PDA

View Full Version : Apple Sold 270,000 iPhones in First 30 Hours




MacRumors
Jul 25, 2007, 04:22 PM
http://www.macrumors.com/images/macrumorsthreadlogo.gif (http://www.macrumors.com)

Mixed in with Apple's Financial Results, Apple announced that they sold 270,000 iPhones in the first 30 hours of iPhone sales.

The number was included with their financial results product breakdown and listed as 270,000 "iPhones and Related Products and Services".

Despite this vague wording, during the conference call, Peter Oppenheimer cleared stated that Apple sold 270,000 iPhones in the first 30 hours of sales.

Article Link (http://www.macrumors.com/2007/07/25/apple-sold-270000-iphones-in-first-30-hours/)



Yankees 4 Life
Jul 25, 2007, 04:24 PM
thats 2.5 per second, that is truly impressive

chr1s60
Jul 25, 2007, 04:25 PM
270,000 phones in 30 hours is excellent. It has been weeks since then so I am sure they have probably sold around 500,000 or more by this point.

Squonk
Jul 25, 2007, 04:26 PM
270,000 for the first 1.5 days of availability is most excellent. I can't wait to hear what that number will be for the current quarter! Wahoo!!!!

donlphi
Jul 25, 2007, 04:27 PM
That's amazing... just wish I owned stock :(

Too late to get in the game you suppose?

ThanatosId
Jul 25, 2007, 04:30 PM
That's amazing... just wish I owned stock :(

Too late to get in the game you suppose?

Stock up 7 points after hours at 5:20pm!! And it is deserved! It is so funny that 400 posts were on that 146k number. Many calling the iPhone a failure:):rolleyes::rolleyes: WRONG!!!!!

Lancetx
Jul 25, 2007, 04:31 PM
The number was included with their financial results product breakdown and listed as 270,000 "iPhones and Related Products and Services".

Despite this vague wording, during the conference call, Peter Oppenheimer clearly stated that Apple sold 270,000 iPhones in the first 30 hours of sales.

The 270,000 sold is indeed accurate. A very impressive debut indeed. I still say AT&T had a lot more initial activation issues than they will ever admit to, but at least Apple apologized for those problems during the conference call.

shawnce
Jul 25, 2007, 04:36 PM
thats 2.5 per second, that is truly impressive Well actually if you consider store hours it is over 4 per second.

Yankees 4 Life
Jul 25, 2007, 04:37 PM
That's amazing... just wish I owned stock :(

Too late to get in the game you suppose?

hey if you want, you can still get in the game, because the stock is going up about 10 bucks tomorrow most likely.

ex ped: i apologize for insulting LanceTX

whooleytoo
Jul 25, 2007, 04:39 PM
Wow, look at the stock go. Up over $2 in trading today, another $2 in after hours trading before the results; down almost $3 after the results came out; now back up $6. Busy day...:)

shawnce
Jul 25, 2007, 04:40 PM
This means that Apple easily cleared 350k units (likely closer to 400k, if not more) the first week and with a likely decent online store order list waiting on supplies. Personally I would qualify shipping a million in one quarter (+30 hours) a success for the iPhone (likely Apple will beat the estimate given their general under promise over deliver style of statements).

elistan
Jul 25, 2007, 04:43 PM
Also, $5 million in revenue for 270,000 implies about $18.51 in revenue per phone. But Apple did mention spreading out iPhone revenue over a full year, didn't they? Meaning $74.04 per phone in total?

http://www.bloomberg.com/apps/news?pid=20601103&sid=ami1f_x4smyY&refer=news

Ghibli
Jul 25, 2007, 04:44 PM
"That thing is the most expensive phone out there! $599 for a phone?? It wont even sell enough to break even!!"- Steve Ballmer

I really love Ballmer's depth of analisys... Real GENIUS... 8-)

danny_w
Jul 25, 2007, 04:44 PM
According to clarifications during the conference call, that was 270,000 iPhones sold to AT&T and to Apple stores during the quarter, NOT to customers. We know that most Apple stores did not sell out during that time, but it was probably close. That number also includes any that were sold to stores but were still in transit at the time of the quarter close (shipments that would be received on Sunday or Monday or later). So the stores did not even have 270,000 to sell, if there were still some in transit.

ajhill
Jul 25, 2007, 04:44 PM
Apple is so ashamed of how much money they are squeezing out of ATT that they are going to keep that amount secret until next quarter's results in October.

Now, more than ever I am starting to believe the $200/iPhone bounty and the $9/month/subscriber payment.

October's number will be amazing!

Flowbee
Jul 25, 2007, 04:46 PM
Also, $5 million in revenue for 270,000 implies about $18.51 in revenue per phone. But Apple did mention spreading out iPhone revenue over a full year, didn't they?


...Over TWO years. 24 months.

lcm123
Jul 25, 2007, 04:46 PM
AAPL stock just passed 52wk high after hour session oh my god :eek:

twoodcc
Jul 25, 2007, 04:47 PM
thats 2.5 per second, that is truly impressive

dang, that's crazy. go Apple

gnasher729
Jul 25, 2007, 04:51 PM
Also, $5 million in revenue for 270,000 implies about $18.51 in revenue per phone. But Apple did mention spreading out iPhone revenue over a full year, didn't they? Meaning $74.04 per phone in total?

http://www.bloomberg.com/apps/news?pid=20601103&sid=ami1f_x4smyY&refer=news

It is more difficult. Apple sold 270,000 iPhones. If you ordered one online, it counts as sold. But only iPhones delivered to customers can be recognised as revenue, so online sales won't be included yet.

For those iPhones that were delivered, 1/24th of the sales price is recognised. Of course a number of $5 million means anything between $4.5 and $5.5 million because of rounding. Not enough information really.

skipdivils
Jul 25, 2007, 04:52 PM
wait till next quarter if you really wanna see a stock go up. whoa baby. when that at & t revenue starts pouring in, their bottom line will shoot WAY up.

elistan
Jul 25, 2007, 04:52 PM
...Over TWO years. 24 months.

Suggesting $148.08 total revenue per iPhone. (Granted this is just a very general ballpark figure, given the factors stated above. But holy smokes, that's a nice ballpark to play in. My understanding is that most consumer electronic gear has super thin margins - 27% is quite an achievement.)

zombitronic
Jul 25, 2007, 04:58 PM
AAPL has crossed the $150 mark in after hours trading.

bigandy
Jul 25, 2007, 04:59 PM
That didn't surprise me. People shouldn't be so quick to start bashing Apple on such a bad move.

Apple don't move in to a market they won't make money in, look at the last few years. Each has been calculated and very successful.

Other mobile manufacturers will be shaking in their boots.

Fluffymuff
Jul 25, 2007, 05:00 PM
You are all seriously confusing the numbers. If you were on the phone, you would have heard the correct statement: Apple has sold 30 phones in the first 270,000 hours. Not so good. :(

EagerDragon
Jul 25, 2007, 05:00 PM
Sounds like the original 1% or 2% had activation issues, is probably closer to 38% had activation issues given their 176,000 only activated.

shawnce
Jul 25, 2007, 05:02 PM
You are all seriously confusing the numbers. If you were on the phone, you would have heard the correct statement: Apple has sold 30 phones in the first 270,000 hours. Not so good. :( OMG! sell sell sell AAPL

SiliconAddict
Jul 25, 2007, 05:04 PM
Again probably 80% of those sales were Apple fanbois. Who were waiting in line for days. These number are spin numbers pure and simple. Its Sony dropping numbers after the initial launch saying we sold out of all PS3's in North America...never mind you only had 90,000 or something. You can always make numbers look better in the right light. I would also like to know how many people returned their iPhone as well. I know of a couple personally who after the newness faded they missed a few features on their old phone.

skipdivils
Jul 25, 2007, 05:04 PM
You know, there were 350 some-odd posts yesterday, many from people who were trying to say 'i told you so' about the failure of apple and the iphone, and that the stock is overpriced. hmmmmm, don't see too many of those today as the stock soars past 150. strange.

fastbite
Jul 25, 2007, 05:05 PM
There you go! That sounds better ... aapl is going up again after hours big time: 149.82!!!

strangelogic
Jul 25, 2007, 05:06 PM
Sounds like the original 1% or 2% had activation issues, is probably closer to 38% had activation issues given their 176,000 only activated.

Apple's numbers included those in transit to retail stores as 'sold' (at least to AT&T stores, someone said to the apple stores as well, but I did not hear that point in the call) ...

They also said that most of the 5 million they are counting was from accessories - meaning that they are counting it over 24 months, apparently in 'days' - so that is only probably 2 days out of 730...

fastbite
Jul 25, 2007, 05:07 PM
And keeps on going up: 150!!!

Flowbee
Jul 25, 2007, 05:08 PM
These number are spin numbers pure and simple.

The numbers are real. 'Spin' is what you're trying to do.

strangelogic
Jul 25, 2007, 05:11 PM
The numbers are real. 'Spin' is what you're trying to do.

I read his post as 'sarcasm' ... you think SiliconAddict was serious?

thomasfxlt
Jul 25, 2007, 05:11 PM
Again probably 80% of those sales were Apple fanbois. Who were waiting in line for days. These number are spin numbers pure and simple. Its Sony dropping numbers after the initial launch saying we sold out of all PS3's in North America...never mind you only had 90,000 or something. You can always make numbers look better in the right light. I would also like to know how many people returned their iPhone as well. I know of a couple personally who after the newness faded they missed a few features on their old phone.

You are a tree falling in the forest....

rosalindavenue
Jul 25, 2007, 05:12 PM
You are all seriously confusing the numbers. If you were on the phone, you would have heard the correct statement: Apple has sold 30 phones in the first 270,000 hours. Not so good. :(

No, no, that's the Zune numbers-- not the iphone. :rolleyes:

boardwalk2
Jul 25, 2007, 05:13 PM
iPhone - 1 million sold in 1 quarter:)

Zune - 1 million sold in 1 year:(

Dave Marsh
Jul 25, 2007, 05:17 PM
I agree that 270,000 iPhones in 30 hours is an excellent opening, and well within the initial range/expectations that people were posting. It was the madness/hyperbole that followed over the rest of the weekend claiming up to a million sales that was ridiculous. Simple arithmetic of 1,800 AT&T stores and 160 Apple stores and how many iPhones they had to sell belies that.

Here in Sacramento, I counted ~200 waiting in line at the door opening. Within an hour and a half, they were all gone. This means to me that the Apple stores probably could, and did, sell 300 - 400 phones over that 30 hours. Best case, that means the Apple stores contributed ~64,000 iPhones to the initial rush. Now add in the AT&T stores. Most people were saying they averaged fewer than 50 iPhones per store, and when they sold out they had to wait until Monday for replacements. If that's the case, add in another 90,000. That brings us to ~150,000 iPhones for the initial rush. So, Apple pushing 270,000 to the stores is certainly believable. And, of course, some stores are vastly larger (and smaller) than others.

You can see how out of whack claims of 700,000 sales seems in retrospect.

No, what downed me in these numbers is not the initial rush. I think it was great and within initial expectations. What downed me was Jobs now asserting that he expects to push total sales to one million by the end of September. That averages out to ~250,000 per month. Not bad for Apple (~$135 million per month in new sales), but well short of previously announced expectations, and suggestive that internal Apple numbers indicate sales will not be taking off for awhile.

I hope this gives Apple the incentive to really dig into the identified bugs and gotchas, fix them, and then start adding some of the additional functionality that we're all clamoring for (like voice dialing, ring tones, and the like).

Frisco
Jul 25, 2007, 05:17 PM
iPhone - 1 million sold in 1 quarter:)

Zune - 1 million sold in 1 year:(

What the heck is a Zune?

kdarling
Jul 25, 2007, 05:17 PM
thats 2.5 per second, that is truly impressive

About 5 per hour, per store.

Flowbee
Jul 25, 2007, 05:19 PM
I read his post as 'sarcasm' ... you think SiliconAddict was serious?

Yes. Yes I do.

EagerDragon
Jul 25, 2007, 05:21 PM
Apple's numbers included those in transit to retail stores as 'sold' (at least to AT&T stores, someone said to the apple stores as well, but I did not hear that point in the call) ...

They also said that most of the 5 million they are counting was from accessories - meaning that they are counting it over 24 months, apparently in 'days' - so that is only probably 2 days out of 730...

So if 30+% of the iPhones were in transit maybe the numbers match.

I still do not believe that the number in transit was that high, it would be a huge error on Apple's judgement. Also given that all AT&T and most Apple stores sold out in two 2 days and given that for at least 4 more days the iphones were only arriving in small quantities at Apple and AT&T, the in transit is probably closer to 12%. I would say that the number of users having issues was closer to 20% or 10 times the stated number of cases.

Just my opinion

/dev/toaster
Jul 25, 2007, 05:29 PM
"That thing is the most expensive phone out there! $599 for a phone?? It wont even sell enough to break even!!"- Steve Ballmer

I really love Ballmer's depth of analisys... Real GENIUS... 8-)

I have been waiting to hear a reaction from Ballmer over it. I am surprised something hasn't asked him yet. Then again, I haven't seen him in an interview since then ... so either he's avoiding the press or just hiding since he has nothing to talk about currently.

lkrupp
Jul 25, 2007, 05:32 PM
http://www.macrumors.com/images/macrumorsthreadlogo.gif (http://www.macrumors.com)

Mixed in with Apple's Financial Results, Apple announced that they sold 270,000 iPhones in the first 30 hours of iPhone sales.

The number was included with their financial results product breakdown and listed as 270,000 "iPhones and Related Products and Services".

Despite this vague wording, during the conference call, Peter Oppenheimer cleared stated that Apple sold 270,000 iPhones in the first 30 hours of sales.

Article Link (http://www.macrumors.com/2007/07/25/apple-sold-270000-iphones-in-first-30-hours/)

I'm tired of all this prediction bs. SJ and the boys should just take the company private. Then no more of this crap every quarter.

DaBrain
Jul 25, 2007, 05:32 PM
"That thing is the most expensive phone out there! $599 for a phone?? It wont even sell enough to break even!!"- Steve Ballmer

I really love Ballmer's depth of analisys... Real GENIUS... 8-)

I'll take a wild guess and say that Meester Balmer is eating one large piece of Humble Pie! Actually he's probally eating the whole damn pie! I can just see his lizard like tongue gulping it up! What say you Meester Balmer? :D

willybNL
Jul 25, 2007, 05:35 PM
Wow..

After Hours: 148.99 +11.87 (8.66%) - Jul 25, 6:20PM ET
(http://finance.google.com/finance?q=apple&hl=en)

lkrupp
Jul 25, 2007, 05:37 PM
I'll take a wild guess and say that Meester Balmer is eating one large piece of Humble Pie! Actually he's probally eating the whole damn pie! I can just see his lizard like tongue gulping it up! What say you Meester Balmer? :D

Meanwhile Meester Balmer's Zune is going nowhere fast. I can see it now...the ZPhone any day now and you can talk to your XBox with it.

DaBrain
Jul 25, 2007, 05:37 PM
You are all seriously confusing the numbers. If you were on the phone, you would have heard the correct statement: Apple has sold 30 phones in the first 270,000 hours. Not so good. :(

You'll never make a good comedian!--))) :rolleyes:

SiliconAddict
Jul 25, 2007, 05:42 PM
"That thing is the most expensive phone out there! $599 for a phone?? It wont even sell enough to break even!!"- Steve Ballmer

I really love Ballmer's depth of analisys... Real GENIUS... 8-)


while an exageration he does have a point. $500-$600 is WELL outside the spending range for most average people. If this was a laptop sure. Buts its a damn phone at the end of the day.

bross00
Jul 25, 2007, 05:43 PM
I recently read (http://www.nytimes.com/2007/07/24/science/24angi.html?em&ex=1185508800&en=71a6c881c62a43a3&ei=5070) that rats demonstrate a level metacognition - the ability do distinguish between what they do and don't know (another "rat" Donald Rumsfeld would be proud).

Reading this thread and the prior AT&T thread i can't help but be dismayed to learn that a large number of my fellow MacRumors readers seem unable to make such a distinction.

Yes - the site is called MacRumors. But the speculative poppycock passed off as evidence of great success or failure in this and the prior thread are laughable.

SiliconAddict
Jul 25, 2007, 05:46 PM
Meanwhile Meester Balmer's Zune is going nowhere fast. I can see it now...the ZPhone any day now and you can talk to your XBox with it.


Yah for a company who's yearly profits topped 50 BILLION. Yah. Nowhere fast.:rolleyes: I'd love to see Apple try for 50 billion in a year's time.

Fluffymuff
Jul 25, 2007, 05:46 PM
And keeps on going up: 150!!!
I don't think it's good that the stock moves so quickly up and down. That magnitude of value should not be subject to the vagaries of numbers that are fundamentally unimportant.

A prescient comment on the phone call was that Apple views the iPhone business in terms of years, not months. And here we are with not days but hours of sales swinging the value of a company by 10 billion dollars.

One of the drawbacks of Apple's success this past year is the deleterious hyper-vigilance of a public that has become too aware of it. When no one cared, Apple could make mistakes without fear of a 10 billion dollar spanking, and therefore flourish. Hills and valleys didn't matter; vision and talent did.

You have to wonder if Apple can continue to be Apple with this many people watching it, this much money moving on less than a burp, and this many people reading this thread. I wonder if Apple and can be Apple with so many people cheering or mewing when the stock goes up or down by 5 points.

If AAPL went down 50 points tomorrow, that would be good. it would remove the poisonous "Mad Money" sports-like pulse-taking every time someone flushes the toilet in Cupertino.

If you zoom out and get a sense of the fundamental transformation of our society from industry to information, and identify those companies that are best positioned to drive it, you can make a lot of money. But not by examining 30 hours, 30 days, or 30 weeks.

This is all silliness. Anyone who is interested in AAPL should buy a Mac and an iPhone. If you like them, invest for 10 years. If you don't, go away. But if you do choose to stay, please don't confuse the most momentous transformation in the history of our species with a basketball game.

SiliconAddict
Jul 25, 2007, 05:48 PM
You are a tree falling in the forest....

Naa I'm one hand clapping against the face of exageration.

Gee
Jul 25, 2007, 05:50 PM
I don't think it's good that the stock moves so quickly up and down. That magnitude of value should not be subject to the vagaries of numbers that are fundamentally unimportant.

A prescient comment on the phone call was that Apple views the iPhone business in terms of years, not months. And here we are with not days but hours of sales swinging the value of a company by 10 billion dollars.

One of the drawbacks of Apple's success this past year is the deleterious hyper-vigilance of a public that has become too aware of it. When no one cared, Apple could make mistakes without fear of a 10 billion dollar spanking, and therefore flourish. Hills and valleys didn't matter; vision and talent did.

You have to wonder if Apple can continue to be Apple with this many people watching it, this much money moving on less than a burp, and this many people reading this thread. I wonder if Apple and can be Apple with so many people cheering or mewing when the stock goes up or down by 5 points.

If AAPL went down 50 points tomorrow, that would be good. it would remove the poisonous "Mad Money" sports-like pulse-taking every time someone flushes the toilet in Cupertino.

If you zoom out and get a sense of the fundamental transformation of our society from industry to information, and identify those companies that are best positioned to drive it, you can make a lot of money. But not by examining 30 hours, 30 days, or 30 weeks.

This is all silliness. Anyone who is interested in AAPL should buy a Mac and an iPhone. If you like them, invest for 10 years. If you don't, go away. But if you do choose to stay, please don't confuse the most momentous transformation in the history of our species with a basketball game.

That's gotta be Steve himself.

appleguy
Jul 25, 2007, 05:50 PM
Well actually if you consider store hours it is over 4 per second.

what about in places like New York that are open 24/7


Edit: should learn to spell

Flowbee
Jul 25, 2007, 05:53 PM
Yah for a company who's yearly profits topped 50 BILLION. Yah. Nowhere fast.:rolleyes:

I believe he said "...Balmer's Zune is going nowhere fast."

plumbingandtech
Jul 25, 2007, 05:55 PM
Yah for a company who's yearly profits topped 50 BILLION. Yah. Nowhere fast.:rolleyes: I'd love to see Apple try for 50 billion in a year's time.

YAH! Apple should be a predatory monopoly for a couple of decades too!

That way they will be super cash rich and then they can spend cash on innovative products like the iPhone and iPod..

oh wait. they did. (without being monopolists.)

and that company with $50 bill in the bank.

Brown zune.

Heck of a job Balmer!

offwidafairies
Jul 25, 2007, 06:01 PM
Sounds like the original 1% or 2% had activation issues, is probably closer to 38% had activation issues given their 176,000 only activated.

yeah thats pretty bad stats
hopefully they'll have those issues sorted out by jan 2008 when it's released in oz :rolleyes:

Yankees 4 Life
Jul 25, 2007, 06:04 PM
hey have any of you guys wondered what will happen tomorrow with all of these day traders trying to cash out? Hopefully the stock soars

mainomega
Jul 25, 2007, 06:04 PM
The problem with Zune is that its impossible to share music thru their wifi connection if you are the only one that owns one.
I used to hate macs till my gf bought an 17" macbook pro... now I love apple.

gnasher729
Jul 25, 2007, 06:09 PM
Yah for a company who's yearly profits topped 50 BILLION. Yah. Nowhere fast.:rolleyes: I'd love to see Apple try for 50 billion in a year's time.

No, Microsoft has just above $50bn _revenue_. Apple has about $22bn.

mcarnes
Jul 25, 2007, 06:12 PM
"That thing is the most expensive phone out there! $599 for a phone?? It wont even sell enough to break even!!"- Steve Ballmer

I really love Ballmer's depth of analisys... Real GENIUS... 8-)

:p Ballmer is a doofus with a hard on. Plain and simple.

shawnce
Jul 25, 2007, 06:12 PM
what about in places like New York that are open 24/7 Well it is a guess factoring in the AT&T stores that had shorter hours (AT&T outnumber Apple stores 10 to 1).

Eraserhead
Jul 25, 2007, 06:18 PM
I believe he said "...Balmer's Zune is going nowhere fast."

No, Microsoft has just above $50bn _revenue_. Apple has about $22bn.

From looking at this (http://www.microsoft.com/presspass/images/press/2007/07-19chart.jpg), MS's net profit for the last year was 14.1 billion.

lawrencewinkler
Jul 25, 2007, 06:19 PM
Please look at Apple's summary datasheet.

They sold 270,000 of "iPhone and Related Products and Services (6)", where footnote 6 reads:

"(6) Consists of iPhones and Apple-branded and third-party iPhone accessories."

Result: Probably not inconsistent with AT&T's number of activations.

Eraserhead
Jul 25, 2007, 06:27 PM
Please look at Apple's summary datasheet.

They said they sold 270k iPhones in the conference call ;).

shawnce
Jul 25, 2007, 06:28 PM
Please look at Apple's summary datasheet.

They sold 270,000 of "iPhone and Related Products and Services (6)", where footnote 6 reads:

"(6) Consists of iPhones and Apple-branded and third-party iPhone accessories."

Result: Probably not inconsistent with AT&T's number of activations.

That line item can easily be confused ... however if you listened to the conference call (http://phobos.apple.com/WebObjects/MZStore.woa/wa/viewPodcast?id=74942331) (which this article references) they directly stated that they sold 270k iPhone in the first 30 hours (before quarter end) and that the unit line item doesn't include accessories.

Oh course I didn't yet see concrete confirmation of what "sold" means exactly ... for example do they count iPhones sold to the AT&T stores as a sale, or to end customers, etc. I don't think Apple "sells" items to Apple stores so I believe a "sale" via an Apple retail store in only counted when they sell to the end customer.

(note the pod cast I linked about doesn't yet have Q3 posted so... http://www.apple.com/quicktime/qtv/earningsq307/)

theBB
Jul 25, 2007, 06:36 PM
Yah for a company who's yearly profits topped 50 BILLION. Yah. Nowhere fast.:rolleyes: I'd love to see Apple try for 50 billion in a year's time.
50 billion in which currency? In US dollars, their annual profit is about 14 billion. It is not small by any means, but I think you need to chill out a bit more.

inkswamp
Jul 25, 2007, 06:37 PM
while an exageration he does have a point. $500-$600 is WELL outside the spending range for most average people. If this was a laptop sure. Buts its a damn phone at the end of the day.

No, it's not "a damn phone at the end of the day." It's really a scaled back laptop that makes phone calls and emulates the functionality of an iPod.

nxent
Jul 25, 2007, 06:38 PM
That's amazing... just wish I owned stock :(

Too late to get in the game you suppose?

you know, i said the exact same thing 3 years ago when apple stock was soaring based on the ipod's success....

Ghibli
Jul 25, 2007, 06:50 PM
The problem with Zune is that its impossible to share music thru their wifi connection if you are the only one that owns one.


I'm sorry to correct you, but the Correct definition from the Ballmer's dictionary (TM) is "SQUIRTING songs"...

So, your phrase should be reformed: "The problem with Zune is that its impossible SQUIRT SONGS if you are the only one that owns one."

Great Steve Ballmer... A squirt? Anyone? :)

imwoblin
Jul 25, 2007, 06:55 PM
http://images.apple.com/pr/pdf/q307data_sum.pdf

jasonbuzz
Jul 25, 2007, 06:58 PM
They also said that most of the 5 million they are counting was from accessories - meaning that they are counting it over 24 months, apparently in 'days' - so that is only probably 2 days out of 730...

If apple sold 270,000 units at an average price of $550 per unit, that would be $148.5M in total anticipated revenue over two years. If that was recognized in days then each day would get $203K (148.5M/730 days) for a total of $406K in revenue recognition for June 29th and 30th.

The other $4.6M would be in accessories which would be recognized right away. That would line up with what Apple stated in the conference call.

cisco1138
Jul 25, 2007, 07:00 PM
What the heck is a Zune?
I think it's a pile of Zand in the desert!

Zwhaler
Jul 25, 2007, 07:01 PM
270k... much much better than the original 146k claimed by ATT. ANd this is only the first 30 hours!! Very exciting. Go Apple!

BlueT
Jul 25, 2007, 07:17 PM
Enjoy your high flying stock now. When Apple explicitly guides for EPS greater than 20% below analyst expectations for the next quarter, you need to seriously wonder what's going on. Companies DO NOT like to lower guidance, ever, unless is absolutely necessary. (If you think that Apple is deliberately trying to lower expectations, just to crush estimates again, think again.) Wall Street doesn't typically like earnings surprises, and this will be no exception.

Apple is clearly expecting something to slow down, be it iPod sales, or slower iPhone growth than was originally anticipated (remember, we're already a month into the next quarter and the iPhone has yet to debut outside the US).

And BTW, something else that concerns me is that 270,000 includes all phones initially delivered to stores and ordered online during those first 30 hours. Many ATT stores and Apple stores didn't sell out until Sunday, which means that 270K might be a significantly large % of total opening weekend numbers. And after the first week or two, sales would have steadily trailed off, once the buzz wore off. Already people are concerned that Apple might need to restart the hype machine to get more people into ATT stores. So 350K-400K over the first couple of weeks is great, but they'd need to average 200K per month for the next three months to hit their target of 1,000,000 for the 4th quarter, which is not as simple as you might imagine. My only guess is that they're moments away from launching overseas; otherwise, that figure is impossible to reach. Remember, 200K is greater than any phone opening for ATT ever; Apple would need to do that 3 months IN A ROW to hit that target. Again, not possible unless they go abroad.

Apple MUST have a second phone up their sleeve to hit 10 million by 2008. I actually wonder if they have more than one. Because at this price point, they won't hit 5 million by the end of 2008.

mambodancer
Jul 25, 2007, 07:19 PM
No, it's not "a damn phone at the end of the day." It's really a scaled back laptop that makes phone calls and emulates the functionality of an iPod.

Agreed. After using the iPhone for nearly a month now it feels more like a very small laptop than "just" a phone.

Alpinism
Jul 25, 2007, 07:23 PM
bla bla bla iPhone bla bla bla macbook pro has not seen redesign in ages, bla bla bla iToaster bla bla Mac pro is nearly 1 year old with fake 8 core bla bla bla iMicrowave bla bla No Leopard bla bla iCanoe bla bla bla No iLife bla bla iToilet bla bla

Where is your bearing :apple: ?

Lancetx
Jul 25, 2007, 07:26 PM
Enjoy your high flying stock now. When Apple explicitly guides for EPS greater than 20% below analyst expectations for the next quarter, you need to seriously wonder what's going on. Companies DO NOT like to lower guidance, ever, unless is absolutely necessary. (If you think that Apple is deliberately trying to lower expectations, just to crush estimates again, think again.) Wall Street doesn't typically like earnings surprises, and this will be no exception.

But Apple has consistently done this for years now. If you look back over at least the last 2-3 years, they have always been extremely conservative with their guidance every quarter, and they have usually smashed that guidance each time. So why would this upcoming quarter be any different? Wall Street has learned to largely ignore Apple's guidance because they already know it's always far too conservative. The problem will only come if Apple ever doesn't meet their guidance, since Wall Street is already quite used to Apple repeatedly exceeding it. That's why we often get such wild analyst predictions. Hence the crazy predictions of 500-700K iPhones sold in the first 3 days from some of these analysts.

FreeState
Jul 25, 2007, 07:30 PM
270,000 includes all phones initially delivered to stores and ordered online during those first 30 hours.

Are you just guessing on this? I did not hear this in the earnings report.

All credit card companies in the US do not allow companies to charge for product until it is shipped. None of the product ordered online was shipped in the first two days - it did not start shipping until Monday. Apple does not charge until shipped either.

rjwill246
Jul 25, 2007, 07:41 PM
Enjoy your high flying stock now. When Apple explicitly guides for EPS greater than 20% below analyst expectations for the next quarter, you need to seriously wonder what's going on. Companies DO NOT like to lower guidance, ever, unless is absolutely necessary. (If you think that Apple is deliberately trying to lower expectations, just to crush estimates again, think again.) Wall Street doesn't typically like earnings surprises, and this will be no exception.

Apple is clearly expecting something to slow down, be it iPod sales, or slower iPhone growth than was originally anticipated (remember, we're already a month into the next quarter and the iPhone has yet to debut outside the US).

And BTW, something else that concerns me is that 270,000 includes all phones initially delivered to stores and ordered online during those first 30 hours. Many ATT stores and Apple stores didn't sell out until Sunday, which means that 270K might be a significantly large % of total opening weekend numbers. And after the first week or two, sales would have steadily trailed off, once the buzz wore off. Already people are concerned that Apple might need to restart the hype machine to get more people into ATT stores. So 350K-400K over the first couple of weeks is great, but they'd need to average 200K per month for the next three months to hit their target of 1,000,000 for the 4th quarter, which is not as simple as you might imagine. My only guess is that they're moments away from launching overseas; otherwise, that figure is impossible to reach. Remember, 200K is greater than any phone opening for ATT ever; Apple would need to do that 3 months IN A ROW to hit that target. Again, not possible unless they go abroad.

Apple MUST have a second phone up their sleeve to hit 10 million by 2008. I actually wonder if they have more than one. Because at this price point, they won't hit 5 million by the end of 2008.

As a long time Apple investor I can tell you that you are wrong thinking that something sneaky is going on and Apple is putting us all on the alert! How wonderfully 007. The fact is that Apple always makes very conservative estimations and nearly always blows by them, just as it did today.


I have no idea what system your maths is based on but it is highly likely Apple hit 400,000 in sales, at the least, by the end of the weekend. You couldn't get an iPhone for love nor money on Monday.

Apple most certainly CAN report 1 million by quarter's end and--- if they don't it is 'cause they sold 2 million!

33scottie33
Jul 25, 2007, 07:43 PM
Way to go :apple:!!!

The people that complain the most about the iPhone are those that do not have one!

gr8tfly
Jul 25, 2007, 07:44 PM
Several posts are saying "270,000 shipped".

The conference call clearly said "sold a total of 270,000 iPhones through AT&T and through our Apple retail stores."

thomasfxlt
Jul 25, 2007, 07:50 PM
Are you just guessing on this? I did not hear this in the earnings report.

All credit card companies in the US do not allow companies to charge for product until it is shipped. None of the product ordered online was shipped in the first two days - it did not start shipping until Monday. Apple does not charge until shipped either.

You are absolutely correct on this. Apple is not going to count a product "sold" just because it was shipped to an Apple retail outlet. The retail stores are not an independent company and a product sold is not booked into revenue until it is shipped or delivered to an end user customer. Now, product shipped to ATT is another story. Those would be considered sales. We all know based on information posted here that ATT inventories disappeared quickly because each store received very limited supplies. I'm guessing the total units sold by
ATT in the first 30 hours to be 60 - 70 thousand. Apple stores had the balance. Most Apple stores sold out initial inventory by Monday-Tuesday.

I'm going to be bold here and guess that the volume sold to date is very close to the numbers some analysts have guessed and is near 700,000 units.

Apple is saying it will sell a million units by the end of Sept. My guess is it's in the bag. Even if sales are slowing, they have to move 1/3 of the volume in 2/3 of the time.

Customer satisfaction with the phone is overwhelmingly high. The only obstacle with high volume sales of this unit is the price barrier. Apple will solve that problem with another model by holiday. This is why Jobs is saying it will meet the 2008 target of 10 million. Another phone is clearly in the works.

iChan
Jul 25, 2007, 07:56 PM
Yah for a company who's yearly profits topped 50 BILLION. Yah. Nowhere fast.:rolleyes: I'd love to see Apple try for 50 billion in a year's time.

you're mistaking revenue with profit.

2006 revenue...

MSFT: $44.6 B
AAPL: $19.32 B


2006 Net Income...

MSFT: $12.6 B
AAPL: $1.73 B

Apple have a while to go yet it seems to match MSFT's profits or revenues.

I'll give it a good 3-5 years.;)

Analog Kid
Jul 25, 2007, 08:05 PM
I have been waiting to hear a reaction from Ballmer over it. I am surprised something hasn't asked him yet. Then again, I haven't seen him in an interview since then ... so either he's avoiding the press or just hiding since he has nothing to talk about currently.
While I would love to hear the press ask someone "don't you feel like a freakin' idiot having said that on the record", whether it's a corporate executive or a government official, it just never happens... Instead they'll ask Jobs what he thinks about the comment or something and try to start a pissing match.
I don't think it's good that the stock moves so quickly up and down. That magnitude of value should not be subject to the vagaries of numbers that are fundamentally unimportant.

A prescient comment on the phone call was that Apple views the iPhone business in terms of years, not months. And here we are with not days but hours of sales swinging the value of a company by 10 billion dollars.

One of the drawbacks of Apple's success this past year is the deleterious hyper-vigilance of a public that has become too aware of it. When no one cared, Apple could make mistakes without fear of a 10 billion dollar spanking, and therefore flourish. Hills and valleys didn't matter; vision and talent did.

You have to wonder if Apple can continue to be Apple with this many people watching it, this much money moving on less than a burp, and this many people reading this thread. I wonder if Apple and can be Apple with so many people cheering or mewing when the stock goes up or down by 5 points.

If AAPL went down 50 points tomorrow, that would be good. it would remove the poisonous "Mad Money" sports-like pulse-taking every time someone flushes the toilet in Cupertino.

If you zoom out and get a sense of the fundamental transformation of our society from industry to information, and identify those companies that are best positioned to drive it, you can make a lot of money. But not by examining 30 hours, 30 days, or 30 weeks.

This is all silliness. Anyone who is interested in AAPL should buy a Mac and an iPhone. If you like them, invest for 10 years. If you don't, go away. But if you do choose to stay, please don't confuse the most momentous transformation in the history of our species with a basketball game.
I know this has been quoted half a dozen times in this thread already, but I'm going to quote it again hoping more people will read it that way. I don't know if I think you need to be committed for 10 years give the modern business environment, but the point holds regardless.

headfake
Jul 25, 2007, 08:06 PM
1. apple is claiming $5M profits on 270K phones. that's $18/phone.
2. consensus seems to be they're getting $9/mo/phone from AT&T -- since that's pure profit they should be getting $7.2M/quarter for the next 8 quarter from these iphone sales. hm. ok.
3. they supposedly got a bounty from AT&T on iphone sales. reports were $150-200/phone -- but even if you go with AT&T's 146K report, that should have been a minimum of $22M, not $5M.

something doesn't add up. was there a bounty? if so, is it spread out over the 24 months? if so, that would add $6/phone alone.

something isn't jiving here. could AAPL be lowballing this? maybe they booked advertising or some R&D against the iphone profits? $18/phone just doesn't seem to match up to anything.

number9
Jul 25, 2007, 08:11 PM
Did anybody catch this? If someone mentioned this already, I apologize, I did not look through all of the responses in this thread.

Anyway, I was over at TUAW looking at their transcript of the conference call, and I noticed this...

5:37pm: "How many iPhones did AT&T stores have left over?" Most of their stores were stocked out, but there were still some in transit to AT&T at the end of quarter. 270K includes some AT&T store iPhones.

Some AT&T store phones? So does this mean that the 270,000 figure is only what Apple itself directly sold online or in an Apple store? Is it possible that revenue they are expecting from AT&T not only includes subscription fees and what not, but also the actual full number of units sold through AT&T stores? If so, then you could be looking at a number closer to the unrealistic analyst predictions.

Just a thought. I don't think im necessarily right, but I just thought that little tidbit was interesting.

BlueT
Jul 25, 2007, 08:22 PM
You're right that 270,000 likely did not include online sales. Oppenheimer said *shipped* to Apple and ATT stores. But in all likelihood, I cannot imagine that when all is said an done in the first couple of weeks, they brought in more than 400-450K. (Slightly higher than I originally said in this thread, because I just listened to the conference call, and it seems to me that Oppenheimer was being deliberately secretive with the real numbers.) Early adopters plus Apple fanboys plus a couple of respective relatives/friends may just be 500K after all.

I'm actually kinda curious now to see what they have up their sleeve. A second phone is clearly on the way, but will it really receive the same kind of fanfare as the current model?

But as many people have said over and over again, this business model is different than the iPod, because it requires a subscription and two year commitment.

BTW, the market is pricing in analysts like Munster from Piper, who is claiming 45 million sales in 2009. It's all fun and games for little investors to get in thinking that the stock is going to 200, but I think (simply because I think that number is so ridiculous) that the price might tank the way it did last summer (from 70 to 50).

thomasfxlt
Jul 25, 2007, 08:35 PM
The point is that you have no comprehension of the diversity of Apple's strategy and the exponential growth that's likely given the upside in market share to be gained in it's traditional business.

And, Gene Munster has been dead-on all along. He was the first major analyst in years to cover the stock and he "gets it".

I'd suggest you short the stock.

smj
Jul 25, 2007, 08:40 PM
Not sure if this was posted or not but Apple said they would sell 1 Million by the end of the year. End of year is Dec. 31st. The end of their FISCAL year is Sept. 30th.

BlueT
Jul 25, 2007, 08:46 PM
I'm not a huge fan of arguing with anonymous folk like you, but given the fact that you just strung together business jargon in the attempt at sounding intelligent, I can't help but think that you're just trying to prop up a massive ego that's founded upon a very, very delicate foundation of narcissism.

But just to try and parse your comment, you're saying that upside potential in their traditional business, i.e. Macs and iPods, is founded upon exponential growth. See, that means that you think that their current year-over-year Mac growth and continued strong iPod sales will continue at their pace for the foreseeable future. Now, while I agree that the Mac definitely has this upside (given the switch to Intel and the ability to use Windows programs natively), the iPod division is a maturing market, with limited growth possibilities.

You know how I know this? Because Apple is a premium brand, and there are WAY too many Asian players who make just as good MP3 players for a fraction of the cost. Much like the Starbucks model, who is also seeing a saturated domestic market and is being forced to move to China and India to meet growth expectations, Apple will eventually be forced against the wall because they'll have saturated the market. Why do you think they moved into the phone division? BUT, and here's my problem, major players like Nokia and Samsung have (in the case of Nokia anyway) over 100 different models of phones to fit every single nitche market. Apple can't do that. It's not possible for their business model, as they don't have the supply chain, nor do they have the established connections. So I see a lot of downside potential in the near term. And also in the near term, I see a lot of volatility, which hurts smaller investors, like those who hang out on MacRumors.

smj, goto 5:45 of the conference call. Oppenheimer explicitly states that they hope to reach the 1,000,000 target by the end of their fiscal year.

sparkleytone
Jul 25, 2007, 08:49 PM
$18/phone.

If they are going to be reporting iPhone related earnings as subscription earnings over 2 years, wouldn't that make more sense? If each phone brings them $18 per quarter that would be $144 (24-28.8%) of profit per phone. Sounds good to me. I don't know how the subscription stuff works, so if I'm wrong...I'm no worse off than most people in this thread ;)

MacQuest
Jul 25, 2007, 08:50 PM
...Apple has sold 30 phones in the first 270,000 hours. Not so good. :(

ROFLMAO!!!

270,000 hours = 11,250 days.

iPhone has been out for 27 days.

Time flies when you're TOTALLY mistaken (or fail to express sarcastic humor properly, if that is indeed the case here). :D

;)

30 iPhones were sold just at the at&t store I was at within the first 1/2 hour. :)

Sounds like the original 1% or 2% had activation issues, is probably closer to 38% had activation issues given their 176,000 only activated.

at&t reported only 146,000 activations, NOT 176,000.

Regardless, 38% activation issues is WAY off, but 1-2% may be shy as well.

Also, people need to remember that lots of iPhones were sold to people who bought them as gifts as well as to people who despite rushing out to get one, may not have been in a rush to activate it for any number of reasons.

sparkleytone
Jul 25, 2007, 08:52 PM
I'd suggest you short the stock.
Couldn't have said it better myself. Put up or shut up. :)

thomasfxlt
Jul 25, 2007, 09:00 PM
I'm not a huge fan of arguing with anonymous folk like you, but given the fact that you just strung together business jargon in the attempt at sounding intelligent, I can't help but think that you're just trying to prop up a massive ego that's founded upon a very, very delicate foundation of narcissism.

But just to try and parse your comment, you're saying that upside potential in their traditional business, i.e. Macs and iPods, is founded upon exponential growth. See, that means that you think that their current year-over-year Mac growth and continued strong iPod sales will continue at their pace for the foreseeable future. Now, while I agree that the Mac definitely has this upside (given the switch to Intel and the ability to use Windows programs natively), the iPod division is a maturing market, with limited growth possibilities.

You know how I know this? Because Apple is a premium brand, and there are WAY too many Asian players who make just as good MP3 players for a fraction of the cost. Much like the Starbucks model, who is also seeing a saturated domestic market and is being forced to move to China and India to meet growth expectations, Apple will eventually be forced against the wall because they'll have saturated the market. Why do you think they moved into the phone division? BUT, and here's my problem, major players like Nokia and Samsung have (in the case of Nokia anyway) over 100 different models of phones to fit every single nitche market. Apple can't do that. It's not possible for their business model, as they don't have the supply chain, nor do they have the established connections. So I see a lot of downside potential in the near term. And also in the near term, I see a lot of volatility, which hurts smaller investors, like those who hang out on MacRumors.

smj, goto 5:45 of the conference call. Oppenheimer explicitly states that they hope to reach the 1,000,000 target by the end of their fiscal year.

And you sound like a typical Wall Street number cruncher that has never owned or operated a real business like I have. Your assessment of Apples competition completely ignores the most important factor in Apples business strategy since the company's inception. They don't need to compete with anyone who makes 100 models of phones. They just need to make a few that work right and integrate on a lifestyle level in ways no other company can compete with.

You don't understand Apple. You may think you understand the numbers, but you don't understand the vision.

BlueT
Jul 25, 2007, 09:04 PM
Ironically, I'm both. I owned a business, and now I work on the Street. Not that that really matters. You believe in the Kool-Aid. I believe in reality that any business can fail at any point, no matter how great the vision is. Which is what Apple believes as well, which is why they have a nest egg of 11 billion in cash sitting in the bank.

thomasfxlt
Jul 25, 2007, 09:32 PM
Ironically, I'm both. I owned a business, and now I work on the Street. Not that that really matters. You believe in the Kool-Aid. I believe in reality that any business can fail at any point, no matter how great the vision is. Which is what Apple believes as well, which is why they have a nest egg of 11 billion in cash sitting in the bank.

Well at least I was right about the Wall Street part.

Apple has lots of cash because they don't do acquisition. I don't think there's a lack of confidence in their strategy at all. Quite the contrary. I think the bankroll and lack of debt is like a giant sledgehammer. Coupled with the multifaceted business strategy that's to be executed over the next few years, this is "the Perfect Storm".

We'll see who's right. You short the stock, I'll hold my shares.

BlueT
Jul 25, 2007, 09:33 PM
You know, I feel bad. That last comment came off as way too snide. I get the love of the company. I have two macs, had two ipods, and have slowly converted my family into Apple people. So I get it. But sometimes (especially now with the stock at 150) I worry that "irrational exuberance" will lead to a lot of small time investors getting hurt in the short run, which isn't good for anyone.

thomasfxlt
Jul 25, 2007, 09:51 PM
You know, I feel bad. That last comment came off as way too snide. I get the love of the company. I have two macs, had two ipods, and have slowly converted my family into Apple people. So I get it. But sometimes (especially now with the stock at 150) I worry that "irrational exuberance" will lead to a lot of small time investors getting hurt in the short run, which isn't good for anyone.

So. I'm good with that sentiment. I don't like to see people get hurt either. I certainly am not endorsing ANY investment strategy. I have mine and that's what it is ....mine.

I'm just a bit fed up with Wall Street money managers manipulating things to the advantage of their clients, and screwing over the small investors who have no clue that they are merely along for the ride. The sell-off the other day was the result of big funds dumping Apple over some misunderstood data from ATT. Who's hurting the little investor? All Apple did was blow away the estimates.

abhibeckert
Jul 25, 2007, 09:55 PM
Sounds like the original 1% or 2% had activation issues, is probably closer to 38% had activation issues given their 176,000 only activated.

Not everyone who purchased an iPhone will have activated it immediately, especially iPhones purchased as gifts. In a 30 hour time window, it's not hard to imagine > 30% not being activated yet.

Yankees 4 Life
Jul 25, 2007, 09:57 PM
guys, dont forget, tomorrow will be a very big day, buy now before its too late!

G4R2
Jul 25, 2007, 10:08 PM
It's hard to say for sure, but it seemed that the majority of people purchasing iPhones on the opening day were actually buying two phones apiece. The woman in front of me on line asked me to buy her one as well since I was only purchasing one for myself so she walked away with three.

I don't know the degree to which this was a contributing factor in the discrepancy between AT&T's activation numbers and Apple's figures, but I do think it is likely that many of the purchasers who got two iPhones simply activated one at first to see how it worked out before going ahead to activate the second unit. Of course, how much does this type of behavior, and other behaviors like it, contribute to the 100k + differential?

What is clear is that Apple sold a lot of iPhones the first two days. As AT&T stated more iPhones were sold on the first two days than any other phone has sold in the first month (arguably, there are a lot of reasons for this other than consumer demand). Apple can be very pleased with itself, especially since the device has lived up to and even exceeded the hype that preceded it.

martijn.s
Jul 25, 2007, 10:10 PM
ROFLMAO!!!

270,000 hours = 11,250 days.

iPhone has been out for 27 days.

Time flies when you're TOTALLY mistaken (or fail to express sarcastic humor properly, if that is indeed the case here). :D

;)

30 iPhones were sold just at the at&t store I was at within the first 1/2 hour. :)



at&t reported only 146,000 activations, NOT 176,000.

Regardless, 38% activation issues is WAY off, but 1-2% may be shy as well.

Also, people need to remember that lots of iPhones were sold to people who bought them as gifts as well as to people who despite rushing out to get one, may not have been in a rush to activate it for any number of reasons.



man, u may be right about some of your comments, but overall u are completely ridiculous.

try to read the news before posting, he made a mistake, and u reply by making 4 more.

shawnce
Jul 25, 2007, 10:11 PM
Where is your bearing :apple: ? Apparently directed at growing Mac sales ... at a rate greater then the market is growing. ...and growing iPod unit volume ...and launching a new product that is so far well received and selling well.

Curious on why folks think that the Mac Book Pro needs a redesign? It is well designed kit using the latest technology available.

businezguy
Jul 25, 2007, 10:17 PM
Ironically, I'm both. I owned a business, and now I work on the Street. Not that that really matters. You believe in the Kool-Aid. I believe in reality that any business can fail at any point, no matter how great the vision is. Which is what Apple believes as well, which is why they have a nest egg of 11 billion in cash sitting in the bank.

I'm going to have to interject in this exchange to ask exactly what you would expect Apple to do aside from keeping the cash they've earned? Obviously they could invest the cash to diversify their operations into other market segments, which is really the only other thing a company generally does with their cash, aside from R&D, advertising, etc.

So since you are stating that Apple is holding 11 billion in cash due to concerns about market saturation (this is what you are implying, and you did just paint yourself into this corner), let's see if we can come up with some more logical reasons why a company would keep money on hand, shall we?

1) Apple expects an upside in iPhone sales, and needs extensive cash on hand to buy bulk (and therefore more affordable) purchases of flash memory. While that wouldn't account for 11 billion obviously, that would be a *reason* for having cash on hand--for future purchases.

2) Apple doesn't *need* to spend 11 billion to diversify their market because they have enough in-house R&D, creativity, and marketing talent to go into new segments as they are identified, without the need to purchase companies and add the talent to the company. What you are really stating is that any company that has no fear of market saturation spends all of their money to build a bigger company, make purchases to diversify their company and the markets it is involved in.

What's a company that spent tons of money to buy into new market segments by buying other companies? Ford Motor Company, that's who. Now here's the thing about buying companies to get into new market segments. That's expensive, and the company you purchase had better be successful in their market segment, and it had better mesh well with your own market. It had also better be a *neccessary* purchase, which I'll go back to in a bit.

The point is, a lot of those covering Ford state Ford put all of it's eggs into the SUV market, and gas prices, and blah blah blah. There's partial truth. Fact:

Ford spent way too much money on the companies they purchased, and they built a mamoth company with so many markets in the car industry, they could not build a successful central management team that could run all of this. And those companies that were run by *individual* management teams could not success on their own. So Ford could not be run as one cohesive company, nor as seperate companies run unilaterally, where the parts make up the sum.

3) It is *very* possible, and in fact my dream, that Apple will become successful enough to use their stockpile of money to directly challenge Microsoft in the corporate segment, which competing business software, a better OS, better hardware, better or non-existant licensing agreements (where Microsoft is really vulnerable, and will be their downfall), but it is important to not *why* that should not be the path they should take now, and may *never* be the path they should take, and merely a dream on my part.

You see, Apple is really pretty self-sufficient. They have the talent, and the ability to build new market segments within the consumer and corporate technology market. If there is a need for an iPod that also plays movies, they can make it. If they need a phone that also works as an iPod and has a bigger screen for movies, they can make it (and do much more, clearly). If there is a need for easier, more simplified business software, they can make it. If there is a need for a laptop that is thin, and has a great battery life, just watch, they will be able to make it.

Apple has the ability to steer their own ship, and this is proving to be a *very* dangerous competitor. They don't need to spend 11 billion. That doesn't mean they are *afraid* to spend it. Life is like a game of chess, you only make neccessary moves, and you only make moves that have a *point* and a *plan*. Any decisions you make need to be forward-thinking and long-term. Why spend money when you don't need to?

By the way, for the individual who stated Microsoft makes 50 billion per year in profits, it's very fascinating when people overstate how many this company makes. They made an amazing $14 billion last year, and that's just incredible. With that said, one of the big reasons people do this is because they percieve Microsoft to be invincible, and really the ultimate in profitability.

There is no doubt Microsoft is a behemoth, but they have potential to be one of the great lessons of business. Their business model has been to build kind of a large platform with suppliers cooperating to make a whole product. As with any business model, it has its advantages and its *disadvantages*.

I think it needs to be understood that while this platform business model was a success, that doesn't make it the *best* business model, and ultimately, it could only be the *best* business model for the time it was implemented, during the rise of PCs. As computers become a commodity, the consumer's viewpoint of computers is going to change. They will be willing to spend less, and there will be a need to bring down costs. The advantage Apple has is that while the *general* public may view things that way, there will always be a demand for better quality, and there is a willingness to pay for that. Believe it or not, Apple can also cut the cost of its product to compete, by the way. The problem is, Microsoft depends on their licenses. They need that money to have revenue. They don't make money off their consumer electronics, they LOSE money. No licensing, no Microsoft.

As computers become a commodity, what is going to happen to the general consumer's willingness to have tied-in costs to an operating system such as Microsoft's. Couple that with Microsoft's inability to innovate, and the fact that the supply method they use to ship their software will be challenged, and Microsoft is extremely vulnerable, and the end of $14 billion/year profits could be in the forseeable future. Sure it can take awhile for an elephant to fall, but fall it may.

When it happens, it's going to be because Microsoft is their own worst enemy, and the business model of dependance on licensing fees is no longer tolerated. Businesses are already challenging this arrangement, and so will others. Companies like Apple will be able to leverage this vulnerability and offer an alternative to those who will listen.

I've said this 4 years ago, and I'll say this again, there are forces that will challenge Microsoft, and it is possible in the end that Steve Jobs has the best business model, and not Bill Gates. It is quite possible that Microsoft's biggest assest was that they were in the right place at the right time, and that asset will only get you so far in the end. It's time for us to "Think Different", and throw old assumptions we were taught during the times of a bubble out the door.

bretm
Jul 25, 2007, 10:39 PM
iPhone - 1 million sold in 1 quarter:)

Zune - 1 million sold in 1 year:(

Why not compare Apples to Apples. Zune, 1 Million in 1 Year. iPod, 9.8 million in one quarter!

slughead
Jul 25, 2007, 10:43 PM
In spite of these numbers, I think Apple was expecting more. I think they were trying to sell out the first day, which didn't come close to happening.

I won't put numbers to it, except to say these numbers are high, but I don't think they surprised anybody by how high they were.

Obviously, the street expected around a half million (see appleinsider), which Apple may not have been able to deliver.

Personally, I didn't know what to expect. 270k in 30 hours is not that high if you put it in the perspective of iPods which sold 9.8 million units in Q307. If you do the math, that's roughly 174k every 30 hours . Naturally, people were waiting and saving to buy the iphone, so it's safe to say sales declined exponentially as the first days went by.

I think 10 million units by december 2008 is not as lofty as it seems. They're naturally tapping into their ipod customer base, who will probably buy an iphone in lieu of an ipod.

So, in short, Apple's a $100 billion company that sold a bunch of crap, is anyone surprised?

johnnybluejeans
Jul 25, 2007, 10:46 PM
guys, dont forget, tomorrow will be a very big day, buy now before its too late!

A bit late for that isn't it?.. Given the after hours trading at $150.

zombitronic
Jul 25, 2007, 11:02 PM
while an exageration he does have a point. $500-$600 is WELL outside the spending range for most average people. If this was a laptop sure. Buts its a damn phone at the end of the day.

The damn phone feature consumes about 5%-10% of my overall usage. What does that make the rest of it, then? A damn video player? A damn camera? A damn iPod? A damn computer of the damn future, even? Damn.

I'd guess that the rest of it is what made the iPhone sell more units it's opening weekend than the next best selling wireless device in AT&T's history sold in over a month.

bretm
Jul 25, 2007, 11:03 PM
bla bla bla iPhone bla bla bla macbook pro has not seen redesign in ages, bla bla bla iToaster bla bla Mac pro is nearly 1 year old with fake 8 core bla bla bla iMicrowave bla bla No Leopard bla bla iCanoe bla bla bla No iLife bla bla iToilet bla bla

Where is your bearing :apple: ?

They just had their record quarter in Mac sales. Best quarter EVER. So what's your sage advice for them? C'mon Apple, like, hey, the MacBook isn't cool enough... blah blah blah complain complain blah blah no update yet blah blah can't ever do anything right blah blah going to go under blah blah. Sheesh.

In spite of these numbers, I think Apple was expecting more. I think they were trying to sell out the first day, which didn't come close to happening.

I won't put numbers to it, except to say these numbers are high, but I don't think they surprised anybody by how high they were.

Obviously, the street expected around a half million (see appleinsider), which Apple may not have been able to deliver.

Personally, I didn't know what to expect. 270k in 30 hours is not that high if you put it in the perspective of iPods which sold 9.8 million units in Q307. If you do the math, that's roughly 174k every 30 hours . Naturally, people were waiting and saving to buy the iphone, so it's safe to say sales declined exponentially as the first days went by.

I think 10 million units by december 2008 is not as lofty as it seems. They're naturally tapping into their ipod customer base, who will probably buy an iphone in lieu of an ipod.

So, in short, Apple's a $100 billion company that sold a bunch of crap, is anyone surprised?


They were expected to sell 500k over the weekend. Seems nobody has added up Sunday yet. And Apple could have sold more if they didn't sell out at some stores by Sunday. Apple did not want to sell out on Friday. What good does that do? Hey people want to buy my stuff. It looks cool that I sol d out, but we're not making any money off those that couldn't buy one that wanted one. Apple purposely had it's supply chain stacked up so that they didn't sell out. Most likely for the sake of the eBay world. Since phones are readily available, they can't be sold for ridiculous prices on eBay. Apple doesn't get any cut of the extra sale price on eBay!

Like the Wii. All impressive that they are always out of stock. But that's horrible for Nintendo. That's lost revenue in a big way. Many of those will buy something else, or pay huge dollars on eBay.

1. apple is claiming $5M profits on 270K phones. that's $18/phone.
2. consensus seems to be they're getting $9/mo/phone from AT&T -- since that's pure profit they should be getting $7.2M/quarter for the next 8 quarter from these iphone sales. hm. ok.
3. they supposedly got a bounty from AT&T on iphone sales. reports were $150-200/phone -- but even if you go with AT&T's 146K report, that should have been a minimum of $22M, not $5M.

something doesn't add up. was there a bounty? if so, is it spread out over the 24 months? if so, that would add $6/phone alone.

something isn't jiving here. could AAPL be lowballing this? maybe they booked advertising or some R&D against the iphone profits? $18/phone just doesn't seem to match up to anything.

All the profits from iPhone and iPhone related stuff is now being reported as a subscription type service, including the price of the phone. So basically the profits are being depreciated over a 24 month period since that's the minimum commitment. Most likely works out better for Apple for tax purposes, and smooths out quarterly earnings and such for the stock market. As more and more phones are out there, the profits will show a steady climb as more and more phones are sold and are EACH being reported as profit every month. Otherwise they'd have huge profits this quarter, and next year, very low profits unless it happens to coincide with another new product release. Make sense?

eazyway
Jul 25, 2007, 11:46 PM
Yah for a company who's yearly profits topped 50 BILLION. Yah. Nowhere fast.:rolleyes: I'd love to see Apple try for 50 billion in a year's time.

Get your numbers right; $12m profit/ $44m Revs for their last FY. In this fiscal year MSFT's profit will be 3x Apples and the REVs will be 2x. Come back in 5 years and compare them then. It might be very interesting to compare.

theBB
Jul 26, 2007, 01:08 AM
Personally, I didn't know what to expect. 270k in 30 hours is not that high if you put it in the perspective of iPods which sold 9.8 million units in Q307. If you do the math, that's roughly 174k every 30 hours .
Well, iPod is sold worldwide. Besides, $79 iPod having a higher volume than $600 gadget is not exactly a revelation.

I don't understand why so many people are trying so hard to put a negative spin on this. I don't know if Apple can sustain iPhone sales, but considering the price Apple probably had the best single country opening weekend sale of any electronic product in history.

boss1
Jul 26, 2007, 01:30 AM
don't count your chickens before they hatch....nuff said. Well maybe not enough said. Especially when the rules for counting change just before the hatching.



We have determined that it is the right time to begin measuring our retail segment operating performance in a manner that is generally consistent with the way we measure Apple's other operating segments... -Oppehnheimer

I'm no expert in the translation of ambiguously vague statements but could they now be counting sales to Apple stores at the time that the product is shipped to Apple retail stores also? Not trying to seem skeptical towards Apple's accounting practices, I tend to be skeptical towards everyones accounting practices ;).

It just seems very convenient to fix your counting methods to satisfy the large amount of investors dumb enough and rich enough to sink the company stock on the news of a low number sold.

So 270k iPhones includes #of units shipped to AT&T stores and shipped to Apple stores by end of quarter? I'm not stating that as fact but it would justify the gap between 146k activations and 270k Apple says it sold....that's all. It would also include units in transit (not delivered) and of course not include online sales.


Also
They sold 270,000 of "iPhone and Related Products and Services (6)", where footnote 6 reads:

"(6) Consists of iPhones and Apple-branded and third-party iPhone accessories."

Apple verbally stating 270k actual iPhone units sold when asked about this ambiguity strikes me as odd. A 6th grader could read that statement and infer that it means iPhones sold + other stuff sold = 270k.

macftw
Jul 26, 2007, 01:39 AM
I don't understand why so many people are trying so hard to put a negative spin on this. I don't know if Apple can sustain iPhone sales, but considering the price Apple probably had the best single country opening weekend sale of any electronic product in history.

I don't think people are trying to spin it in a bad way. The reality is that the expectations were that Apple had sold in the range of 200-700K phones in the "launch" (however you define that in terms of hours). And it now seems they landed at the lower end of that range.

Which makes sense. Apple stores handily caught up with the lines on the Friday launch, and had plenty of phones in stock the next day.

Demand simply wasn't as high as they had hoped. Which doesn't make it any less of a great device. It just means it will take them longer to develop a serious market than they thought.

Project
Jul 26, 2007, 02:04 AM
Demand simply wasn't as high as they had hoped.


And how you know this?

The fact that most of the stores were sold out within a few days until new supplies came in suggests to me that they called it just about right in terms of initial demand on that weekend.

MacFly123
Jul 26, 2007, 03:08 AM
So they said they plan on adding features and updates by software. Well here is your sneak peak, my friend works for Apple and sent this my way. Finder, MMS, and other things that are not apparent from the main menu pic will be added he claims :) Finally I can buy mine now :D :apple:

inkswamp
Jul 26, 2007, 03:54 AM
So they said they plan on adding features and updates by software. Well here is your sneak peak, my friend works for Apple and sent this my way. Finder, MMS, and other things that are not apparent from the main menu pic will be added he claims :) Finally I can buy mine now :D :apple:

If I give you two very good reasons why that image is obviously fake, will you do me the favor of no longer posting it to every thread you can justify? I've seen you post it to more than one thread, and each time it strikes me as a fake. Either you're trying to dupe us here on this site or someone is duping you. The latter is only marginally more justifiable than the former, btw.

I've done professional graphic design work and there's this concept in design concerning padding of an image. It's not really something I've seen taught, but rather something you get a good sense of the more you do design work. For example, if you have a logo or image in a box, an experienced graphic designer knows how to float the logo in the box so there's just the right amount of padding around the logo, between it and the box. Not too much, not too little. A designer with a good eye can get it so it floats there, just right, looks right and feels right. It's hard to explain, but it's one of those esoteric design things that separates the amateurs from the pros. You know it when you see it.

Look at the buttons (except the Finder button) on the iPhone. Those images float just right in their button frames. A skilled and experienced pro did those. Now look at the Finder button. That's clunky. It's just... not right. The top lines bump the edges and the sides don't. The eyes are too close to the edges. It's just off. Someone else with considerably less design skills did that button.

The other reason I'm sure this is fake is that companies are extraordinarily protective of their branding and logos. Bigger companies frequently produce and distribute design bibles to their marketing people. This bible defines right down to the very last pixel, how any logo or branding element is allowed to be used in any medium, the colors, the background, the surrounding elements, etc. This is done to present and maintain a consistent look and it's a very good idea.

There is no way in hell Apple is going to present one of their most famous branding elements (the Mac Finder face) cropped and anamorphically squeezed like that. It's awful. It's laughable. That's not a button designed by Apple.

Now, before you counter with the possibility that this button design is a prototype, please consider that the rest of the image looks like a polished marketing image--clean and clear and good color and very attractive. If it were real, it would stand to reason that it would be a final marketing image which would mean that no traces of early work or prototype button designs would be a part of it.

So, it's fake. Sorry. Whoever this friend is who claims to work for Apple and has passed this along to you is pulling a fast one on you.

rubberduck007
Jul 26, 2007, 04:20 AM
I think it's a pile of Zand in the desert!

it's a pile of something.. i tell thee!

gnasher729
Jul 26, 2007, 05:12 AM
you're mistaking revenue with profit.

2006 revenue...

MSFT: $44.6 B
AAPL: $19.32 B


2006 Net Income...

MSFT: $12.6 B
AAPL: $1.73 B

Apple have a while to go yet it seems to match MSFT's profits or revenues.

I'll give it a good 3-5 years.;)

Since 2006, Apple had one christmas season quarter with $1.00B, and the last quarter was over $800 million. These two quarters alone are more than 2006.

1. apple is claiming $5M profits on 270K phones. that's $18/phone.
2. consensus seems to be they're getting $9/mo/phone from AT&T -- since that's pure profit they should be getting $7.2M/quarter for the next 8 quarter from these iphone sales. hm. ok.
3. they supposedly got a bounty from AT&T on iphone sales. reports were $150-200/phone -- but even if you go with AT&T's 146K report, that should have been a minimum of $22M, not $5M.

something doesn't add up. was there a bounty? if so, is it spread out over the 24 months? if so, that would add $6/phone alone.

something isn't jiving here. could AAPL be lowballing this? maybe they booked advertising or some R&D against the iphone profits? $18/phone just doesn't seem to match up to anything.

Listen carefully to the conference call, where it is all explained.

By the way, your very first line "Apple is claiming $5mil profits" is already wrong. So go to the webpage, listen to the call, and listen very carefully.

TPALTony
Jul 26, 2007, 05:12 AM
thats 2.5 per second, that is truly impressive

Actually it's much higher than that, because the stores stayed open till midnight (with the exception of the 24 hour stores) and then re-opened at 9am. Since the numbers do NOT include online sales that had not shipped, that means the number is purely from retail stores (from both firms.)

So if you take 9 hours out of the equation, then instead of 270,000/(30*60*60) it's 270,000/(23*60*60) which is 3.25 phones a second!

Numbers like that not only suggest product marketing success, but logistical success. If they had sold the iPhone like any other phone, it would have taken 30 minutes a person to buy one! They really did come up with a lot of innovation outside the phone itself on this. Forget the technology and how cool it looks. Assuming it is a success, the iPhone will end up as an MBA case study in product launch strategy. All credit to Apple. Free media galore and aside from some AT&T activation issues, incredibly smooth launch.

be well

t

ABM
Jul 26, 2007, 05:21 AM
So, it's fake. Sorry. Whoever this friend is who claims to work for Apple and has passed this along to you is pulling a fast one on you.
I think you are right!

TPALTony
Jul 26, 2007, 05:30 AM
Why not compare Apples to Apples. Zune, 1 Million in 1 Year. iPod, 9.8 million in one quarter!

Just to be clear, I HATE the Zune. It's tacky and it comes in brown!! :)

Also, I love Apple. I think I own one of most things they currently sell!

BUT, if you really want to compare apples for apples (very punny)...

On the call, they stated "It took us two years to sell a million iPods, we're hoping to sell a million iPhones in one quarter."

So, TWO years to sell a million iPods versus 1 year to sell a million Zunes. Fear not for I am not about to tell you how much better the Zune is. Read on... :)

I love Apple, but lets not crow over statistics that are clearly not comparable. iPod is an established product with an entire built ecosystem around it. Zune is nowhere near that point (and with luck never will be!) One thing I firmly believe is that if Zune had been launched in 2001 like the iPod was it would have taken WAY longer than a year, or even two years, to sell a million of them. They sold a million in a year because they are playing in a market that Apple built. OK, there were others before Apple, but Apple made it "cool" and usable for the average person and made the masses aware of it. Microsoft is living in Apples halo to some extent. But with the upcoming (surely!) iPod updates they will once again be pushed aside. Why? Because they don't move fast enough. The next iPod revision will be the longest gap ever between revisions since it went mainstream, and even then it's way quicker than Microsoft can get a new revision of anything to the market. Microsoft is new at hardware on this scale (meaning size of device and size of market) and they simply can't innovate quickly enough OR productize quickly enough. I would be surprised if Apple doesn't ALREADY have people working on the 7G iPod and 8G iPod. They have the train moving nicely down the track. Microsoft are still fiddling with the controls in the engine room!

Look at the product releases from Apple over the last 18 months...

...TV shows.
...Movies.
...Coverflow.

All seemingly announcements in their own right, but they ALL come together when the iPhone was launched...

..Widescreen video iPod (oh, and we happen to have tv shows and movies to watch on it.)
..Coverflow in landscape on the iPod. Established feature, looks familiar.

It's wonderfully orchestrated. Microsoft just don't demonstrate an ability to do things like that.

And that's why, in the retail electronics space, Apple is years and years ahead of them, and will stay that way as long as they don't make too many huge mistakes!

Just my 2c. :)

be well

t

TPALTony
Jul 26, 2007, 05:37 AM
Apparently directed at growing Mac sales ... at a rate greater then the market is growing. ...and growing iPod unit volume ...and launching a new product that is so far well received and selling well.

Curious on why folks think that the Mac Book Pro needs a redesign? It is well designed kit using the latest technology available.

I replaced my MacBook (first revision) with the SR based MacBook pro, and I can see peoples point...

1) The keyboard is nicer on the MacBook.
2) The lack of a clasp to hold the screen shut is nice. It's a fiddle for me to press the very thin button in to press it.

I'd like to see (not too soon please or I'll be forced to buy one!) a MacBook Pro with a MacBook style approach. But having said that, neither of those things bug me particularly. I love my MacBook Pro. The LED screen is amazing and the speed is unbelievable! These things matter more to me than the case. Although I admit the case is one of the reasons I prefer Apples to boring PC laptops, it's more than a LOT better than the competition already, so I can live without a new look MacBook Pro for a good while (like till my bank account is refilled from buying this one!) :)

be well

t

nuvs
Jul 26, 2007, 05:41 AM
Personally, I didn't know what to expect. 270k in 30 hours is not that high if you put it in the perspective of iPods which sold 9.8 million units in Q307. If you do the math, that's roughly 174k every 30 hours . Naturally, people were waiting and saving to buy the iphone, so it's safe to say sales declined exponentially as the first days went by.
(emphasis in quote added by me)

Your math is wrong; it's 134,250 iPods every 30 hours, half what the iPhone sold in the first 30 hours. The math:

365 days year 4 quarters = 91.25 days/quarter

9,800,000 iPods 91.25 days = 107,397 iPods/day

107,397 iPods/day 24 hours/day = 4,475 iPods/hour

4,475 iPods/hour x 30 hours = 134,250 iPods in 30 hours

So, in short, Apple's a $100 billion company that sold a bunch of crap, is anyone surprised?

Huh? What did you mean by this comment?

jouster
Jul 26, 2007, 06:53 AM
So they said they plan on adding features and updates by software. Well here is your sneak peak, my friend works for Apple and sent this my way. Finder, MMS, and other things that are not apparent from the main menu pic will be added he claims :) Finally I can buy mine now :D :apple:

Aside from the reasons given re the graphics work, I think there's another way to tell that this is fake: Apple understands that a handheld device needs to interact with the user in a specific, well-designed way. What it should *not* be is an attempt to recreate the full desktop experience. That's what my Windows Pocket Edition, or whatever it's called, does and does badly. That's why 100 million people bought iPods and could care less about having a tree structure so they can drag their ogg vorbis files like the fan boys on dapreview. Apple made a terrific phone OS which is going to influence that space for a long time to come. They are not going to import full OS X features willy-nilly unless there's good reason to.

dernhelm
Jul 26, 2007, 07:38 AM
something isn't jiving here. could AAPL be lowballing this? maybe they booked advertising or some R&D against the iphone profits? $18/phone just doesn't seem to match up to anything.

Of course Apple booked R&D, advertising, coffee, notebooks, electricity, sticky notes, pencils and just about every other imaginable expenditure against their profits. If they didn't, they wouldn't be profits now, would they?

Yankees 4 Life
Jul 26, 2007, 07:39 AM
Did anyone else catch that they arent planning to lower prices on the iPhones anytime soon due to customer satisfaction? I swear i read that from TUAW (www.tuaw.com).

ttutsch
Jul 26, 2007, 08:11 AM
Does anyone know when they are going to start allowing free upgrades to Leopard with new Macs? It seems that since the release time has been announced, they should start offering that upgrade to keep sales healthy and also to save customers from buying software with a short "best-before" date.

megfilmworks
Jul 26, 2007, 08:33 AM
Now that's more like it. ATT can't fudge activation numbers in their reports, but they can fudge activation problems, way under reporting them, as they can credit the difference between their numbers and Apple's as gifts, people waiting for activation and activation refused due to credit.

FJ218700
Jul 26, 2007, 08:36 AM
who said AAPL $144 today?

We're already at $146 at 9:30 am.

Eraserhead
Jul 26, 2007, 08:38 AM
Does anyone know when they are going to start allowing free upgrades to Leopard with new Macs?

When Shipping is announced, that is how Apple runs their company.

megfilmworks
Jul 26, 2007, 09:23 AM
Just saw a feature on the Today show about iPhones disappointing sales.
Talk about spin from the major corps losing in this battle. How can anyone see these figures that blow away any cell phone ever sold and say the figures are weak?? Can you say "Over blown analyst's prediction?"

David Sharpe
Jul 26, 2007, 09:33 AM
Sounds like the original 1% or 2% had activation issues, is probably closer to 38% had activation issues given their 176,000 only activated.

Exactly, AT&T screwed up bad. What's worse is what happened to Apple stock the day AT&T reported quarter results.

Dave

who said AAPL $144 today?

We're already at $146 at 9:30 am.

AAPL was at $150 last night

FJ218700
Jul 26, 2007, 09:38 AM
if true, then my bad, was going by the stocks widget.

slughead
Jul 26, 2007, 09:46 AM
4,475 iPods/hour x 30 hours = 134,250 iPods in 30 hours

Close enough. The point being that people had been waiting to buy this product for months and even with all the hype, they only did twice what the iPod does routinely.

Comparing this to the initial ipod release isn't even fair, because I don't think there's anyone out there who didn't see this as an 'iPod phone' and already thought of it as the latest revision of the ipod which they probably already own. So much so I that I'd wager almost 100% of iPhone buyers had previously owned an ipod.

Huh? What did you mean by this comment?

I mean put the numbers in context: Just because they sold a ton of units doesn't mean the product is doing well. You have to sell what you need to sell in order to make a profit, and be profitable at the rate you want.

Apple profited $818m on sales of $5,410m last quarter. That's a profit margin of 15.1%.

That means, to keep up with the profitability of their other products, the iPhone has to make at least that much. Keep in mind the iphone could've cost upwards of $10m to develop, plus the hype machine which could've easily been $5m, plus the lost sales from postponing leopard, plus the lost sales of not hyping their mac offerings for a while (it's a marketing thing), and you have a serious investment that has to be paid off and get a 15.1% profit or higher.

If Apple can't make that much money off the iPhone, they'll probably drop the product.

Now, I think that they will make at least that much, but bearing in mind it's all for **** until they do, this 270k is not that much.

People think that 270k in the first day is 'amazingomfg1!', but it's like opening weekend at the box office: sales decline exponentially after the first day, so estimating total future revenues from the first day is really pointless (though it's less so with movies, for obvious reasons).

Let's not forget that Zune sold a crapload of units the first day it came out. We all know where that is ending up.
------------------------------

And by the way, someone was saying Apple only made $18/phone (they took the $5m recorded and divided it by 270k). This is wrong.

I've taken 2 years of accounting courses. Apple is doing what is called 'deferment' with their sales numbers. This means they mark some of their transactions as "not marked as revenue yet but it's assured we will." If you look at the deferred revenue for the iPhone/AppleTV/iPhone Accessories (they combine these in their statements), it's actually $180m. We'll say most of that is from the iphone just for kicks.

270/180000 is about $670/phone, minus the other stuff they lumped in which is of unknown value.

I think they're keeping the exact dollars in revenue a secret on purpose, I wont conjecture why. Also keep in mind that this is only revenue, not profit.

That $5m number is simply what they've bothered to mark as their revenue, for various reasons. They admit though that they will add $180m to their 'revenue' numbers soon.

So $18/phone is a silly number.

shawnce
Jul 26, 2007, 10:09 AM
Close enough. The point being that people had been waiting to buy this product for months and even with all the hype, they only did twice what the iPod does routinely.

Comparing this to the initial ipod release isn't even fair, because I don't think there's anyone out there who didn't see this as an 'iPod phone' and already thought of it as the latest revision of the ipod which they probably already own. So much so I that I'd wager almost 100% of iPhone buyers had previously owned an ipod. Ok I'll take that bet? $10k OK with you? You talking 99%+ 95%+, etc. what?

iPod is an established product with a product matrix that starts with pricing around $100 and tops out below the iPhone. iPod doesn't have a contractual agreement involved. iPod doesn't have a single cellular carrier involved. iPod is sold worldwide, iPhone is not yet. iPhone is entering a market packed with all kinda of devices (features sets and price points) and many well established players, etc.

You can only do minimal comparisons between the iPod and iPhone... so your (any) attempts to compare them are really pointless.

270k is a good start for the initial sales burst and clearing a million (which they seem confident in doing) by the end of FYQ4 is also a good sign. The existing iPhone isn't the end of this run... they will expand the markets they sell it in, they will expand the product matrix, and they will expand the feature set. All of that coupled with the high customer satisfaction (results in good word of mouth... of which I personally have seen 2 additional phones sold after they used mine for a short bit) will result in steady sales and accelerating sales at various points in time.

Yankees 4 Life
Jul 26, 2007, 10:17 AM
aapl ^10.72 to 147.98.... I'M RICH BIOTCH!!! I love you stevie!

slughead
Jul 26, 2007, 10:31 AM
Ok I'll take that bet? $10k OK with you? You talking 99%+ 95%+, etc. what?

iPod is an established product with a product matrix that starts with pricing around $100 and tops out below the iPhone. iPod doesn't have a contractual agreement involved. iPod doesn't have a single cellular carrier involved. iPod is sold worldwide, iPhone is not yet. iPhone is entering a market packed with all kinda of devices (features sets and price points) and many well established players, etc.

You can only do minimal comparisons between the iPod and iPhone... so your (any) attempts to compare them are really pointless.

270k is a good start for the initial sales burst and clearing a million (which they seem confident in doing) by the end of FYQ4 is also a good sign. The existing iPhone isn't the end of this run... they will expand the markets they sell it in, they will expand the product matrix, and they will expand the feature set. All of that coupled with the high customer satisfaction (results in good word of mouth... of which I personally have seen 2 additional phones sold after they used mine for a short bit) will result in steady sales and accelerating sales at various points in time.

I think we're agreeing on most points: 270k is good but not 'amazing' and almost all iPhone buyers own or have owned an iPod.

I was also only comparing the iPhone to the iPod as far as impact on Apple's revenues. I believe I even said comparing the sales in another context "isn't fair".

johnee
Jul 26, 2007, 10:38 AM
Sounds like the original 1% or 2% had activation issues, is probably closer to 38% had activation issues given their 176,000 only activated.

Exactly, AT&T screwed up bad. What's worse is what happened to Apple stock the day AT&T reported quarter results.


just because someone bought an iphone doesn't mean they tried to activate it right away. please stop being a fanboy and think.

megfilmworks
Jul 26, 2007, 10:41 AM
I think we need a word for people who can't resist the term "fanboy"
Any suggestions?

teflon
Jul 26, 2007, 11:06 AM
Comparing this to the initial ipod release isn't even fair, because I don't think there's anyone out there who didn't see this as an 'iPod phone' and already thought of it as the latest revision of the ipod which they probably already own. So much so I that I'd wager almost 100% of iPhone buyers had previously owned an ipod.


According to the iPhone Buyer Statistics, which was posted on front page MR (http://www.macrumors.com/2007/07/13/iphone-buyer-statistics-o2-confirmed-for-uk/)
• 3 of 10 were first-time Apple customers.
• for 4 of 10, the iPhone was their first iPod


So iPhone is venturing into a market that Apple hasn't ever before, getting new customers that have never considered Apple before, and furthering the Apple brand. To me, that's a success.

Project
Jul 26, 2007, 11:11 AM
Not sure how 270,000 is 'good', when it destroys the sales record of any other phone in AT&T history.

shawnce
Jul 26, 2007, 11:23 AM
Not sure how 270,000 is 'good', when it destroys the sales record of any other phone in AT&T history. Actually I had meant to say "270k is a great start..." in my original post. ...given that it is a 1st generation product from a company new to cellular and has a high price point compared to industry norms (not just limiting it to "smart phones").

rtdunham
Jul 26, 2007, 11:41 AM
Suggesting $148.08 total revenue per iPhone. (Granted this is just a very general ballpark figure, given the factors stated above. But holy smokes, that's a nice ballpark to play in. My understanding is that most consumer electronic gear has super thin margins - 27% is quite an achievement.)

didn't apple say it did not book iPhone revenue for the last 2 days of the quarter, but would begin booking revenues THIS quarter?

didn't it say the $5M was for accessories?

or am i remembering incorrectly?

hardmanb
Jul 26, 2007, 12:13 PM
[You can only do minimal comparisons between the iPod and iPhone... so your (any) attempts to compare them are really pointless.]

I think there are some interesting comparisons. Both iPod and iPhone are consumer products introduced by Apple at similar prices, the initial 20G iPod being $500 and the iPhone $499 and $599. They are both products being introduced by a "first-time manufacturer" with no prior product experience...into a large and mature market will many manufacturers of many models at cheaper price points.

Both products were the target of much anti-Apple publicity, predictions of failure and false expectations. Both products were predicted for failure by the "experts", who claimed that they were too expensive for the actual features. Both products are clearly aimed at the consumer market, the "rest of us", and both products depend on consumer differentiation based on being a more user-friendly interface and user experience. Both products are criticized as "nothing new or innovative" but just an arrangement of features offered on existing products at much lower cost. In both cases, Apples failure was predicted "now that they are taking on the big boys".

In both cases, there was dismissal of their impact as merely "Apple hype", and the sales were attributed to "only the fanboys" and the early success would be a fading "fad". In both cases, the competition rushed "iPod-killers" and "i-Phone killers" to market, attempting to clone Apple features.

Somehow, "it looks like deja vu, all over again". Same game, different competitiors. This is so interesting. Can the wireless carriers, cellphone manufactures, Microsoft, PC-experts, core-development community, IT departments, Symbian, Palm and Blackberry be successful and kill the iPhone? Or will Steve Jobs once again be voted "Entrepreneur of the Year"?

rtdunham
Jul 26, 2007, 12:15 PM
You know, I feel bad. That last comment came off as way too snide. I get the love of the company. I have two macs, had two ipods, and have slowly converted my family into Apple people. So I get it. But sometimes (especially now with the stock at 150) I worry that "irrational exuberance" will lead to a lot of small time investors getting hurt in the short run, which isn't good for anyone.

BlueT, you sound like a good person to answer this question, which might put the stock price in a more subjective perspective:

what's the p/e for the quarter just ended, given the exceptional results?

thanks
terry

...Microsoft...made an amazing $14 billion last year, and that's just incredible.

I appreciated your lengthy analysis. Thanks. The statement above reminded me that I think i'd noticed MS's net income was a considerably higher % of revenue than apple's. Is that correct? And if so, do you have an opinion on why that's the case? I thought apple had pretty high margins.

thanks

shawnce
Jul 26, 2007, 12:50 PM
I appreciated your lengthy analysis. Thanks. The statement above reminded me that I think i'd noticed MS's net income was a considerably higher % of revenue than apple's. Is that correct? And if so, do you have an opinion on why that's the case? I thought apple had pretty high margins. Apple primarily sells hardware, Microsoft primarily sells software. Software has very high margins (given most of the cost involved is booked as R&D and the cost of production of software is minor).

Yankees 4 Life
Jul 26, 2007, 01:17 PM
BlueT, you sound like a good person to answer this question, which might put the stock price in a more subjective perspective:

what's the p/e for the quarter just ended, given the exceptional results?

thanks
terry



I appreciated your lengthy analysis. Thanks. The statement above reminded me that I think i'd noticed MS's net income was a considerably higher % of revenue than apple's. Is that correct? And if so, do you have an opinion on why that's the case? I thought apple had pretty high margins.

thanks

also, when looking at msft, software is much much cheaper to process and also cheaper to market. you can proliferate the market with software much faster than you can with hardware. Thats why Dell will never get to the heights Msft has with its windows programs.... I cannot wait till june 08 when i buy a mac!

cliffjumper68
Jul 26, 2007, 01:21 PM
Nice to have real data on items sold versus those activated.

jouster
Jul 26, 2007, 01:31 PM
Does anyone know when they are going to start allowing free upgrades to Leopard with new Macs? It seems that since the release time has been announced, they should start offering that upgrade to keep sales healthy and also to save customers from buying software with a short "best-before" date.

Perhaps you didn't notice that this is a thread for iPhone discussion?

shawnce
Jul 26, 2007, 01:32 PM
what's the p/e for the quarter just ended, given the exceptional results? P/E changes with the stock price so it is best to just wait until various stock sites update their EPS (ttm) values to include the Q3 results. They should update very soon.

With that said and without attempting to do any math (or looking up Q3 06 numbers, etc.) I bet the trailing P/E is under 40 but above 35 at the moment if you include Q3 results.

slughead
Jul 26, 2007, 01:55 PM
According to the iPhone Buyer Statistics, which was posted on front page MR (http://www.macrumors.com/2007/07/13/iphone-buyer-statistics-o2-confirmed-for-uk/)


So iPhone is venturing into a market that Apple hasn't ever before, getting new customers that have never considered Apple before, and furthering the Apple brand. To me, that's a success.

I stand corrected. Only 60% of iPhone customers are iPod buyers (which means iPhones will invariably tap into iPod sales)

It looks like the analysts agree with me (http://www.appleinsider.com/articles/07/07/26/analysts_up_targets_as_apple_valuation_surpasses_hewlett_packard.html) (like I said in a previous thread) that iPhone sales aren't going to be a major cash-cow for Apple (in the short term, I'm guessing).

Mac sales seem to be the real hero here, looking at the data. I strongly disagree with the notion that the iPhone (and diversion of some of the OS X team to work on iPhone) is somehow going to be beneficial to the mac. To me, doing two things at once doesn't mean they both end up better than one at a time. Leopard was postponed due to this; that's a fact. To me, that means Apple's hurting mac to help iPhone development (even if only temporarily). Apparently, I'm alone on this.

teflon
Jul 26, 2007, 02:30 PM
Mac sales seem to be the real hero here, looking at the data. I strongly disagree with the notion that the iPhone (and diversion of some of the OS X team to work on iPhone) is somehow going to be beneficial to the mac. To me, doing two things at once doesn't mean they both end up better than one at a time. Leopard was postponed due to this; that's a fact. To me, that means Apple's hurting mac to help iPhone development (even if only temporarily). Apparently, I'm alone on this.

iPhone is a great advertisement for Apple and it gets more people to know the brand name. 30% iPhone buyers are first time Apple customers, and they may have never touched an Apple product if it weren't for iPhone. Now, these people will have a small taste of OSX and the overall great design and simplicity of an Apple product. They might then consider getting other Apple products such as Mac, Apple TV etc. A survey showed that 20% of iPod owners will get a Mac as their next computer. iPhone may have the same effect in switching people over. Also, the profit from iPhone, however small you might think it will be, still benefits Apple. It can go to the R&D of Mac if needed. All around, I think it's a good thing that Apple has more than one thing going for it.
Also, its normal that products will tap into each other's sales. Mac mini taps into iMac's sale, iMac (especially the 24'') taps into MP's sale, mb taps into mbp's sale. iPhone may tap into some of iPod's sales, but its also getting Apple sales that it otherwise wouldn't have gotten. To Apple, there's no difference between the profit from iPhone or profit from iPod. Its all profit for them. However, the profit that Nokia gets from the cell phone market isn't. Diversifying their interests allows them to reach out to more customers, thus getting more profit and users in the end.
Edit: Mac has been on sale for the last 30 years, iPhone has been on sale for the last 30 days. Of course Macs have a larger, more established market than iPhone right now. Plus, there's only 30 hours of revenue coming from iPhone, as oppose to 3 months for Macs.

megfilmworks
Jul 26, 2007, 05:47 PM
I would think that a large percentage of new Apple customers who have entered via the iPhone will be getting a Mac, if not a few Macs. How could you resist if you love the iPhone?

MacFly123
Jul 26, 2007, 06:50 PM
If I give you two very good reasons why that image is obviously fake, will you do me the favor of no longer posting it to every thread you can justify? I've seen you post it to more than one thread, and each time it strikes me as a fake. Either you're trying to dupe us here on this site or someone is duping you. The latter is only marginally more justifiable than the former, btw.

I've done professional graphic design work and there's this concept in design concerning padding of an image. It's not really something I've seen taught, but rather something you get a good sense of the more you do design work. For example, if you have a logo or image in a box, an experienced graphic designer knows how to float the logo in the box so there's just the right amount of padding around the logo, between it and the box. Not too much, not too little. A designer with a good eye can get it so it floats there, just right, looks right and feels right. It's hard to explain, but it's one of those esoteric design things that separates the amateurs from the pros. You know it when you see it.

Look at the buttons (except the Finder button) on the iPhone. Those images float just right in their button frames. A skilled and experienced pro did those. Now look at the Finder button. That's clunky. It's just... not right. The top lines bump the edges and the sides don't. The eyes are too close to the edges. It's just off. Someone else with considerably less design skills did that button.

The other reason I'm sure this is fake is that companies are extraordinarily protective of their branding and logos. Bigger companies frequently produce and distribute design bibles to their marketing people. This bible defines right down to the very last pixel, how any logo or branding element is allowed to be used in any medium, the colors, the background, the surrounding elements, etc. This is done to present and maintain a consistent look and it's a very good idea.

There is no way in hell Apple is going to present one of their most famous branding elements (the Mac Finder face) cropped and anamorphically squeezed like that. It's awful. It's laughable. That's not a button designed by Apple.

Now, before you counter with the possibility that this button design is a prototype, please consider that the rest of the image looks like a polished marketing image--clean and clear and good color and very attractive. If it were real, it would stand to reason that it would be a final marketing image which would mean that no traces of early work or prototype button designs would be a part of it.

So, it's fake. Sorry. Whoever this friend is who claims to work for Apple and has passed this along to you is pulling a fast one on you.

Well I can understand your comment, but i hope you are wrong. It is a pretty good friend, and I just get excited about these things. I have only been waiting for MMS to be added before i buy my iPhone and all the rest is a bonus to me. Even if it is fake, I think you can agree that the features I stated are very likely to be added anyway!

JeffDM
Jul 27, 2007, 03:08 PM
while an exageration he does have a point. $500-$600 is WELL outside the spending range for most average people. If this was a laptop sure. Buts its a damn phone at the end of the day.

Hopefully the current price is just a starting point before being lowered later. The original iPod started out pretty high too but it dropped over time as well as adding functionality. I think the 60GB photo started out at $600 but the same model eventually settled down to $400 before getting replaced. I don't think the iPhone will go down that quickly, but this is an example.

something isn't jiving here. could AAPL be lowballing this? maybe they booked advertising or some R&D against the iphone profits? $18/phone just doesn't seem to match up to anything.

Maybe part of the revenue is prorated because it's only two days out of the entire quarter?



1) Apple expects an upside in iPhone sales, and needs extensive cash on hand to buy bulk (and therefore more affordable) purchases of flash memory. While that wouldn't account for 11 billion obviously, that would be a *reason* for having cash on hand--for future purchases.

They make quite a bit of money on the money they have too. It's not just cash that is sitting around, it is invested.


On the call, they stated "It took us two years to sell a million iPods, we're hoping to sell a million iPhones in one quarter."

So, TWO years to sell a million iPods versus 1 year to sell a million Zunes. Fear not for I am not about to tell you how much better the Zune is. Read on... :)


One might argue that the difference in market size is a major factor. The entire market for digital file players at the time was very small. That might make iPhone look bad because the "pond" was considerably larger to start with.


I love Apple, but lets not crow over statistics that are clearly not comparable.

Agreed. Microsoft was only selling one model in one country. I don't know why they haven't expanded their selling region or added models yet. Taking 10% of the US HDD player market at one stab isn't bad, but I think maybe that shows just how small of the HDD player market really was.

JeffDM
Jul 27, 2007, 03:21 PM
Well I can understand your comment, but i hope you are wrong. It is a pretty good friend, and I just get excited about these things. I have only been waiting for MMS to be added before i buy my iPhone and all the rest is a bonus to me. Even if it is fake, I think you can agree that the features I stated are very likely to be added anyway!

I do agree with the other person on the fakeness. The picture doesn't work, I agree that the margins are too tight. I suppose there is a chance that it could be real, but I think that means that the image is just a placeholder.

I'm not sure if there is enough room on the device to make a Finder worthwhile, the apps don't need it. So far, each app seems to manage all the files relevant to itself, somewhat like the way Palm does it, or at least it looks that way.

Black Belt
Jul 27, 2007, 05:20 PM
I would think that a large percentage of new Apple customers who have entered via the iPhone will be getting a Mac, if not a few Macs. How could you resist if you love the iPhone?

Well, it's easy to "resist". I love the iPod, always have, and that never convinced me to go back to Mac. I have been happy with the current direction of Mac OS, it's better than when I dumped the Mac, and I would consider running it in a virtual machine, but buying a Mac? Nah. I make better machines with better components that look better for less money that frankly work better for the myriad of projects I do. Why would I give that up?

megfilmworks
Jul 27, 2007, 06:42 PM
Well, it's easy to "resist". I love the iPod, always have, and that never convinced me to go back to Mac. I have been happy with the current direction of Mac OS, it's better than when I dumped the Mac, and I would consider running it in a virtual machine, but buying a Mac? Nah. I make better machines with better components that look better for less money that frankly work better for the myriad of projects I do. Why would I give that up?I understand, but you are not the target demo. The target is people who want the best, ready to go, not build their own. You can always build a better mousetrap, but you have to have a market if you want to make any profit.

Fairly
Jul 30, 2007, 06:14 PM
But the media are trying to make this look like bad sales statistics.

Fairly
Jul 31, 2007, 01:41 AM
That's 2.5 per second only if the stores never closed and no one went to sleep.

ABM
Jul 31, 2007, 01:45 AM
But the media are trying to make this look like bad sales statistics.

Just because of the big hype after June 29th! :-D

hardmanb
Aug 3, 2007, 02:24 AM
"Originally Posted by SiliconAddict
while an exageration he does have a point. $500-$600 is WELL outside the spending range for most average people. If this was a laptop sure. Buts its a damn phone at the end of the day."

If you think $500-600 is outside the spending range of most people, you may be right...but obviously, you probably don't have a teenage daughter or a college student, or a young professional child. Who do you think bought 100 MILLION iPods?

"It's a damn phone at the end of the day"....WTF?
It's the most usable, pleasurable, mobile device with the first "real" browser, Wifi, PDA features, iPod, video device...according to reviews and surveys of those who have them. The "sideloading" of iTunes, means that you no longer have to pay a carrier for music, ringtones, video and other downloads.

Don't forget that the iPhone is a computer and is upgradable by software. Unlike MS with their "promised" upgrades and service packs, Apple constantly improves their operating system with security fixes and added features. Over the next year there will be a steady stream of improvements, added features and third pary offering of software to erase "missing capabilities".

Hint: It's not just "a damn phone at the end of the day".

JeffDM
Aug 3, 2007, 06:54 AM
If you think $500-600 is outside the spending range of most people, you may be right...but obviously, you probably don't have a teenage daughter or a college student, or a young professional child. Who do you think bought 100 MILLION iPods?

Those two things aren't necessarily connected. The original iPod was reasonably popular, but iPods didn't really take off until Apple made their mini/nano class, and Apple's CEO admitted that the mini & nano were Apple's best selling products, not the bigger, pricier models.

I also don't think it's a matter of that much money being outside the spending range of most people, it can still be judged to be too expensive to be worth spending it on the device rather than on some other luxury that's not a phone. Much of your argument seems to assume that masses of people want PDA and other capabilities, and that hasn't been borne out yet.

hardmanb
Aug 22, 2007, 12:35 AM
Mac sales seem to be the real hero here, looking at the data. I strongly disagree with the notion that the iPhone (and diversion of some of the OS X team to work on iPhone) is somehow going to be beneficial to the mac. To me, doing two things at once doesn't mean they both end up better than one at a time.

Another thing that Apple is doing "at the same time" is the Apple Stores, a major success story in their own right. The Apple stores produce the highest per-square-foot revenue (and profit) of any electronics story chain in history.

If you haven't visited an Apple store, you should. Just stand back and watch the kids, the young and the old come in to look at the iPhone, and play with the entire line on display. Look at the interest, surprise and wonder in their eyes and listen to their questions and comments. The iPhone store traffic is successfully exposing many to actual presence and hands-on tinkering with Apple products. Reports show that some come to see the iPhone, and leave with an iPod, a laptop, an iMac...or the intention to buy Apple on their next purchase.

Survey after survey of prospects and purchasers of Apple products have shown that iPods, iPhones and the Apple stores have resulted in increased purchases of Macs and intentions to purchase Macs in the future. There is a definite and industry-envied crossover or "halo" effect.

And not only is Apple still steadily opening Apple stores, but in time for Christmas, they are opening over a thousand stores-within-stores at BestBuy across the nation. Game on.