventory will determine if we can resume taking pre-orders.

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Topics

Apple iPhone, Apple Inc., Smart Phones, Consumer Electronics, Personal Technology, Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic.

Disclosure

Larry Dignan

Larry Dignan has nothing to disclose. He doesn’t hold investments in the technology companies he covers.

Biography

Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CNET News.com. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism and the University of Delaware.

For daily updates, follow Larry on Twitter.

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RE: Apple: 600,000 iPhone preorders crashed systems
tomlin21-24319035676893835085146735905770 11th Oct
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Nice to see Apple taking part of the blame
bobiroc 16th Jun 2010
and 10 times higher than the previous generation. That is insane and yet people expect companies to foresee the future. Other bloggers and commenters need to stop bashing AT&T primarily for this system overload. I am sure some customer service reps said that people would get a phone but how were they to know it would be such a high demand. Of course this phone has quite a bit more features over the 3GS since the 3GS was very very close to the 3G.

Does anyone know what the pre-order demand was for the original iPhone or the iPhone 3G. Probably considerably less than this.
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I agree that its hard to predict volume, but...
jgpeters 16th Jun 2010
@bobiroc I thought that there were companies out there that provide server farms for spikes like this. I wouldn't expect AT&T to upgrade systems to handle that kind of volume internally, but I still think that the prudent thing would have been to have some way to temporarily handle this kind of thing. I'm not a network architect, but I would think that there are solutions that would allow for dynamic scaling for a day that you knew would be heavy. This just added insult to injury for AT&T's already battered reputation. Maybe they don't deserve it, but I'm not prepared to give them a complete pass on this.

And to answer your question about volume, this was reportedly 10x volume of 3GS. Sold out 3GS in 5 days, 4 in one day.
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RE: Apple: 600,000 iPhone preorders crashed systems
bobiroc 16th Jun 2010
@jgpeters

Well if it is true that AT&T could not communicate with Apple's servers then it is hard to place the blame. I have heard that AT&T orders direct from Apple 1 to 1 as they do not stock many phones in a warehouse or anything (at least very long). So if this is true then how come only the blame on AT&T from most of these bloggers and commentators?
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You make a good point
jgpeters 16th Jun 2010
@bobiroc This was a joint effort involving communications between two systems. Apple should have taken precautions to make sure that its customers had a successful experience, which by extension means making sure that AT&T could process transactions. And I know that they are AT&T's customers as well, but I am only an AT&T customer BECAUSE I have an iPhone. So, I think that there should be plenty of blame to spread around. I guess many of us are quick to blame AT&T and reluctant to criticize Apple, but they likely deserve it in this case.
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RE: Apple: 600,000 iPhone preorders crashed systems
rhonin 16th Jun 2010
@bobiroc
Think this was bad?
Wait till delivery day and they try to activate those phones.
System melt part deux?

Let me get the popcorn.....
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RE: Apple: 600,000 iPhone preorders crashed systems
bobiroc 16th Jun 2010
@zenwalker

I know right... The Sales rep said they are making appointments at their store and are going to call the customers who pre-ordered to try and make that smooth as possible based on the order people came into pre-order so they told me (even though I was number 1 for that store) that some may not get theirs activated that night unless they come in and get the phone and try and do activation themselves. If mine comes in and is available thursday morning I am thankful I am close to the Best Buy and can sneak out of work to get this done if I need to. If not then I wait and try to be patient.
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OK, Apple was partly to blame, but seriously! AT&T
bbroaddu@... 16th Jun 2010
Why would AT&T's website make me sign into each and every screen on their webpage yesterday and why would I get kicked out, over and over, just for looking at my own account? I wasn't even trying to order an IPhone yesterday when I was booted. Several Times! I was researching my data usage and reading AT&T's new data plan policies. I couldn't use the site and I never went to preorders or upgrades!

Apple is taking the blame so People don't hate AT&T!!!
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OK Apple
htotten 16th Jun 2010
@bbroaddu@... I spoke with some guys at AT&T and the problem was the overload and session tracking getting hammered......
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REALITY: a system crashed. SPIN: Look how popular we are!
Tim Acheson Updated - 16th Jun 2010
This is classic corporate spin. How typical of the Apple corporation to take a failure in technology they use (bear in mind they're supposedly a leading tech company) and spin it into "Wow, look how many orders we had."

Making claims about the number of units ordered is an excellent distraction technique, detracting from Apple's failings, as perfectly demonstrated by the headline of this article.

Focusing on individual companies or IT systems which failed is academic. Apple knew what it was setting up, and the fact is the system chosen and used by Apple failed. The figure quoted is highly spurious, and the cause of the problem, if a genuine problem existed, will be impossible to discern amidst all the corporate propaganda.

http://www.timacheson.com/Tags/Tag?tag=apple
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RE: Apple: 600,000 iPhone preorders crashed systems
bobiroc 16th Jun 2010
@Tim Acheson

And other systems and servers have fallen for the same reasons. Look at some new video game releases or shopping sites for other popular items on launch/pre-order day. When they build a server or farm of servers the IT department does their best to account for high usage but on days such as this no one can just expand capacity in an instant I don't care who they are.

Lets say all orders had to go through Apple for approval right? They took 600,000 orders in probably a 6 - 7 hour window at the peak time before shutting things down right. That is like 1430 phones ordered every minute or 24 phones every second. Now these are just estimates but I would suspect the bulk of the ordering was done after 7am online or 9am/10am at the stores and most had shut down by early to mid-afternoon or so. I think that makes it a decently accurate estimate.

So think of that in that perspective and tell me if you know of any company that handled that type of ordering smoothly and without any hiccups.
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RE: Apple: 600,000 iPhone preorders crashed systems
rengek 16th Jun 2010
@bobiroc
wow what nonsense. Are you kidding me. A $200 billion+ company can't handle 600,000 transactions?!?!?

Thats what scalable servers are for. Thats what virtualization and server farms are for. If you can't handle 2,000 transactions per minute there is something seriously wrong with your infrastructure.

How many millions of transactions/day do you think amazon deals with during the holiday season? Even small banks handle thousands of transactions/minute. The makers of warcraft has to handle millions of users and those users are not just simply doing a few form transactions. Each customer add persistent load/stress on the servers for hours.

I highly doubt that the problem is with load. But if it is, thats just sad and pathetic. Its a nice spin on bad publicity.
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RE: Apple: 600,000 iPhone preorders crashed systems
hawks5999 16th Jun 2010
@rengek
Funny thing about holidays: they happen at the same time every year. Amazon is able to ramp up capacity in an orderly manner in preparation for a known date and 15 years of shopping data to forecast traffic. Not to mention that Amazon runs an entire infrastructure service for hosting (AWS). Apple has 3 years of iPhone releases to forecast with and they don't have an entire infrastructure for hosting (no MobileMe is not comparable to AWS).
Look at Amazon in 2000: http://news.cnet.com/E-tail-sites-crash-over-holiday-weekend/2100-1017_3-249048.html "But holiday outages have become commonplace enough and appear to indicate that even with loads of preparation and experience, online stores are still vulnerable to spikes in traffic."
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RE: Apple: 600,000 iPhone preorders crashed systems
bobiroc 16th Jun 2010
@rengek

Yes But Amazon is an online store that takes large orders every day and they know this is gonna happen day in and day out just like banks and other companies that do it every second of every day. They have large server farms all over the country/world because that is their business every single second of every day. This is not business as usual for the two companies that had issues yesterday. This probably only happens to AT&T and Apple once (twice at most) a year. Should they have been more prepared, yes and I am not saying they do not have some apologizing to do but even stores like Amazon or banks have their issues. So if you can forgive the pun you are comparing apples to oranges. Some expert probably made an estimate that they would get lets say 100,000 pre-orders on day one and they prepared for let's say 200,000 to give it a cushion and they exceeded those estimates by way more than that. I know I am making some numbers up but I am just trying to illustrate a point that unless you have some 6th sense you cannot prepare for everything and basically **** happens.

So since their systems were designed for X amount of transactions and they hit X to the third power of transactions they system couldn't handle it. It sucks but that is they way it is. They normally do not get anywhere near that let alone within a few hour period so the other 350 or so days a year they would be sitting idle.

Maybe Apple and AT&T will learn and ramp up their systems and maybe they won't but for you or anyone to expect such is nonsense.
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FWIW...
Bruizer 16th Jun 2010
@bobiroc
I got right though on the App Store App with little delay at abut 10:00 am on Tuesday.

I do agree that 600,000 competed transactions (and what? another 600,000-1,000,000 failed/curiosity) does not sound like a huge number figuring what iTMS does every day.
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RE: Apple: 600,000 iPhone preorders crashed systems
smartin007 16th Jun 2010
@Tim Acheson
Apple didnt fail, the succeeded in selling out the first day. Its so funny to see an MS fanboy bitching and moaning about success.
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Really?
frabjous 16th Jun 2010
@Tim Acheson You must know that "spurious" means "fake or false" so I am curious as to how you know Apple's figure is "highly spurious"?
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Apple's never really been up front with their numbers
John Zern 16th Jun 2010
And a company with Apple's history of "selling out" of products can be called into question simply because, they happen to do it each time?

iPhone 3GS sold out due to: "unprecedented demand and our current expectations"
iPod Touch sold out due to "unprecedented demand and our current expectations"
iPad WiFi "sold out due to "unprecedented demand and our current expectations"

So how is it any company, especially one like Apple, can get caught short handed each and every time? I though "real" companies learn to adapt, and understand how to plan for the next time? It seems each and every time, Apple hasn't learned a thing.

So for a person like Tim Acheson to question those figures is not out of the realm of possibility.
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RE: Apple: 600,000 iPhone preorders crashed systems
Pete "athynz" Athens 16th Jun 2010
@Tim Acheson So THIS is the attack of a Microsoft Shill? HAHAHAHAHA!!!!!!! Come on who could have anticipated 10x the orders for the iPhone 4 (as compared to the iPhone 3GS)? I'll bet they won't have any of these issues when WP 7 rolls out...
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RE: Apple: 600,000 iPhone preorders crashed systems
frogspaw 16th Jun 2010
@Tim Acheson
Wow, I just visited your diatribe of a blog.
You sir, are seriously deranged and consumed by Apple hatred. I feel for you... not
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Rather conspiratorial doncha think?
godsfault 17th Jun 2010
@Tim Acheson All wildly popular events cause logjams. We don't need to get Machiavellian about it.

Personally, I avoid the crowds and practice a bit of patience when I want to purchase a popular, just released product.
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RE: Apple: 600,000 iPhone preorders crashed systems
cj100570@... 16th Jun 2010
This story is bogus! Not the reporting but AT&T and Apple claiming they sold out. It's a pre-order. You can't sell out of what you don't have! You can take as many orders as you want and fulfill them as you get the product. This isn't Apple or AT&T's 1st dance with iPhone pre-orders. This smells of hype. They create artificial shortages to ensure people will be lined up in front of stores and to get their names in the media.
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RE: Apple: 600,000 iPhone preorders crashed systems
dheady@... 16th Jun 2010
@cj100570@... 600,000 orders of anything in one day is a good day at the bank. They can't all be google eyed Apple fan bois now can they? As for selling out of that which you 'do not have', apparently the concept of an industrial pipeline eludes you. In order to sell any quantity for a delivery date requires weeks if not months of filling that pipeline. Apple expected so many phones sold in their pre order (only a week before delivery, so those phones are currently on a dock being unloaded from a supercarrier ship somewhere on the West coast as we speak). The number of pre orders exceeded that. Further product is most likely on the next ship with more sitting on a dock in China and more being produced at the factory. Gearing up for a new product launch can be one of the most difficult ballets to manage in modern industry.
Apple is a manufacturing company whose products are exceptional. QED. But, even the best projections often are off.
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RE: Apple: 600,000 iPhone preorders crashed systems
ZayasE 16th Jun 2010
@dheady@... When you do a product launch and I have done many you don't put the pre-order date that close to the delivery date. This is Hype! What Apple is saying is "Look how many orders we got on the second day. You'd better order now before they're all gone!" It is a typical marketing ploy. Trust me when I say that Apple has enough product reserve to satisfy the market. It won't go dry anytime soon.
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RE: Apple: 600,000 iPhone preorders crashed systems
Steven@... 16th Jun 2010
@dheady@... yes. Yes. they can be all google eyed Apple fan bois. We seen it with the ipad. This is 600,000 iphone 3Gs users who have become convinced that they phone they bought 1 year ago is now obsolete.
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RE: Apple: 600,000 iPhone preorders crashed systems
bobiroc 16th Jun 2010
@cj100570@...

"...You can't sell out of what you don't have! You can take as many orders as you want and fulfill them as you get the product..."

Sure you can. Apple probably has been manufacturing these phones for some weeks or months and they have an inventory of what is made already so when they hit that inventory they are sold out until they make and distribute more. Simple logistics.
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RE: Apple: 600,000 iPhone preorders crashed systems
cj100570@... 16th Jun 2010
@bobiroc apparently you know nothing about logistics. It's a "pre-order" which means the company is taking orders for a product that they don't currently have for sale. You as a customer are reserving the product. They can't sell out because they can manufacture as many as they want to fulfill the demand and ship then when they're
available. This hype 101 being put into play to the media to talk about the iPhone. It's free advertising and priceless!
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It's a pre-order for a specific date
jgpeters 16th Jun 2010
@cj100570 They can't manufacture as many as they want and deliver them by the 24th, which is what people were pre-ordering for. The iPad may be magical, but their manufacturing facilities aren't. Yes, I know that I can get an iPhone over the coming months, but those who wanted it on the first day exceeded their capacity to produce that many units, regardless of how long they have already been making the units. This demonstrates how strong the demand is. If this many people are feverish to get it on the first day (regardless if that is logical or childish) then there are a lot more who still really want it but are willing to wait a few days to get it. Does Apple want to hype the iPhone. Sure. But even so, I do believe that they underestimated the amount of demand for the unit. But even if they planned the shortage, so what?
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RE: Apple: 600,000 iPhone preorders crashed systems
bobiroc 16th Jun 2010
@cj100570

Really? I know nothing about logistics. Do not take the word pre-order on it's own. Combine that with the expected delivery date of June 24th and that my friend is logistics. If they do not have the units made they can't deliver by the 24th which is why some are expected to get theirs weeks later. Maybe you need to take a business class or something because it is you my friend that does not understand logistics or simple supply and demand. Because in this case the demand greatly exceeded the supply. Business101.
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RE: Apple: 600,000 iPhone preorders crashed systems
hoaxoner 16th Jun 2010
@bobiroc
Lean manufacturing and lead time management strategies say that you're wrong.
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yeah, but the can't just make up that they had 600,000 pre-orders..
doctorSpoc 16th Jun 2010
@cj100570@... Apple is a public company and we would be able to find out if that is true or not..

bottom line is that by any measure 600,000 orders in one day is a lot of frig'n orders.. whether they had more supply or not.. 600,000 phones in one day is a lot of phones..
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RE: Apple: 600,000 iPhone preorders crashed systems
bobiroc Updated - 16th Jun 2010
@hoaxoner

Doesn't change the fact that you cannot ship what you have not made yet now does it? And you cannot manufacturer something that you may not have the parts to make yet now can you. So maybe those rules about manufacturing and management say I am wrong under normal conditions but the laws of space and time say that I am right. So unless they have a flux capacitor and a DeLorean and can travel time to get those parts or phones from the future or some how invent a replicator then I am right.

After all most of the complaining is because people are being told that they will get their phones a bit later than launch day. You know why..because they have to get the parts, manufacture, and ship the phones. I fail to see how this is so hard for some to understand.
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RE: Apple: 600,000 iPhone preorders crashed systems
PollyProteus 16th Jun 2010
@cj100570

I agree that you can't sell out of what you don't have in stock and I agree that this smells of hype, which is standard Apple proceedure. Almost like someone at Apple said "what's a good number to fail at? Good, Joe, now make sure to set the servers to fall down right about there so we can get some good press spin out of it".
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RE: Apple: 600,000 iPhone preorders crashed systems
bobiroc 16th Jun 2010
Wow everyone is full of conspiracy theories. Like apple doesnt want to make money. Sure you can say this is a spin to create hype but maybe it is me and I think saying we had 1,000,000 phones pre-ordered on the first day and making things smooth as possible would win over customer satisfaction and keep their loyalty better than planning a server outage and pissing people off.
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RE: Apple: 600,000 iPhone preorders crashed systems
dheady@... 16th Jun 2010
I'd say both Apple and AT&T could share the blame. While both are tech companies how many resources does one put into such a launch? Too much and you've detracted from all other aspects of your business. Does anyone think that Apple had their entire server farm devoted only to iPhone orders yesterday? Not likely. Same for AT&T. A committee made their best guess, based on past performance, on what sort of resources would be needed to fulfill the order requests. They underestimated on both counts (see my previous post). Will they lose business because of it? Not likely. Will the technogeek community have a hay day with shaking a finger at both companies? You betcha.
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RE: Apple: 600,000 iPhone preorders crashed systems
dlangshaw 16th Jun 2010
You can't order the new phone by phone either....that alone had to have created more online users at once.
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RE: Apple: 600,000 iPhone preorders crashed systems
davidhite 16th Jun 2010
Good on them for all the sales. As for the crash...it happens
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RE: Apple: 600,000 iPhone preorders crashed systems
groovygirl 16th Jun 2010
The iPhone is CRAP!!!! ...but this shows you what good marketing buys you. Everyone else needs to take note.
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Thanks for your insightful comment.
randy.baker@... 16th Jun 2010
@groovygirl
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Thanks for trotting out a worn out argument
jgpeters 16th Jun 2010
@groovygirl People who have iPhones are upgrading to new iPhones. People who didn't have iPhones are switching. Do you really want us to believe that people who have had a bad experience with their iPhones are going to spend a whole day feverishly trying to order a new one because of marketing?

Maybe you have some set of needs that the iPhone doesn't meet. Maybe you have some ideological issues with Apple as a company. But the vast majority of people who buy iPhones love the phone (even though the vast majority hate AT&T). Marketing might get some people in the door and even a few to try, but if the product doesn't work, marketing can't do crap. Do you think all those other companies don't have marketing experts on staff? They don't need to take note, you need to take a marketing class.
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RE: Apple: 600,000 iPhone preorders crashed systems
Pete "athynz" Athens 16th Jun 2010
@groovygirl Troll much?

IF the iPhone is crap then how come it's presold 600,000 units already? IF the the iPhone is crap as you claim no one would by buying it. But don't let things like sales figures and consumer satisfaction result stand in the way of your anti iPhone crusade.
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RE: Apple: 600,000 iPhone preorders crashed systems
cmbnova 16th Jun 2010
I hear Obama is appointing a commission to investigate the cause of this national crisis, plus will have a new czar to make sure it never happens again--and will be touring the server farm next week.
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Staff
RE: Apple: 600,000 iPhone preorders crashed systems
Larry Dignan 16th Jun 2010
@cmbnova classic. Yes we need a blue ribbon panel of experts to examine this issue...
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And this shows you why we need a universal ordering system
jgpeters 16th Jun 2010
@cmbnova It is simply not fair that everyone did not get to order an iPhone on the first day. If the Obama administration had been in charge of the ordering system, all 300 million americans could have placed an order for delivery on the 24th. (only to be disappointed when they actually had to wait and wait and wait...)
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Woo hoo! The iPhone 4 is HUGE, HUGE, HUGE!
jameskatt 16th Jun 2010
600,000 preorders and yet many more people wanted it.
Apple is going to sell 4 million phones on opening weekend.
Wow!
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NO! more like 40 million!
SonofaSailor 16th Jun 2010
OH BOY! I just came in my pants!
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RE: Apple: 600,000 iPhone preorders crashed systems
rhonin 16th Jun 2010
@jameskatt
and watch the infrastructure meltdown as folks try to activate those new phones..... happy
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RE: Apple: 600,000 iPhone preorders crashed systems
buddy4095 16th Jun 2010
You can also get 600 K orders if every one tried to re-order the iphone each time they got 'kicked out' of the system. . . by the time things calmed down the real pre-orders probably go down to someting like 10 k happy
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RE: Apple: 600,000 iPhone preorders crashed systems
tbln930 16th Jun 2010
Get an HTC EVO. It is a better phone and you get to dump AT&T in the process. Apple can no longer compete with a consortium of 20 large comapnies pumping money in Android.
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RE: Apple: 600,000 iPhone preorders crashed systems
bobiroc 16th Jun 2010
@tbln930

Brother has one and it is a nice phone unless you like to have battery life. Carry around that charger.

But feature for feature they have a lot to offer between both those phones. Oh and Sprint and T-Mobile do not work by my house and I am not exactly in the rural area but I can get AT&T & Verizon just fine.

So we can have a pissing match over which phone or network is better but in reality it is all just opinion based on individual user experience. I have seen my parents get screwed by verizon customer service over charges and when their phones do not work even if they bought the "insurance" and I have had nothing (outside of a couple incidences) but good service and customer service from AT&T and I have been with them since they were Cellular One in my area.
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RE: Apple: 600,000 iPhone preorders crashed systems
buddy4095 16th Jun 2010
You can also get 600 K orders if every one tried to re-order the iphone each time they got 'kicked out' of the system. . . by the time things calmed down the real pre-orders probably go down to something like 10 k happy
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RE: Apple: 600,000 iPhone preorders crashed systems
tomlin21-24319035676893835085146735905770 11th Oct
I want this text to finish my assignment even while inside college, and it's got identical nfl jerseys matter along with your subject material. Many thanks, exceptional share.

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