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The 5 worst supply chain screwups of 2016

Apple's physical store in San Francisco's Union Square neighborhood.
Image Credit: Jordan Novet / VentureBeat

As a rule, hardware is hard. But looking back on 2016, it’s surprising that so many of the world’s major technology companies had trouble getting their products to customers on time.

It’s almost like there was something in the water in Cupertino, Kyoto, Menlo Park, Mountain View, and Seattle that somehow screwed up demand forecasting. But it’s more likely that in each of those places, different things went wrong.

Unfortunately, it’s difficult to find out the real reasons for delays. What we typically have to go on are rumors and vague official statements. Such is life for consumers in the 21st century — corporate transparency, but only up to a certain point.

Here are overviews of, in our view, the five worst cases of gadgets coming in late this year.

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1. Apple’s AirPods

Apple's AirPods.

Above: Apple’s AirPods.

Image Credit: Jordan Novet/VentureBeat

When Apple unveiled AirPods in September, it said the wireless earphones would be available in late October. Late October came, and Apple said it needed “a little more time before AirPods are ready” for customers.

Now it’s late December — an important time of year for Apple Inc. — and AirPods are hard to find from third parties like Best Buy or at Apple’s online and brick-and-mortar stores.

Even though AirPod stock was widely reported to be low, on the first day of sales at physical Apple stores people still lined up in hopes of snagging the product, just as they do when a new iPhone comes out. At Apple’s store in Fort Worth, Texas, employees had just nine units to sell.

What happened? The Wall Street Journal cited issues with shooting sound to both earbuds simultaneously and problems playing audio on just one of them if the other is lost.

But prominent Apple blogger John Gruber noted that he had heard the delays had more to do with an “unexpected manufacturing problem at scale.”

2. Facebook’s Oculus Rift

Oculus Rift.

Above: Oculus Rift.

Image Credit: Jordan Novet/VentureBeat

Facebook start taking preorders for the first consumer version (CV1) of the Oculus Rift virtual reality (VR) headset at 8 a.m. on January 6. Within minutes, the Rift sold out. Facebook communicated that all orders other than the earliest ones would ship in May, prompting considerable frustration on the part of people who wanted their headset right away.

The first preorders did end up shipping at the end of March as planned. But in May, supply was still very limited, even as Facebook was beginning to sell the Rift in stores. Facebook didn’t finish shipping preorders until July.

The delays could certainly have to do with the fact that this was Facebook’s first time selling hardware for consumers. Oculus VR announced the first and second developer kits before Facebook acquired it in 2014.

In April, Oculus acknowledged a “component shortage” but did not specify the component that it was referring to.

Meanwhile, on Reddit, a person using the handle cvinsider had just published an extensive post claiming that the problematic component was the Xbox controller and wireless adapter that comes in the box with the Rift. This person blamed Microsoft for not delivering those products on time. The post was ultimately marked as a fake by Reddit user TheTwistgibber.

3. Nintendo’s NES Classic Edition

Nintendo's NES Classic.

Above: Nintendo’s NES Classic.

Image Credit: Jordan Novet/VentureBeat

The NES Classic, with its built-in collection of 30 vintage games, is just right for indulging in 1980s nostalgia. And darn it, it costs just $60. So practically everyone wants one. The trouble is, stores can’t keep it in stock. On eBay you can buy it now for two and a half to three times the console’s retail price.

Some people think Nintendo intentionally keeps supply from meeting demand — after all, it happened with the Wii and the Wii U. This keeps people lusting after the devices, as media outlets continue to report on shortages.

It’s not clear that the components inside the console are so unusual that they would be expected to make matters difficult — there’s just 256MB of DDR3 RAM in the thing, for example.

Nintendo is aware of the supply-demand imbalance. Last month, its American division said it’s “working hard to keep up with consumer demand.”

4. Amazon’s Echo

From left to right: Amazon Echo, Echo Dot, and Tap

Above: From left to right: Amazon Echo, Echo Dot, and Tap

Image Credit: Ken Yeung/VentureBeat

Amazon, which has been selling its own hardware since 2007 (remember the original Kindle?), is not known for problems with supply. Perhaps it has learned about the subject over the years by providing other companies’ products.

But a lot of people have said nice things about the Echo smart speaker this year, and Google validated the category by releasing a competitor called the Home. Samsung’s Harman Kardon is now also working on an Echo competitor that will use Microsoft’s Cortana virtual assistant inside.

So perhaps it shouldn’t come as a surprise that the Echo and Echo Dot were out of stock on Amazon’s website midway through December. But some of Amazon’s physical stores were carrying the Echo as of December 20 in what the Wall Street Journal called “a quirk in Amazon’s increasingly complex supply chain.”

Amazon did have a warning of sorts that demand would be strong this holiday season. Not only were Echo device sales on Thanksgiving weekend seven times higher than at the same time last year, the Echo and Echo Dot were also among the four most popular products on Amazon altogether, the company said on November 29.

“Customer response to Echo and Echo Dot has been incredibly positive, and unfortunately we are sold out on Amazon due to high demand,” an Amazon spokesperson told VentureBeat in an email. When asked whether anything caused Amazon to be unable to meet the demand the spokesperson simply responded, “Just tons of interest from customers, which we’re very grateful for.”

5. Google’s Pixel

The Google Pixel XL.

Above: The Google Pixel XL.

Image Credit: Jordan Novet/VentureBeat

Over the years, Google has had inventory issues with its LG-built Nexus 4, Motorola-built Nexus 6, and Huawei-built Nexus 6P. Plus, the Chromecast’s success has taught Google about unit sales in the millions.

Nevertheless, Google’s first-party Pixel smartphones — particularly the larger Pixel XL — were in short supply on day one in October and have gone in and out of stock since then. Some phones have arrived late.

On October 25, Google offered a statement acknowledging the troubles: “We’re thrilled to see the excitement for our new Pixel phones, and frankly pre-order demand has exceeded our expectations. We’re working to restock our inventory as soon as possible.”

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