Apple's iPhone Announcement is a Big Deal for T-Mobile

Every year, we are treated to a big show from Apple about what the next iPhone will be like, and how magical it actually is. In case you have been living under a rock, this major Apple annoucement is one of the largest news-making fancy press-conferences you will see these days. It used to be this way when Microsoft would launch a new operating system, remember that launch announcement and launch party for Windows XP? What about for Windows 8? Oh yeah, these announcements are only a big deal when you are the dominant force in the marketplace instead of trying to play catch-up in all areas because your technology is old.

When a company like Apple has an announcement like the new iPhone 6 and iPhone 6 Plus, it reminds me of how different the world is for physical products and software applications and operating systems. If you missed it, Apple made iOS 8 available for free to everyone as of September 17, 2014. The reason that everyone with a compatible iDevice was able to attempt to download and install iOS 8 on the day it was launched is due to the very nature of software distribution online. Adding one more customer downloading and installing your software costs you nothing. Adding millions upon millions of users downloading and installing your software only costs you your hosting and bandwidth fees to deliver the software, and nothing additional to make more “copies” of the software. Hence, Apple uses new device revenue as the method to finance development of its operating systems, allowing it to give away most of its software for the low, low price of free.

Hardware, on the other hand is not so easily multiplied. A recent story about the iPhone 6 and iPhone 6 Plus Foxcon factories indicates that they are producing about 400,000 new iPhones daily. When you realize that Apple sold 4,000,000 new iPhone 6 and iPhone 6 Plus devices in the first 24 hours of pre-order availability, the sobering fact that it will take 10 days for that many devices to be manufactured starts to hit home. As of yet, Apple has not released updated sales numbers for their flagship devices, but you can bet it will take several more weeks to assemble the iPhones that were sold during the pre-order period.

When you effectively require your customers to order hardware online, like T-Mobile does, one of the things you have to be extremely sensitive about is how well your online systems perform under extreme load scenarios. September 12, 2014 was one such extreme load scenarios for T-Mobile, as the iPhone 6 and iPhone 6 Plus pre-order periods began, slowing T-Mobile systems to a halt, forcing their Technology staff to take portions of the website offline until they could remedy an issue that presented itself under the load. Unfortunately for T-Mobile and Apple, there was untold dollars of lost revenue, not to mention the increased expenses to correct the issues that presented themselves. When a new iPhone reaches its pre-order period, T-Mobile and other carriers should do everything in their power to over-estimate the load their systems will see, add a large factor of safety, do it again, and then use that amount of IT infrastructure going into the big day. It may cost a bit in fixed costs for a short amount of time, it will at least defray bad customer service experiences and lost revenue.