Yes, they have been on sale for only two months but refurbished iPhones are now available for purchase on Apple's Web site.
You can get both versions at a US$100 discount with free shipping. That puts the 8GB model at US$499--17 percent off the original price--and the 4GB model at US$399--21 percent off. All the features are the same including that required AT&T two-year contract, unless that is, you can get around it.
While the US$100 discount may be good news to wannabe iPhone owners with smaller budgets, it sparks a interesting question. Just where are the refurbished iPhones coming from? Is Apple getting enough returns so they can resell them at such a volume so soon after the phone's release? Or are Apple employees refusing their free iPhones? Or is this just a clever marketing trick, the kind at which Apples excels? I bet on the latter.
This article first appeared as a blog entry at News.com.
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Apple's iPhones most probably are acceptable quality controlled pre-production run models that were built when the company was learning how to assemble their product and train workers. Although the yield - percentage of good versus bad products - starts off relatively low, this rises until management are happy they can make sufficient numbers of good ones and keep their costs low. Test boxes are used to check phones and find defects. As producers learn to make their products more reliably, the number of defects-per-unit falls until first time pass rates are about 88percent. At that point, they are prepared to launch/release the product. Bear in mind that most computer producers have a yield of around 70-80percent first time pass rate! That means one in five at least are fixed in the factory just after being put together. Sampling will likely have been undertaken at distributors, who are 'last chance filters' before batches are distributed to stores. If more than a given number are found to be defective, the batches will be returned to the plant for re-opening and re-testing. Any reworked (repaired inside the assembly plant) units probably will be considered 'seconds' and have been released as 'refurbished' - another word used in reverse logistics talk to express a state of being up-graded. In effect, most of the refurbished products simply were not accepted by distributors because they had inspected and found more than an acceptable percentage of defective goods per batch.
Phones fail because of dust inside the product under the window, faulty connectors, user interface failures – pic-cells not working, buttons that stick down or don’t work, and bad batteries and not recognising authorised chargers. Sales packs may miss parts, wrong plugs on adapters – US plugs in European sales packs for example.
Posted by Dr David J. Newlands on Tuesday, August 28 2007 09:01 PM