Apple Sells One Millionth iPhone

[macduke]

Yesterday, just 74 days after its introduction on June 29, Apple sold the one millionth iPhone. “One million iPhones in 74 days—it took almost two years to achieve this milestone with iPod,” said Steve Jobs, Apple’s CEO. “We can’t wait to get this revolutionary product into the hands of even more customers this holiday season.” [Sep 10, 2007]

- apple.com

[Blue Velvet]

CUPERTINO, California—September 10, 2007—Apple® today announced it sold its one millionth iPhone™ yesterday, just 74 days after its introduction on June 29. iPhone combines three devices into one—a mobile phone, a widescreen iPod®, and the best mobile Internet device ever—all based on Apple’s revolutionary multi-touch interface and pioneering software that allows users to control iPhone with just a tap, flick or pinch of their fingers.

“One million iPhones in 74 days—it took almost two years to achieve this milestone with iPod,” said Steve Jobs, Apple’s CEO. “We can’t wait to get this revolutionary product into the hands of even more customers this holiday season.”

Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market this year with its revolutionary iPhone.

http://www.apple.com/pr/library/2007/09/10iphone.html

[Southernboy]

Great news, although somewhat naively I expected this in the first weekend
The 2 years to sell a million iPods stat adds an interesting perspective though.

[yoman]

So 250,000 in first two days and an additional 750,000 in the next 72?

[EvanLugh]

Bring it to the UK, we'll double it (and the price so it seems..)

[Schtumple]

Originally Posted by EvanLugh

Bring it to the UK, we'll double it (and the price so it seems..)

So true

£500 iPhone anyone?

If Apple muck up the pricing for the UK I can't be fussed buying one, I'll be happy with a iPod classic and my O2 Ice...

[sionharris]

Originally Posted by Schtumple

So true

£500 iPhone anyone?

If Apple muck up the pricing for the UK I can't be fussed buying one, I'll be happy with a iPod classic and my O2 Ice...

Looking at how iPods are priced over here, I would guess that the iPhone will be £250-300.

Pound for pound it is much cheaper in America - but only because the dollar is weak. In real terms, they pay roughly the same as us.

[ucfgrad93]

Originally Posted by yoman

So 250,000 in first two days and an additional 750,000 in the next 72?

Thats over 10,000 iPhones a day, after the initial weekend. I'd call that pretty impressive.

[EvanLugh]

*shrug*
http://digg.com/apple/Apple_sells_1_million_iPhones
Someone had to do it

[Project]

Originally Posted by ucfgrad93

Thats over 10,000 iPhones a day, after the initial weekend. I'd call that pretty impressive.

Id say for a phone that expensive, its more than impressive - its unprecedented.

[Laglorden]

Originally Posted by Project

Id say for a phone that expensive, its more than impressive - its unprecedented.

Maybe... but only because there are no other Phones that expensive...

With 1 billion phones sold and > 36,5% markket share Nokia should sells more than 1 million phones a day I think.

[ChrisA]

Originally Posted by yoman

So 250,000 in first two days and an additional 750,000 in the next 72?

I think this is why Apple lowered the price. They sold a lot the first week, fewer the next week and so on. the trend was moving the wrong way. No one lowers a price on a product that is selling faster than they can be made. You lower it due to slowing sales.

[shawnce]

Originally Posted by ChrisA

You lower it due to slowing sales.

...or to accelerate sales. The holiday quarter coming up is the one nail even if they don't get the margins they want. This will give the iPhone a strong start into the next year by getting more out in the environment (more in the environment equals more mind share, friend to friend marketing).

You assume (ignoring the initial spike) that sales have been trailing off but you have no data to support that assumption. If it followed the iPod trends at all then sales having been growing over time (so has production capacity) as more word of mouth and positive press have come around (iPhone is getting good reviews and has very high satisfaction ratings). The iPhone is tracking ahead Apple's public statements so that is another good sign (granted Apple is good at over delivering... likely because they under promise).

[milo]

Originally Posted by ChrisA

I think this is why Apple lowered the price. They sold a lot the first week, fewer the next week and so on. the trend was moving the wrong way.

Is there any evidence for that?

We all know that they sold a bunch the first few days of release. That's just pent up demand. Is there any reason to believe that sales in week 3 were lower than in week 2?

Originally Posted by ChrisA

No one lowers a price on a product that is selling faster than they can be made. You lower it due to slowing sales.

What about ipods? Sales have been going up constantly in the years since they have been released at the same time prices have gone down. Don't forget that new products have supply constraints. "Selling faster than they can be made" doesn't just take into account sales, it also means that prices can drop as manufacturing ramps up (and those costs drop, although it's probably too early for that).

[JGowan]

Originally Posted by ChrisA

I think this is why Apple lowered the price. They sold a lot the first week, fewer the next week and so on. the trend was moving the wrong way.

You source link, please, to back up this information.

Originally Posted by ChrisA

No one lowers a price on a product that is selling faster than they can be made. You lower it due to slowing sales.

What about the iPod Mini? While, no, Apple didn't lower the price on the best-selling iPod at the time, they stopped making it. No one else would do that. Any other company would've milked the Mini for as long as they could. Apple doesn't do the usual.

I think your expectations are way too high for any company actually by expecting them to "sell faster than they can be made". You might point to PS3, XBOX360 or Wii, but if there are any shortages there, I belive it was due to intentionally creating a demand for them by only producing a small amount. Video game players tend to get worked up any way. You tell them there's only a small amount, you're due to sell every one that you make, but then you're limiting your sales too.

But many companies choose to lower their prices when they've reached a certain place in the market so they can broaden their lead and base even faster. If you've been catching some of the tech buzz lately, you would've read that the iPhone outsold all other smartphones in July Reuters. The iPhone is very popular, but could it sell even faster? Yes. By lowering the price by $200. Steve Jobs made the decision to lower to make the product even more affordable so that Apple could sell even more of them this Holiday Shopping Season. Why don't people just take him at his word? Some people hate those who are doing well. On the street, they're called "Player Haters".

Did Apple lower the price of the $399 iPod by 33% after their first 72 days back in 2002? By your proposed pricing theory, Apple would've done just that. No, they stood by their price as if to say, "This price is justified and if you want it, you need to be prepared to pay for it". I'm sure sales tapered off shortly after Christmas. But Apple stood by its price of $399. The iPhone is now a reality because people began to slowly but surely see the value in the iPod. With each milestone reached, Apple continued to make the iPod more affordable while creating more value into each generation of iPod that it shipped.

Why not buy now? You might wonder "if the iPhone is 'so great', why isn't Apple selling more?" Fair enough question... Just as the people most excited about the iPod (and willing to spend the "high" price to get it) came and bought in the first week of sales, those most interested in the iPhone did the same. And then sales tapered off. That is to be expected. Why? (A) Interest is not as high to immediately buy; (B) More consideration to be given due to high cost; (C) Wait to see public reaction; (D) Wait to save $499-599 to purchase; (E) In the middle of another phone contract and doesn't want to pay early termination fee.

There's very few people who are knowledgeable about the iPhone that wouldn't want one if they were given one. As I mentioned in paragraph immediately above, there are a number of reasons why people haven't bought, some of which are out of Apple's control. At this point, Apple is doing two things to make the next wave of buyers take their credit card out of their wallets. They added value to the iPhone by new features (including the soon-to-be available Wi-Fi ITunes Music Store) and lowering the price by $200. The next wave hits this Christmas.

[sinisterdesign]

Originally Posted by ChrisA

I think this is why Apple lowered the price. They sold a lot the first week, fewer the next week and so on. the trend was moving the wrong way. No one lowers a price on a product that is selling faster than they can be made. You lower it due to slowing sales.

slowed from what, 6 months of pent up hype & lust? of course it slowed down from the first week, were you expecting people lined up around the block still?

lowering the price was a forgone conclusion, it's a tech gadget, that's what happens. albeit, it's a larger cut & it came about a month sooner than i was expecting, but i don't think it was a defensive move as much as an offensive one. drop it well before the holiday season hits & now it's on more people's wishlist.

i was at an Apple store friday night 30min before it closed & there were throngs of people there. i even talked one guy into buying an iphone (where's my cut, apple?).

[macduke]

Originally Posted by Southernboy

Great news, although somewhat naively I expected this in the first weekend
The 2 years to sell a million iPods stat adds an interesting perspective though.

hah, you mean that funny named 5gig, $400 behemoth with no touchwheel, only 6 lines of text display, no equalizer and no windows support (which is the majority of the population) surprises you that it took it so long to sell?

i would have thought it would reach this milestone earlier too, especially with all the hype and the established branding. guess that's why they dropped it to $399. wonder how many of those sales were in the last week?

[Southernboy]

Originally Posted by macduke

hah, you mean that funny named 5gig, $400 behemoth with no touchwheel, only 6 lines of text display, no equalizer and no windows support (which is the majority of the population) surprises you that it took it so long to sell?

When you put it like that......... yeah, fair comment

[dscottbuch]

Originally Posted by Southernboy

When you put it like that......... yeah, fair comment

Not really since, at the time, it was the smallest, most capable (including iTunes) device out there. It brought true functionality to the Mac community. Windows was the only thing missing at the time. [Braces for refutation by the feature mongers - no radio - no.... Please note they still don't have it and they are still the monster market leader]

[Le Big Mac]

Originally Posted by macduke

guess that's why they dropped it to $399. wonder how many of those sales were in the last week?

Put differently, that decision cost them essentially $100 million. As a shareholder, I'd be upset.

[pugnut]

With 14 billion in cash and future sales the 100 million is a pimple on their ass. Also factor is the writedown for tax purposes and the fact that it is a store credit and not cash back, more favorable tax and accounting treatment for apple.

Net of net it is good for customers and will propel this even further.


I purchased at 27 and 38 many years ago and have never looked back. Post adjusted splits I am up of 1200% on my original investment.

[wordmunger]

Originally Posted by Le Big Mac

Put differently, that decision cost them essentially $100 million. As a shareholder, I'd be upset.

I don't think it's that simple. They won some goodwill back from die-hard customers. These are people who are likely to spend a lot of money on Apple products in the future.

[mpuck972]

Originally Posted by wordmunger

I don't think it's that simple. They won some goodwill back from die-hard customers. These are people who are likely to spend a lot of money on Apple products in the future.

I will say that without the $100 I would not be contemplating a new iPod, so by doing that they will be getting me to spend some extra money for a classic this week.

[JGowan]

Originally Posted by Le Big Mac

Put differently, that decision cost them essentially $100 million. As a shareholder, I'd be upset.

Loved your "ESSENTIALLY" word there. You think it lets you say "$100 million" but also lets you off the hook if you're wrong. And you are.

Final tally will not be anywhere near $100M.
It's not a $100 bill that early adopters get back (but you know this because you said "essentially". It's a $100 credit. Anyone wishing to take advantage of this has to buy something at a brick & mortar store or online at apple.com. Not everyone will take advantage of the credit. Some won't know. Some won't care. Some will miss the deadline that will be in place (probably Dec 31, 2007). Some will have good intentions and forget. And Apple has probably alienated some and perhaps have lost their business for good.

Profit Margins of other Goods/Services
Whatever is bought isn't sold at the cost to make it so, while the $100 is being used to purchase something, it's going to partially pay for it too. Depending what is bought, maybe almost a wash really.

Credit used to buy big ticket/big profit margin itemsPerhaps the $100 is used toward another phone or iPod or computer. Money will be made on this sale regardless of the $100 credit.

Goodwill restored/Good press earned/Free publicity
No telling how much more "$399 iPhone" was told to the masses FOR FREE by giving the credit. This news reached mega-millions and the words "Apple dropped the iPhone $200/Apple gave a $100 credit" were on countless lips. Most iPhone users happy. Apple did what most companies wouldn't and garnered more goodwill and admiration and again, the FREE advertisement of the new price was the topic of millions of conversations, probably along with "Cool new lineup of iPods" and "The iPhone and iPod Touch will now do Wi-Fi iTunes downloads".

Apple MADE money, Jack.

[ibwb]

Originally Posted by Le Big Mac

Put differently, that decision cost them essentially $100 million. As a shareholder, I'd be upset.

With my credit, I'll be purchasing iWork '08. The CD and box will cost Apple about two dollars. Many others are likely to buy high-margin accessories like the Apple Bluetooth Headset. Your $100 million price tag is absurd.