Three Guys and a Podcast

Three Guys and a Podcast: Apple News & Analysis

April 08, 2011 at 12:30am Pacific Time
by: Mark Reschke
Categories: News, Products
tagged: Best, Buy, iPad, 2, Apple, Timothy, Cook

0On Thursday TechCrunch's Devin Coldewey reported that Best Buy would no longer be receiving shipments of iPad 2's due to the Best Buy withholding iPad 2's for sale after they had reached an internal day's sales quota.

TechCrunch claims the news comes from a tipster within the Best Buy chain who is highly likely to be delivering accurate information. Coldewey was told that Apple COO Timothy Cook is working to revolve this issue. Cook's involvement would indicate this is not an isolated innocent by a single Best Buy store, but a practice implemented on large scale. Yet the question remains, “Why do this?“ It seems counterintuitive to withhold sales, but there are two reasons Best Buy would implement such a policy.

Best Buy would withhold sales for the purposes of having at least some inventory on Sunday and perhaps Monday — days that Apple and others Apple resellers typically are out of iPad 2 inventory. Best Buy would have iPads on these days and be able to drive more traffic into their stores as a result.

But the largest motivation Best Buy would have in holding iPad 2 inventory from being sold is a pernicious motivation to drive customers back into their stores day after day after day. Driving people into your establishment creates habit, familiarity, and hopefully sells other products along the way. Since Apple does not give resellers great margin on their products, the main reason to carry Apple inventory is to generate store traffic in order to sell Apple related goods and other items, not so much just to sell an Apple device.

Whether this issue will be resolved quickly or become a control war between Apple and Best Buy has yet to be seen. That said, it has the potential to quickly escalate between the two companies, which would not serve either well. If it does escalate, it will be clear that both Apple and Best Buy have lost focus on the most important piece of the puzzle — the customer.

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