Apple Sells One Millionth iPhone

[CalBoy]

Well Razr had bad couple of months at the beginning (because of the price) but then sky rocketted and sold 50 million in first two years (on sale middle 2004, 50 million in July 2006). That's a bit over 2 million per month.

I think by that point, the RAZR was being heavily discounted (down to $150 or something in that neighborhood no?). In addition, the RAZR didn't require a data plan. The iPhone has to convince you that it's good enough to warrant a data plan and its price tag. In the face of that, I'd say it's doing pretty well.

 

[milo]

Well Razr had bad couple of months at the beginning (because of the price) but then sky rocketted and sold 50 million in first two years (on sale middle 2004, 50 million in July 2006). That's a bit over 2 million per month.

Did it sell the first million this fast? Based on what you just said, I doubt it.

Items like this don't sell the same amount every month, they go up if they are successful. Just look at the ipod, and well, the Razr. Prices go down, capacities and features go up, in this case new markets will be coming online.

I don't know if they'll hit 50 million in two years, but 10 million by the end of 2008 seems easy, I wouldn't even be surprised if they can pull it off by mid 2008.

 

[gugy]

I want a 3G iPhone with 16gig storage. I hope it comes very soon, no later than MWSF.

 

[overcast]

I want a 3G iPhone with 16gig storage. I hope it comes very soon, no later than MWSF.

Don't hold your breath.

 

[gugy]

why not?

16 gig flash is here on the iPod Touch and in Europe the iPhone will be for sure 3G, so I don't think is too much to ask.

 

[BKKbill]

Excuse me? $100 million in credits to the Apple Store. This brings AT&T costumers into the Apple Store. My guess is in 6 months you'll see it many of those who used the $100 credits were not existing costumers and a large portion of the credit won't be claimed.

Those who do buy stuff will buy high margin products so Apple will lose little.

If this works it'll be a steal. Costumer acquisition cost for premium electronics is usually far higher.

I think your right on the assumption Apple will lose very little and who said the customer is going to just spend the credit it just might be a down payment for an iMac or Mac book. So give $100 and make much more. Apple has a market Cap of 117.43 Billion this is chump change.

 

[ChrisA]

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.

 

[irun5k]

Hopefully, they can now concentrate on updating the iPhone to modern specs.

What, so then you'll buy one to go along with the 400 MHZ iMac that you're bragging about in your sig? You're right, it would be an insult to plug an iPhone into your mac. But not because of the iPhone.

okay, okay, just kidding already! I had to make the joke. But really, you had to be the one joking.... "modern specs?" Where do you do your phone shopping? Japan?

 

[JGowan]

Congrats, Apple! Huge number and very quick, too!

I bought my first iPod 24 hours after they began going on sale back on November 12, 2001. I wonder what "number" I was? Certainly one of the first thousand or so, maybe even lower.

 

[shawnce]

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]

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?

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).

 

[DMann]

Not necessarily

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

Considering that the $100 is in the form of Apple credit, the profit made on resale of Apple products reduces the hit significantly.

 

[plumbingandtech]

Considering that the $100 is in the form of Apple credit, the profit made on resale of Apple products reduces the hit significantly.

To say nothing of the large percentage of people that will not even take advantage of this "rebate" like so many other rebates.

 

[chicagostars]

$100 credit good for all involved

As a stockholder, I'm happy ... that $100 credit will bring a ton of people back to the store. Actual cost of goods on that $100 credit is a drop in the bucket!
Most people will spend more than $100.

Well put. And for any doubters, it is well understood among retailers that store credits, gift cards, etc. generally result in purchases above the credit amount. While it doesn't "close" what many are calling a $100 million gap, the $100 credit does go a long way to closing it though a variety of methods.

 

[iomar]

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?

Well, you are right about that, but right now we are also stuck only with the AT&T Service.

 

[cameronjpu]

Its not known when a 2G iPhone will be out, but you can guess that we'll get at least 3 months notice of a new iPhone coming out, due to the fact that Apple needs to get FCC approval of any phone it releases, and that approval application is made public so will be all over the rumors sites as soon as Apple make the application.

As I remember it, last time Apple requested that it not be made public in the interests of trade secrecy. So you may not know in advance.

 

[ts1973]

Apple cut the price to drive the sales. They want to meet te bold statement of 10 mil phones in '08.

So just a thought : maybe they cut the price because the phone will be late in Europe. I have to seen hard evidence still for a 2007 launch in any European country. And after Germany, UK and France, when will the others follow ? Probably too late to sell 10 mil units in 2008

 

[AHDuke99]

Well, you are right about that, but right now we are also stuck only with the AT&T Service.

what do we do about the service? Verizon refused apple and tmobile is too small. Should apple have chosen sprint? They gave a good data network, but customer service is awful and i hear their voice is spotty. I am tired of seei g complaints. Only choice apple had was them, unless they made both cdma and gsm and just sold it unlocked. Even then verizon wouldve refused to allow it intheir network without their ckunky gui.

 

[cameronjpu]

Apple really isn't out a 100 million, more like 20 million cause it didn't cost 600 dollars to make the phone.

Lol... so if you work a long night (5 hours) and get paid double time, $60 per hour instead of your normal $30, and you donate your paycheck at the end of the night ($300) - did you just give away $150 or $300?

 

[JGowan]

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.

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.

 

[AHDuke99]

and tge euro phone isnt going to be 3g from what ive read. That tmobile ad in germany is an apparent fake. Idoubt apple roles out a 3g there before the us gets one. And i bet euro users for the most part care just as much about 3g as americans. There is a small minority and thats it.

 

[hayesk]

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.

That reminds me of the restaurant trick. When one customer in a group is not satisfied, the waitor will offer that person free dessert as compensation (or a free meal next time). They know if the one person gets free dessert, all of the other diners will buy dessert, or the person will bring other people back for their "free" meal.

 

[Gilfanon]

For the record, from Nokia's Q1 results announcement:

Nokia shipped close to eight million Nokia Nseries and more than one million Nokia Eseries devices during the first quarter 2007.

The N series consists of 8 models, the E series of 7 models. Those 2 series are probably the closest matches to the iPhone I'd guess (forming the high-spec, high-cost end of Nokia's range). That's 9 million units shipped over 3 months for 15 models. That's also models shipped- not sure how that corresponds to actual direct sales to customers vs models sitting in stock at resellers. And it's also global units (of which the US is approximately 5% of Nokia's global sales), vs. purely US sales for the iPhone. Obviously there's an argument for relative product maturity and the buzz that's driven up iPhone sales, but all told those comparative figures look pretty good to me.

Plus, given the fashion-conscious nature of the phone market in the UK, I expect the iPhone's share of the high-end mobile market to go pretty stratospheric over here- I'd say the future looks pretty good for the iPhone.

 

[jhsfosho]

1,000,000 in 72 days? I'm impressed. That also means that theres about 1,000,000 people enjoying their iPhones more than my (nonexistant) iphone.

Congrats on the sales, Apple!

 

[chr1s60]

I knew Apple would sell more than a million by the end of the quarter. I would also guess that with the new price cut, Apple should sell a little over 2 million by the end of the year. This price cut has convinced a lot of people that were borderline to go out and buy an iPhone. I personally know two people that had been thinking about buying an iPhone that immediately bought them after the cut was announced. I am sure there are a lot of others like this that will boost Apple's sales.