Apple Inc.’s initial iPhone sales may have beat analysts’ top projections, suggesting Chief Executive Officer Steve Jobs will reach his goal of making mobile phones as profitable to the company as computers and the iPod.
Shoppers bought as many as 500,000 units over the weekend, Piper Jaffray analyst Gene Munster said, more than twice his projection of 200,000. J.P. Morgan Securities Inc. analyst Bill Shope estimated sales were 312,000. Before the phone’s debut analysts expected Apple to sell 50,000 to 200,000 units.
More than a third of Apple stores were out of stock by last night, according to its Web site, forcing shoppers in states such as Hawaii and Utah to try AT&T Inc. stores. The company, the exclusive provider of wireless service for the iPhone, said most of its 1,800 stores sold out within 24 hours.
“This is a very successfully handled launch,” Munster said in an interview today. “The real sign of success would be what kind of legs this product has in 2008 and 2009. In 2009, we estimate a third of Apple’s sales will be from iPhone. This is a huge product.” Shares of Apple fell $1.17 to $120.87 at 10:51 a.m. New York time in Nasdaq Stock Market trading.
Mark Siegel, a spokesman for San Antonio-based AT&T, declined yesterday to confirm whether stores had completely sold out of the device, saying only that “things have just gone extraordinarily well.” Steve Dowling, a spokesman for Cupertino, California-based Apple, didn’t return a call seeking comment before regular business hours.
AT&T Fixes AT&T is still fixing problems for some customers who can’t activate their new phones, Siegel said today in an interview. Some business customers need approval from their companies’ communications departments to switch to personal subscriptions, he said. The “overwhelming majority” have activated the phone.
Siegel declined to say how many iPhones the company has sold or how many switched to AT&T from other service providers. AT&T’s calling plans for the phone cost $60 to $220 a month.
Sales started on June 29 at 6 p.m. in each U.S. time zone as Jobs sought a foothold in what he called a “giant market.” The iPhone, which costs $499 and $599 in stores, sold online for an average price of $740, with the highest at about $12,500, according to data last night from online retailer EBay Inc.
There’s “nothing else quite like” the iPhone, said Michael Gartenberg, an analyst at JupiterResearch in New York. “Most consumers have never seen that kind of functionality.” ‘Appleholic’ At Apple’s store in New York’s SoHo neighborhood, fans counted down the minutes and then the seconds as employees in black-and-white T-shirts arranged iPhone displays. The first two phones went to film director Spike Lee and actress Whoopi Goldberg.
“I’m an Appleholic,” said Stephanie Richmond, who bought her 8-gigabyte iPhone from Apple’s Fifth Avenue store in New York. “I have every Apple product, and I think they’re all great.” Customers are allowed one phone each at AT&T’s stores and two at Apple’s outlets. Shoppers can check Apple’s Web site to see if the iPhone is in stock at any of its stores. There’s a wait of two to four weeks for customers who order the phone online from Apple, according to the site.
The iPhone merges capabilities of Apple’s iPod with a handset equipped for Web pages and e-mail, pitting the product against less expensive ones from Nokia Oyj, Samsung Electronics Co., Research In Motion Ltd. and Palm Inc.
Shoppers interviewed at Apple’s stores in New York and California favored the $599, 8-gigabyte model of the iPhone over the 4-gigabyte version.
“For $100 more, you get double the storage,” said engineer Rick Evans, 50, who picked up his iPhone opening night at Apple’s store in Stanford, California. “It’s a no-brainer.” Bigger the Better? Jobs said last week that Apple had boosted manufacturing to meet estimated demand. “We’ve taken our best guess, but it wouldn’t surprise me at all if it ain’t enough,” Jobs, 52, said in an interview with the Wall Street Journal.
Under his leadership, Apple’s annual profit has surged to almost $2 billion from $65 million in the past five years, while sales more than tripled to about $20 billion.
Jobs says he aims to sell 10 million of the phones in 2008, capturing 1 percent of the global market for handsets. He expects consumers will buy 1 billion mobile phones next year, which would be almost four times the number of personal computers sold. The enthusiasm of buyers such as Apple co- founder Steve Wozniak may put Jobs well on the way to that goal.
“I was going to only use the iPhone as a test phone at first, but I’m ready now to make it my primary number,” said Wozniak, who got in line at 4 a.m. on June 29 to buy the phone. “I was still a bit negative after a couple of test calls, but then I tried the browser and was shocked at how wonderful it was to have real Web pages.”
