I give you money, you put my name on a list, as phones come in, you ship them in the order of the names on the list. Problem solved.
Of course, that won't happen any time soon, because being sold out inexplicably generates buzz like the present article.
So take a moment and imagine you are in the product manager's shoes at Google and you're tasked with forecasting how many Nexus 4's will be needed. If you guess 'high' you end up with HP's Touchpad fiasco, or Motorola's Xoom, too much product. Since you've probably borrowed the money to buy the parts to build the stuff and you have to pay it in 90 days, you need to get stuff, sell it, and then get the money to pay off the money you borrowed.
Building a million phones like this probably costs in the neighborhood of $200M - $250M. That is a pretty sizable chunk of cash to be hanging out there 'in the float' as it were. Sloshing around that much capital is like driving a fully loaded big rig truck on a wet highway, you don't want to enter any turn with too much speed, the 'bad' outcome is really bad.
So of the two options, "leaving money on the table" because someone who wanted to buy your gear couldn't, and "missing your wall street guidance" because you're carrying inventory for longer than you wanted, the former is the much better choice. At the limit its horrible but if you're going to err, and your error bars are large, you want to err on the negative side not the positive side. On the negative side you just don't make as much money as you might have wanted to, on the positive side you don't make the margins you need to make on the product.
I mean, even the iPhone 4 has 32GB!
I ordered a Nexus 4 8GB.
I live in a 3rd-world country where 3G connections are either expensive or unreliable. Also, we don't have access to all the excellent streaming sites like Spotify or Hulu.
So yes, I need all that space for my music collection :)
I realize I'm also somewhat unusual in this respect.
You'd be surprised. Many games, these days, can take up to 1GB for program and data files. My iPhone 4 with 16GB was so maxed out, it'd often refuse to upgrade more than one app at a time because of insufficient space.
The size of the retina apps is just insane. I compiled my first app (a small music app) around the time the 3GS came out and it was only 1MB. Now, even a simple game clocks in at 30MB.
The fact of the matter is that if the Nexus 4 sold out in less than an hour, then they must not have even had stock to sell to the people that signed up for "notification".
Another thing to consider (and this was true of the Nexus 4 and later updated in the article) the article said they 'sold out' but Google didn't. The authors interpreted not being able to get to a sales page as being 'sold out' but later discovered that there was some order rate management going on where the 'overflow' went to the 'coming soon' page and repeated attempts would eventually get you a page you could order from.
Logistics management is a tricky thing, if you are good at it you can pretty much name your own salary because its trivially easy to 'show' how much you are worth with basic accounting techniques. If the company has the volume you can literally say "If you hire me I'll save you $700,000 a year, I'll actually save you $1,000,000 a year but I'm going to keep $300,000 of it as salary."
Google is crafting buzz like Apple is doing with the queues at the Apple store or their irritating "reserve your iPhone" that in reality does not reserve anything. A difference though, if you don't want to bother, you can simply order online and it get it delivered the old boring way once it is back in stock. The Nexus can only be bought online.
(disclaimer: a bit bitter after having tried to buy a Nexus 4 today)
They could just as well have component supply problems.
They could also want to control the amount of unearned revenue on their books.
Not exactly difficult.
I can log in to any bank and it'll tell me within a few moments of when a charge was made.
No you can't; that's exactly the issue. Most people don't know the difference between an authorization and a charge. What you see on online banking as "pending charges" or "holds" are authorizations. No money has moved hands -- your bank balance has not gone down, the merchant's bank balance has not gone up, there's not even an in-flight ACH somewhere yet to be processed.
Literally all these entries on your online banking represent is a message of intent from the merchant to charge that much to your card in the near future. Even your bank does not yet know if the merchant actually captured the funds and they'll be settled (the money will move) soon or if they only performed the authorization. They could void the authorization or let it expire itself without ever charging the card.
Hence the comment -- even if Google only performs an authorization, it looks to the customer like they paid, and the bank won't tell the customer otherwise. That makes using authorizations to hold preorders untenable from a customer service standpoint even if it were technically possible, which it really isn't due to the short period authorizations are valid outside the hotel, travel and rental industries.
The fastest your bank could possibly show a charge I make to it right now is tomorrow. Most will take longer than that. If it's near a weekend, it could take 3 or more calendar days. The authorization can show up immediately, the charge cannot.
Authorizations happen in real-time over the card networks. Settlements, where the charges get recorded and the funds actually move, happen in daily batches (or even less often).
In the meantime, customers assume they have paid for something, because they see it in the pending charges or holds list, whether funds were captured or not. Again, refer to previous comments on why that makes authorizing cards for the full amount of preorders problematic.
If you're running a brick and mortar store, you want to serve the customers who are there now. That means not cannibalizing your inventory by mailing to someone who ordered last week. You also want people to come back to your store.
It is irrational for the store to mail you one when it comes in stock, though they should have a web-based corporate distributor that they can direct you to.
In light of that, no, we don't really have the technology to automate all of those business decisions (especially so early in the product lifespan) and give a precise prediction about when a consumer can expect the product with acceptable reliability. There are too many factors that can delay delivery by a day or two, and accuracy within a day is extremely important for good customer service.
For a mass-market phone like this "It'll get there when it gets there!' is not an acceptable response to people who need a phone right now, or in the very near future. This isn't a raspberry pi.
There's no use pretending that high tech supply chain management is a simple process, and any hickups are really just ploys for media hype.
I think the most people are not upset they sold out, but upset that:
a) Many of them did put in the effort to get up (or stay up) and get there in time, and had to suffer checkout issues.
b) There is no Plan B, nor any other information coming out of Google. They are forced to go round the merry-go-round of refreshing the Play Store and waiting and waiting to see something change.
Most people just want to say "I want this, take my money when you can" and forget about it. It shouldn't take so much effort to give a company your money.
Put it this way - I'm sure it won't remain "sold out" (inaccessible to purchase) for long...
It's a PR/Marketing ploy, a good one and if I was in Google's shoes it's exactly what I would be doing too.
Anyone who thinks this is Google's coders not able to take a credit card and put you on a wait-list isn't thinking outside the box.
Especially bookstores, what few record stores still exist, some clothing stores, hardware stores, and more.
This is actually my preferred form of shopping. I don't care for online purchases generally, shipping and returns are a hassle (you have to be there for it, there's always the question of refunds getting properly processed, and there is simply no online presentation which is as comprehensive as having the product in your hands to assess its qualities).
For electronics, which are readily produced, it's a real sham if you aren't able to do this.
Even right now I bet Google is scrambling to find enough chip vendors for another production run of the phones as well as trying to scramble up the transportation and labor for putting them together.
This is open to abuse; if something's that heavily in demand, fake buyers will put their names down en masse and then resell them elsewhere and make a profit while honest consumers lose out.
On a serious note, I think this is more of a marketing gimmick than a tech issue. Also like having very limited quantities and proclaiming "we're sold out". Not saying that is the case here though.
Plus it's amazing marketing to be "selling out" of your product.