“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.
Of course, you could always wait until tomorrow to find out what the sales figures really are. I’m guessing they’ll be in line with original estimates, i.e. 150-250,000.
And I don’t think the article is FUD considering that’s actually what AT&T activated. Honestly, grow up people.
146,000 activated by the close of the quarter. IF we assume that activations on Sunday equaled 2/3 of the activations on Friday night and Saturday, that would make the total number of weekend activations 243000, or there-abouts.
Sounds pretty good to me. Right at a Quarter of a million activations in one weekend.
I wonder what the first full week’s sales+activations figures were? We wont get them tomorrow … I doubt we will, but one never quite knows what the report will include other than the strict Quarterly report. However, if we arbitrarily assume that buying continued for that first week on the level of Sunday’s sales and activations (and remember, the 4th of July fell mid-week, so there’s your fudge factor right there), that would come to an additional 435,000 activations for Monday – Friday at 6 pm. By my math, that means that the first week’s activations should total somewhere around 650,000 – 700,000. I wonder if, when all is said and done, that’s the ballpark for the first week’s activation figures, with the first week’s total SALES (including the internet Apple Store sales) being somewhere in the neighborhood of 1 million? Even if such turns out to be the case, I doubt — seriously doubt — that such will shut up the Apple Haters.
I bought my iPhone on Monday, July 2. I activated it that same day. I stood in a reasonable, 15 minute long line to buy mine, even though I went to the store at 2:30 pm (I had been warned to come early in order to miss the business buyers). Even though I was there mid-day the store was packed with people flocking around the table to see the iPhone and the store was nearly out of 8 GB iPhones, with the post 5:30 pm crowd still to show up. I asked the Genius who helped me and he said that they had sold out Friday, Saturday, and Sunday, of ALL units, and that they expected to sell out every day that week. I have no reason to think they didn’t.
The only numbers that count are those released by apple tomorrow. In fact apple losing 6 points today would provide a buying opportunity before apple stock soars.
CIBC is a Canadian Bank – The Canadian Imperialist Bank of Commerce.The analyst probably went to the local Apple store and correctly observed no one one was paying any attention to iPhone. – cause its not even sold in Canada eh.
Analyst, reporters want to talk about the iPhone because its “happening”, some of these a-holes hate Apple, some hate Apple users, some hate themselves, some have nothing to say, so they spew shit; See, I can write without responsibility too!
“Nobody is even paying attention to iPhone”, now that one is total BS, personally I don’t want to by it, but I sure as hell want to touch and see it for free!!!
RE: diz/Macman
Please remember that engineers are not really representative of AAPL’s core demographic. Not to dIsrespect, but there pretty much a MS-Windows group, simply due to the fact that there is so little quality Mac engineering software. I’d be shocked to find just one of the engineers I work with that had an iPhone.
if they dont have enough product to meet initial demand they are condemed if they do have enough product they are called a failure. And the stock price dropped all the way back to where it was last week! Oh the horror!
I have tons of Apple hardware at my place, including enough parts to build four complete PM8500 systems, an blue & white G3, a beige G3, two Quadra 840av’s, a tangerine CRT iMac, a grey & white G4, an iBook, and a three week new Intel Mac Mini.
I have no plans to buy an iPhone. Unlike my other Apple hardware, to me the iPhone just looks like something that will wind up in the landfill three years from now. Rather spend the money on something else, like a car payment.
Agreeing with ChrissyOne here – you’ve sure identified yourself as a child of the eighties.
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MDN magic word – Thirty (years ago, almost)
How is nearly 150,000 activations in 30 hours a dissapointment?? Everyone knows AT&T had major issues with activations, with some people waiting over 24 hours…that means, retards, that a MINIMUM of 150,000 $500+ devices sold in a friggin’ DAY. That’s $75,000,000 in revenue in ONE DAY. Just on the iPhone. At a MINIMUM.
MDN MW – “kind”, as in “Wall St. was not kind to Apple yesterday…”
Lets apply a little teensy bit of criticality to our journalism, if that’s not an impossibility today. Everyone keeps blindly repeating this CIBC “analyst” Ittai Kidron as if there is some legitimacy to his claims.
Kidron,
1. performs his analysis for a Canadian company
2. normally covers RIMM
3. never covers Apple (until now)
4. RIMM is a Canadian company
5. RIMM is a competitor to Apples iPhone
6. Provides no empirical support for his claims
Duhhhhhh, what do you think is going on here? And yet, the FUD is spread all over the net and evening news broadcasts as if it is fact.
HYPERREALITY in action (see wikipedia)
146,000 activations … but 270,000 sales. In 30 hours.
WHAMMMMMMMM
So much for the nay-sayers.