Apple 2.0

Covering the business that Steve Jobs built

Nexus 4 vs. iPhone 5: How (not) to manage a supply chain

November 29, 2012: 8:26 AM ET

One hot new smartphone is now "readily available" for Christmas. The other ain't.

Nexus 4 and iPhone 5

FORTUNE -- Both smartphones were highly anticipated and well-reviewed. Both were made available for online orders and quickly sold out.

But one -- Apple's (AAPL) iPhone 5 -- overcame some initial production hiccups and as of Thursday, according to Piper Jaffrey's Gene Munster, had "finally reached a point where consumers can walk into an Apple Store and walk out with a phone."

The other -- made for Google (GOOG) by LG Electronics (LGLD) as a showcase for Android 4.2 (a.k.a. Jelly Bean) -- has become an object lesson in how not to stage a roll-out in advance of the holidays.

I quote from Computerworld's JR Raphael (Google's Nexus 4 launch and the land of lost opportunity):

Selling out isn't the problem; that's relatively common with hot products in high demand. There's more to this story.

First is the way Google started the Nexus 4's sales. With no presales available, people were champing at the bit to get the phone the second orders opened up. Google initially said it'd start Nexus 4 sales on November 13th, with no specific time; later, word got out that the floodgates would open at 9 a.m. PT that day. Plenty of Android enthusiasts planned their days around that schedule to make sure they wouldn't end up empty-handed.

But then Google randomly started the sales about 15 minutes early, with no announcement and no warning. And then things really went to hell: The company's Play Store buckled under the pressure of incoming traffic and became almost unusable. Even if you managed to get a Nexus 4 in your shopping cart, the site would repeatedly hiccup and give you errors before you could check out.

Soon, Google's storefront started randomly switching between showing the phone as available and showing it as "coming soon." That level of barely-usable business went on much of the day. With enough work, you could often place an order -- but it took an awful lot of effort. I chatted with scores of people who spent hours trying to make it happen.

If only the troubles had stopped there.

After two days of silence, many of the users who managed to order devices -- myself included -- received emails from Google stating that the Nexus 4 was backordered "due to overwhelming demand" and that the phone should ship "within three weeks." There's been no official communication since. And Google's Play Store continues to show the Nexus 4 as being "sold out," with no option to place an order or be notified when more units become available.

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Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for

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