FUD Alert: CNET article based on lone analyst’s view tries to gin up iPhone demand issue

“Is demand for the iPhone in America already starting to wane?” Tom Krazit asks for none other than CNET, of course.

“AT&T, the exclusive American carrier of the iPhone, activated just 900,000 iPhones during the fourth quarter, the company revealed during its earnings conference call Thursday. It wrapped up the year with ‘just at or slightly under 2 million iPhone customers,’ according to company executives,” Krazit reports.

“Apple announced at Macworld that it has sold 4 million iPhones through the middle of January, and Toni Sacconaghi, a financial analyst with Sanford C. Bernstein, thinks the gap between the figures means that Apple might have a demand problem. He released a research note Thursday after AT&T’s earnings saying that the carrier’s figures imply that an awful lot of inventory is building up at Apple’s channel partners,” Krazit reports.

“Apple said on Tuesday that it sold 3.7 million iPhones in 2007. But AT&T said Thursday that it ended 2007 with around 2 million iPhone customers,” Krazit reports.

“According to Sacconaghi, even if you assume 20 percent of all iPhones purchased in 2007 were bought with the intention of unlocking–which was Cook’s rough estimate in October–that still leaves 670,000 iPhones unaccounted for in 2007. Where are they? Apparently, they’re on a shelf somewhere,” Krazit reports.

Full article here.

[Thanks to MacDailyNews Reader “Bruce” for the heads up.]

Krazit bases his “report” on a single analyst’s B.S. theory for which there is no factual basis. Unless you’re an major Apple executive and you know the inventory in the channel (not public information), there is simply no way to know how many phones have been sold with the intent to unlock. Period.

Apple CFO Peter Oppenheimer, during the company’s conference call (which is subject to S.E.C. scrutiny, we might add) on Tuesday, stated publicly that:
• Apple is “very confident” of hitting 10 million iPhone goal for 2008
• Apple sees iPhone unlocking as a “good problem to have” and is a sign of iPhone’s popularity
• Apple is “very happy with all of the iPhone launches so far” (U.S., UK, France, Germany)
• With 4 million iPhones to date; Apple “very happy with iPhone momentum”

In addition, for much of the time that iPhone has been on sale, Apple has had to limit iPhone units per person (usually 2 units max.) and payment methods (credit card only) in order to curb rampant iPhone purchases by would-be unlockers.

There are 670,000 iPhones unaccounted for in 2007. Where are they? Apparently, they’re all over the world, unlocked, and in use. (See, we can also make up stuff that has just as much factual basis (none; although ours is likely closer to the truth) as “reports” from CNET that are based on one analyst’s interpretation.)


  1. I think Apple has done a good job of keeping the roll out steady, and adding features a bit at a time enables them to maintain a quality control that is imperative to phone service.

    People demand reliability from a phone, especially a $400.00 one.

    Had they tried to put the iPhone on the market as the do-all machine, I imagine there would have been many more glitches. Not good for your name when breaking into a new market.

    My point here is that as more features are added and software made available, the iPhone will become even more desirable as its functionality becomes more obvious, and that will be reflected in a continued growth in sales.

    I’m sure Apple will use the same method of slowing production runs and allowing inventory to decrease as they prepare to ramp up to a new model or set features, as they do with their computer lines.

    This will invariably cause analyst to scream “slowdown” for demand.

    3G and videoconferencing, anyone?

  2. > Apparently, they’re all over the world, unlocked, and in use.

    They certainly are all over the world; I’ve seen about a couple of dozen in countries where the iPhone is not officially sold. All one needs is a friend in a country where it is officially sold….

  3. I have at least five friends using iphone and saw dozens of them here in Hong Kong. It’s sold for more than five hundred bucks in a lots of shops, unlocked already of course. So you don’t need a friend to own an iphone.

  4. oppenheimer also said, that a large number of iPhones had been given as a present for christmas and have not yet been activated due to ongoing contracts people have with other carriers. so it will take some time before their old contract ends or is canceld and they activate their new shiny phone with At&t;.

  5. I was behind a woman working for Nokia while queuing for the keynote address. She said her company sent her there and paid for all expense. No doubt Nokia and other phone companies purchased quite a number of them.

  6. Tis the season.

    Whatever happened to those fella’s last year–late summer/early autumn–who claimed that they had it on good authority that the iPhone multitouch screens were faulty and would all start dying in 4-6 months? I don’t think it turned out like that.

    It must be great to be paid for trafficking groundless speculation.

  7. Since there are now dozens of phones that do everything that Steve’s phone does, and at considerably lower cost, there’s every reason to believe this.

    Prettier, over-hyped, sucker bait – yes. Better? Nope.

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