ELi5: With the news of the new xbox and ps5 coming out soon, preorders have sold out everywhere. This happens every time a new console is released but with other electronics like new cell phones this doesn’t seem to be a problem. How come?
In: Technology
The proportion of population that owns cell phones is pretty high and their behavior is fairly well predicted. There are many competing models of cell phones, the availability of alternatives and replacement rates allow for a better prediction of demand and proportionally smaller initial “bulge” of sales. But certain models and brands have been known to be sold out especially at their initial launches. The nature of the industry though, is that there is typically enough capacity (many models/brands and factories) that supply pretty rapidly catches up. Plus manufacturers know that many buyers won’t necessarily wait for an out of stock phone when alternatives are readily available – so out of stock means lost sales.
Consoles are quite different. New models aren’t released very often and there are few alternatives. Hence, it doesn’t make sense for the manufacturer to build huge factories just to cater for the initial “bulge” in sales. If a PS5 is out of stock, most people can wait a month or two to get one. The manufacturer just delays revenue but saves a lot of money in the process.
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