Through The Fly's Eyes: AT&T and Apple
From Kevin Shult of Theflyonthewall.com
Apple hit hard on AT&T’s iPhone numbers
Shares of Apple (AAPL) sank in late-day trading Tuesday after AT&T (T) said the early surge of iPhone buying wasn’t as big as projected. AT&T reported that 146,000 iPhone owners activated its service in the first 36 hours of the phone’s debut. While that would be a huge success for any other consumer-electronic product, it was considered a flop by some. Besides, the much-touted iPhone isn’t “any other consumer-electronic product.” A number of analysts expected AT&T to report activating as much as 500,000-700,000 iPhones for the quarter. “It was a disappointment,” a Piper Jaffray analyst told USA Today.
The news sent shares of Apple down nearly $9, to $134 yesterday, while AT&T dropped 35c to $39.68. Both companies are up notably today.
Richard Linder, AT&T’s Chief Financial Officer told the New York Times that demand for the iPhone at AT&T stores had outstripped supply in two days and that the launch “couldn’t have gone better.” Richard Doherty, an analyst at Envisoneering Group, considered the iPhone sales a success. He told USA Today that no consumer electronic product.
So how could analysts say that Apple had 500,000-700,000 iPhones sold over the weekend when AT&T reported such a miniscule number in comparison? The Wall Street Journal highlighted an important fact this morning: Apple recognizes revenue when the product is shipped, while AT&T’s figures only acknowledged an activated phone.
Linder noted that some people purchased the iPhone to re-sell, some were given as presents and a number of customers had trouble activating their phones the first few days. Keep in mind AT&T’s activation number was only for the first 36 hours of iPhone sales – which would put the cut-off time around 2 a.m. Sunday.
Before anyone calls the iPhone a flop, investors should wait another quarter and listen for updated sales numbers from AT&T and Apple. Let the first 90 days of iPhone sales be your guide, not the first 36 hours.
Labels: aapl, activate, apple, atandt, att, handset, iphone, linder, phone, theflyonthewall.com
posted by Mr Shult at
2:08 PM
1 Comments:
Some important thoughts in your blog. Thanks. Another factor is that hardcore loyalists stood in line and bought initially. Others were likely skeptical of the high price but some were able to justify it when they actually saw/held/used an iPhone in an Apple/AT&T store or when someone they know shows it off. Anecdotally, I've observed very strong initial impressions when people encounter the multi-touch interface and it seems possible that sales will only continue to pick up steam as people experience this gadget for themselves and realize how it might even replace their laptop in many situations. The iPod got off to a slow start, too, and we know how that turned out.
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lumi, at 2:28 PM
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