Market research is not as precise as people like to think.
Apple probably did research and came back with a range of possible demand. Based on that range, they had to decide whether to build enough to meet the highest likely demand, or to build fewer.
The advantages of building fewer are:
- quicker to market
- lower potential costs if sales are poor
The advantages of building more are:
- greater potential quick revenue if sales are strong
Apple cannot build more iPads per day than they can receive screens per day (and other components, but screens are believed to be the bottleneck).
They are probably at pretty close to the max, if not the max, so the easiest way to have better supplies at launch would have been to delay launch.
The other option would be paying a greater than linear amount to get the supplier to ramp up production (in some cases, this can require buying or building a new assembly line) and then ramp up iPad production (which again may require buying or building an assembly line). It doesn't necessarily cost 20% more to build 20% more iPads, it may cost 50% more.
So if you make too many, you probably delay launch and you certainly lose money you've invested in parts and manufacturing.
If you make too few, you end up with people clamoring for the device (which is good) but unable to hand you their money until the device shows up (which is bad).
In that scenario, the smartest option is to bet on medium to low sales relative to your projections, because it's less painful to deal with being wrong than if you overbuild. In fact, it's arguably a positive, as it helps create buzz and a sense of a successful product launch.
