“Shares of Apple Inc. took a hit Tuesday morning after wireless carrier AT&T issued disappointing activation numbers for the iPhone for the last two days of the second quarter, when the device first went on sale,” Dan Gallagher reports for MarketWatch.
“In addition, a telecommunications analyst issued a report before the opening bell that said demand for the device at retail outlets has seen a ‘significant decline’ in recent days,” Gallagher reports.
“The iPhone went on sale at retail outlets operated by Apple and AT&T on June 29, leaving less than two full days before the end of the second quarter,” Gallagher reports.
“AT&T said it activated about 146,000 customers who bought the iPhone during those two days,” Gallagher reports. “Before Tuesday, analysts had been projecting opening-weekend sales for the iPhone of between 200,000 and 400,000 units. A few projections reached as high as 500,000 units…”
“‘We have noticed decent inventories [of the iPhone] at stores, and thin demand at best,’ analyst Ittai Kidron of CIBC World Markets wrote in a report Tuesday. ‘In fact, most Apple store visitors were not looking at the device and only a very small subset bought it,'” Gallagher reports.
“Investors will likely get a fuller picture of actual iPhone sales when Apple posts its own results for the June quarter on Wednesday,” Gallagher reports.
Full article here.
Now, after the typical hysterical Wall St. reaction, let’s apply some logic to the information.
AT&T’s quarter ended June 30, 2007. Apple’s iPhone went on sale in the U.S. on Friday, June 29th at 6pm local time. So, the totals are for about a day and a half, not two days, as widely reported. And when did AT&T actually stop their iPhone activation count exactly?
[UPDATE: 1:29pm EDT: An AT&T internal newsletter states, “Although it went on sale just 30 hours before the quarter ended, we had 146,000 activations in that period.” So, 30 hours, not 48. – Thanks, Robert.]
In addition, AT&T’s numbers measure only iPhone activations through June 30th, not sales. Some number of iPhone users experienced activation delays that may have delayed activation until after the June 30th end of AT&T’s quarter.
How many? We don’t know.
What of the iPhones that were sold online that weren’t activated by June 30th?
How many? We don’t know.
In the initial lines were many enthusiastic iPhone buyers. Reports from MacDailyNews readers (and also witnessed by MDN staff) show that many of these early iPhone buyers purchased two phones (Apple’s limit at Apple Retail Stores). When we asked fellow iPhone-waiters what they would be doing with their iPhones, many who were buying two stated that the other phone was intended as a gift. These iPhone gifts may not have been given to their recipients and activated by June 30th; therefore, they wouldn’t appear in AT&T’s provided count.
How many? We don’t know.
It should be obvious that iPhone sales would see “significant decline in recent days” as the initial frenzy of camping out and long waiting lines had set the bar at its highest point. Decline is a given after the long lines are served and the stanchions are removed.
Describing inventories as “decent” is a meaningless measure as Apple has never reported how many iPhones were manufactured and shipped for the initial supply. Based on reports and Apple’s own online resource for iPhone availability, Apple seems to have done a good job of keeping supplies of iPhones flowing and Apple retail stores, at least, resupplied on a regular basis. We don’t know how many iPhone units Apple supplied, so saying inventory is “decent” tells us absolutely nothing about the product’s actual unit sales.
And just how extensive were CIBC’s “checks?” They certainly don’t match our experiences of iPhone interest at Apple Retail Stores (and “on the street” with our iPhones) in recent weeks.
The analysts’ projections (200,0000 – 500,000) are for the entire weekend of iPhone sales, not the first 30 hours of activations.
Need more input, Stephanie.
As Gallagher mentioned in his report, we hope to get better idea of initial iPhone numbers when Apple reports their Q3 07 results (ended June 30, 2007) after market close tomorrow.
Remember this,
These numbers only reflect what was counted at the time of closure at the quarter end.
excluding are:
2 percent had problems directly activating due to demand
Those with zip codes different than where the phone number was activated with a different carrier-thus no activation.
Those that had to learn how to activate-needing to download iTunes, install, and activate (minus any other of the above problems)
As mentioned in earlier by people- those given as gifts
The amount ordered online and noway to activate until receipt.
And the fact that the stores sold out of 8 gig units and 4 gig just would not do.
The fact that stores did sell out- just could not sell anymore to activate.
Even Manhattan Village was selling out early in the morning even after a week, which required standing in line around six in the morning to get an 8 gig. Hey, delayed demand!
But just 149,000 units in about a day of normal operation…. not bad!
Others have any other ideas?
Only 146,000, after all that hype?
How embarrassing.
CIBC: as a bank, they were up Enron’s cornhole bigtime, and they paid the price financially, and as a bank they are one of the more execreble examples here in Canada, where they are based. My family has boycotted them and everything about them for over 50 years. They Suck! I take all utterances from any of their corporate organs, as not worth the TP they are scribbled on.
Another thing that noone has pointed out:
Now that I know that Apple is capbable of keeping supply steady, I’ll take my time about getting one. After the day 1, 2, 3 hype settled down, it’s now more of a leisure purchase than an immediate, frantic, obsession.
I’ll mosey on in sometime in August. No hurry. There are still a lot of folks waiting for their current contracts to expire.
They tidal wave has hit, but the water level is rising steadily.
If 2000 actual stores combined averaged together 70 phones sold for Friday night and all day Saturday, just that would equal 140,000 units. 1800 AT&T stores were mostly sold out, and let’s say each AT&T store got 50 phones apiece on average. That is close to 90,000 units just at AT&T stores,
and noone can tell me that the Apple Stores only sold 50,000 units.
Something is REALLY WRONG with these numbers, even with activation problems due to volume. There were hundreds in line just at the Apple Stores.
Many of the Apple Stores were sold out.
FISHY, FISHY, FISHY, folks.
Cramer and his Cronies are gonna say they were right, but anyone who does their homework, and Cramer’s Cronies didn’t, would sit on AAPL, while the Jackass sheep sold their shares and will pay their taxes.
“There are three types of lies – lies, damn lies, and statistics.” — B Disraeli.
The AT&T numbers have no meaningful context, ergo, nothing can be discerned.
Remember, “Waiting is fullness,” says Valentine Michael Smith (— R Heinlein).
They say iPhone sales numbers are slowing…well, when you average 140,000 units the first two days, that would mean what?…51,100,000 units a year? I would say sales are slowing based on those numbers or less. Headlines always leave out a portion of the truth! Numbers are down, but down from what astronomical number in the cell phone industry? We’ve got abunch of bozo’s trading, folks.
@ChrissyOne… Yeah, but I like Short Circuit! Needing more “input” has become a standard in some circles since the movie. I certainly use it myself! MDN’s Take reminds me that I’d like to find my copy and see it again!
Well, that’s my input, Stephanie.
BUY, BUY, BUY!
As I said three hours ago: buy puts. Y’all should have listened.
The chickens have come home to roost.
It’s a good time to buy Apple stock. Can’t wait to see the numbers from Apple (i.e. a competent source) as opposed to American Telephone & Telegraph. Dinosaurs aren’t considered to be the most intelligent of creatures.
What an interesting time to be alive and involved! Congress is acting to free the consumer’s phones and to set aside some public portion of the new 700mz spectrum in the “iPhone hearings” due to the “Free the iPhone” folks.
Phone manufacturers are rushing to introduce new “iPhone killers” with more features. RIM has rushed out a dual-use phone to take advantage on newly opened web freedom. Web 2.0 developers are steadily pumping out new applications for Safari and the iPhone, and the business security objections are being steadily diminished. Hackers are working overtime to test out the new iPhone and ultimately improve the security.
Carriers are seeing their oligopoly in selling music, IM minutes, video and data-minutes threatened by the new side-loading capabilities. The iPhone has given new public awareness and support for implementing faster and better wireless networks and called attention to the US situation vs. the European and Asian increased capabilities.
Whether the Stock Analysists, the IT crowd and the MS defenders or the Apple loyalists and the ordinary non-IT consumers will prevail…the stuggle is on. Books will be written, either way.
Hmm, let’s see. 146,000 phones in 30 hours equals 4867 phones per hour times 24 hours equals 116,800 phones per day times 365 days equals 42,632,000 per year. A very rough extrapolation, indeed, but I think Apple will very much exceed their goal of 10,000,000 iPhones by the end of 2008.
MW: only, as in only time will tell.
AT&T didn’t have the Faith! The AT&T store where I bought my iPhone had less than 50 phones to sell. Many reports were coming in that many AT&T stores had only 20! I was at the counter one hour after the AT&T store closed and they were OUT! I paid for an 8GB iPhone and got it delivered on the following Tuesday. The Apple Stores were doing their best to distribute iPhones but with AT&T not having the Faith to stock more, it drastically reduced the outlets where one could walk out with an iPhone on the first weekend of its introduction. I think we’ll see some impressive numbers coming from Apple tomorrow.
$135?! Damn, I wish I had some cash lying around.
Interesting that Apple is getting slammed for having sufficient supply, after years of getting slammed for the opposite.
stocks don’t go straight up. I cut my position in half today. I do plan to buy it back later, but I’m in no rush. I really do believe we’re headed to 180-200. But not straight there.
Basically either try to work volatility as your friend or ignore it. The key is to not be that last seller when the stock makes an intermediate correction bottom at $110 or $95.
The number from AT&T is sold for the future of the phone btw. This is all about stock trading. Stock trading is all about the other traders, their fear and greed, and controlling your own fear and greed.
Ooops. I mean OMG it’s a disaster. Shark! Everybody out of the pool NOW. It’s going back down to $60. SJ will be settle with the DOJ and resign next week!!! Sell while you can! (Okay so nobody here is going to be the fool to sell me my shares back at $110, are you?)
No game like it.
MW: fire… fire sale?
In any way, shape or form, MDN should obey the wise words from MDN.
Friday, July 20, 2007 – 08:52 PM EDT
MacDailyNews Take: Moral of the story: In any way, shape, or form, STFU until you know WTF you’re talking about.
Tuesday, July 24, 2007 – 12:56 PM EDT
MacDailyNews Take:
…
How many? We don’t know.
…
How many? We don’t know.
…
How many? We don’t know.
I don’t have my iphone. I will definitely buy one someday. But I have 2 contract cancellation fees I’d have to pay. Unfortunately I re-upped with Sprint shortly before the announcment. My point is just I don’t think I’m unique. Adoption of iphone will be slowed by cancellation penalties. But LT I will ABSOLUTELY have one. The fact that Sprint has me by the short ones kind of makes me dedicated to dropping them.
Another way of looking at this, is that as time goes on and people’s contracts expire, it’s an automatic price cut in the phone.
It could look a lot like ipod…
Friction in adoption will not hurt the iphone or Apple long-term. But it could create stock “buying opportunities”.
I bought my iPhone the day it came out, June 29th, and attempted to activate the phone that night.
My phone was not actually activated until July 1st, thanks to what I understand is a byzantine conflict between my previous data plan and the data plan required for the iPhone: my previous data plan had a certain cap, and they had to cancel that data plan before activating the new one. Took AT&T a couple days to figure that out.
I don’t doubt that the number of activations in the first two days of the release is less than the number of sales by a factor of 10, for reasons such as this one and others mentioned above.
I bought my iPhone last Friday in the Apple Store at the Fashion Show Mall in Las Vegas, NV. The store was packed and every iPhone they had on display was being handled by one or more customers.
Store clerks did say they had plenty of iPhones in stock, but gave indication that was because of reduced or low demand.
I actually waited a few days before activating my phone in order to get my contacts, calendar, playlists, etc. in order to ease the transition from my present cell to the iPhone, and just to savor the moment, draw it out for a little before diving into actual use.
I wouldn’t be surprised if others did the same?
Wow. So many news articles with iPhone being a flop. Over 200 articles already.
two things…
1) MDN say’s “MAY be misleading” operative word, “MAY”…146,000 activations, I’d say that’s WAY FAR OFF from any 1 million or 500,000 (for that matter) mark as many have suggested…now granted, I bought myself a iPhone and I LOVE IT! So I’m not bashing. However, some people, I think deliberately set us up for “failure”, reverse FUD?
2) This might be a stock buying oppurtunity.
oh and btw, my iPhone activated without a hitch!
I can balance out Diz’s sample set as there are quite a few software engineers at my work who have swapped out their WM5 phones for iPhones.