Lessons From Apple & Pi Raspberry Pi

Barbara Jorgensen, EBN Community Editor

It has happened twice in as many weeks -- underestimated demand for a product has resulted in "Sold Out" notices being posted everywhere. The first product to suffer this fate was the $35 Raspberry Pi computer. The second was the new $500 iPad.

Only one company has a legitimate excuse for being so wrong.

The Raspberry Pi Foundation, a tiny charitable operation, is in the business of spreading technology, rather than selling it. It had never really launched a product before. The foundation chose two global distributors, Premier Farnell and RS Components, to handle the initial orders. The device sold out within hours. (See: Distributors Sell Out of Raspberry Pi in Hours.)

Apple Inc. (Nasdaq: AAPL) is a $500 billion company in the business of selling technology products. It has been manufacturing and selling devices for more than 25 years. It has a cadre of supply chain experts, planners, operations managers, and sales and marketing gurus. It has released dozens of products over the years. It owns its own set of retail stores and distributes through global outlets such as Best Buy. The new iPad also sold out within hours. (See: Apple Watch: When Failure Equals Success.)

Both companies cited "unprecedented demand" as the reason for their shortfalls. I can see that happening if a company is only a couple of years old, focuses on education, has no experience in the supply chain, and partners with two industrial distributors that don't do a lot of retail business. Even they were caught off guard.

But let's say you are a company whose CEO used to run your supply chain. You have hundreds of suppliers, and there are no widespread product shortages. You have thousands of employees poised to build your products with a moment's notice. And you share forecasting information not only with your upstream suppliers, but also with your downstream partners. Oh, yeah. You also own retail stores, so you have some experience with supply and demand.

And yet you can't predict demand for a product already on its third iteration? Please.

I give Apple credit for releasing product after product that wows the market. I also give it credit for maintaining its quality, premium pricing, and reputation. I live in a capitalist society, so I'm also in favor of Apple making as much money as it can. But underestimating a forecast? Again? You've got to be kidding.