Apple Sells One Millionth iPhone

[sinisterdesign]

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?).

 

[Detlev_73]

Eeww!

Make one for Verizon and I'm sold.

I dropped Verizon like a hot potato, as soon as I bought my iPhone. Verizon had their chance to accept the iPhone, but they spit in Apple's face. I was a Verizon customer and when I heard this, I went through the roof for their lack of vision. It's sucks to be a Verizon customer now. I gladly paid the $175 to break my contract. Long live the iPhone!!!

 

[s10]

I dropped Verizon like a hot potato, as soon as I bought my iPhone. Verizon had their chance to accept the iPhone, but they spit in Apple's face. I was a Verizon customer and when I heard this, I went through the roof for their lack of vision. It's sucks to be a Verizon customer now. I gladly paid the $175 to break my contract. Long live the iPhone!!!

Same for me!

 

[happydude]

well done

did you write in to verison to tell them why they lost a customer?

 

[JGowan]

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.

 

[Deanster]

That's a million phones in 74 days. At $600! With EDGE instead of 3G. In the US only. On a single (not well-loved) carrier. With a mandatory data plan. With zero rebates, discounts, coupons, discounted calling plans, etc. With only one high-end model.

And an untested, kinda buggy product that lacks all kinds of common capabilities like Exchange support, proper VPN support, and 3rd party software. And ringtones, for gods sakes!

So, if Apple can outsell both Palm and Blackberry's worldwide, all carriers, all models, heavily subsidized/discounted numbers with all those limitations, what will the future look like?

When iPhone has several models at more-reasonable price points. With 3G. Worldwide. Multiple carriers. And Rev. 2+ software....

The future's so bright, Steve Jobs gotta wear shades...

 

[TurboSC]

I'm happy for you Apple, now where's my damn $100 gift card...

<3 Apple has come a long way... Kinda sucks that it's more mainstream now, and all the computer tards think they're cool because they have an iPhone, but don't even know what an operating system is. Oh wells, posers will always be posers

 

[twoodcc]

lets hope it continues

exactly

this is great news....but they gotta keep selling them

 

[akac]

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.

Almost every Windows Mobile touch screen phone is that expensive, if not more. Cingular 8525 == $600 today.

 

[henjin]

Nice to be wrong

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.

Well I thought due to the glut of iPhones in NYC that Apple would be lucky to reach 750k but that just goes to show how looks can be deceiving.

One thing though apart from the 1 week boost in sales from the price cut; I wonder what will happen when savvy customers, if they exist, will hold off for the imminent release of a 3G iphone with 16gb?

Anyway I was wrong, big deal but it's nice to be wrong

 

[MacinDoc]

Wasn't Apple's goal to sell 10 million iPhones in 1 year? If so, it will fall far short at the current rate of sales (about 10000/day after the initial weekend). Obviously, Apple had to lower the price to try to reduce the huge shortfall. Even at WWDC, Jobs sounded like he didn't know how much Apple should charge for the iPhone, and he clearly guessed wrong. So, the initial high price was not an attempt to gouge early adopters, but instead reflected a very poor assessment of the market.

 

[matznentosh]

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.

I think that will be the case if/when Apple switches to 3G, it will have to get FCC approval which will be published months before the phone appears (won't that kill current sales).

But if it is some other type of improvement, to the computer portion of the iPhone (increased memory, video ichat etc.) I don't think FCC needs to give approval for that. Does it?

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

No, I think the current price drop means the European iPhone will be EDGE, 16 Gig and 8 Gig, revealed later this month, followed immediately by the same phones in US. That's my prediction. Am I the first with this idea? How much you want to bet this is what happens.

 

[JGowan]

Make one for Verizon and I'm sold.

Oh, they will --- IN FIVVVVVVEEEEEEE LLLOOOOOOOONNNNGGG YEARS!

I'll say this, by that time, it will be ONE KICK-ARSE PHONE!

 

[japasneezemonk]

Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU like Mac OS X; en) AppleWebKit/420+ (KHTML, like Gecko) Version/3.0 Mobile/1C28 Safari/419.3)

I just want my $100, I need to save some money on taxes when I buy my new MBP.

 

[dlastmango]

Wasn't Apple's goal to sell 10 million iPhones in 1 year? If so, it will fall far short at the current rate of sales (about 10000/day after the initial weekend). Obviously, Apple had to lower the price to try to reduce the huge shortfall. Even at WWDC, Jobs sounded like he didn't know how much Apple should charge for the iPhone, and he clearly guessed wrong. So, the initial high price was not an attempt to gouge early adopters, but instead reflected a very poor assessment of the market.

I think you got it right with that last line... they clearly had a large profit margin on the iphone at the $599 price. Jobs thought he would get a higher turnout for the iphone than it did.

 

[Bosunsfate]

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

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

Your math isn't quite right. You are saying $100 store credit for 1,000,000 purchases. That doesn't add up to $100 million.

First, many people will never use their credits.

Second, and very likely, people will actually spend more money in the store. Which means more business.

Now, I don't claim to know what Wall Street will value that rebate. Right now the stock is really too volatile to tell.

 

[gusapple]

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!

I just think that the number is smaller than they say. I got an iPhone for a few weeks and then I retuned it. That is why I think it is not that much. But good job Apple!

 

[megfilmworks]

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

Not if they sell more units as a result of the price drop. And don't forget the monthly income from ATT. As a shareholder I am very happy at the price drop. Much better in the long run for the bottom line. There are many more variables than simply multiplying the difference.

 

[aristobrat]

Wasn't Apple's goal to sell 10 million iPhones in 1 year?

FWIW, it's 10 million phones by the end of 2008, which is slightly under a year-and-a-half.

 

[CalBoy]

FWIW, it's 10 million phones by the end of 2008, which is slightly under a year-and-a-half.

Assuming that Apple is able to hit about 2.5 million by the end of this year, and another 3.5-4 million units next year (based on average daily sales being about 10,000), I don't think the iPhone is going to hit the mark. Then again, this is based on current sales rates. I'm sure by the time it's updated, and perhaps another small price drop ($50 off or so by next June?) daily sales might go as high as 20,000. If this happens, then the target will be met. I hope it does happen, because I'm banking on the price falling further (more competition from other companies, etc). If not, I guess I'll have to make the leap eventually and buy one with what little money I don't have

 

[aristobrat]

Are you factoring in international sales?

 

[CalBoy]

Are you factoring in international sales?

No, and the only reason is because that market has not been pinned down yet. Once we know just which markets are going to have it, and by when, a prediction with the international markets will be more viable. I know I heard something about the UK, but I don't know if it's slated for this November or not. If so, I'd add an additional 200,000 to my estimate for this year. Each market is different, so it would be hard to gauge where the iPhone would do really well, and where it would be a mediocre seller.

 

[Glenny2lappies]

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.

No. 3G is more important here - the Telcos make it that way as they paid so damn much for the licences. That plus the first company with 3G phone (called '3') cocked up the marketing, aiming at children to download videos rather than businesses who'll use the data (and have the money). Now 3G phones are far more common and the bandwidth is available quite cheaply.

For me, I really would like to see a 3G iPhone as the data will be so much better. Even if it's downloading the 'toons from iToons store (not that I've ever downloaded even one tune thus far...).

Is Steve making a rod for his own back by signing up the desperate Telcos rather than the capable ones? For example, will AT&T be able to use a 3G iPhone if/when it's released?

Wouldn't it be great if the iPhone's price was doubled but it was sold unlocked. I'd be more than happy to pay the premium and then select the Telco of my choice and not be tied in. Even pay-as-you-go would then be possible.

I'd lay bets on the fact that there's a huge number of people in the 'States who would love an iPhone but won't buy one purely because of AT&T. It'll definitely be like that in the UK for O2.

 

[shyataroo]

As a shareholder you would stop to consider that they will likely sell far more iPhones and secure more market share with competitive pricing. They are not going to "lose" $100M. I have no idea what Apple's R&D costs were for the iPhone, but at some point it's paid for. Component costs, as has been noted elsewhere, are decreasing due to increased utilization across other product lines. The net cost to manufacture the phone is decreasing. However, this is not so much the point as how much revenue can be can be realized over the product cycle life. The actual profit per unit is not as important.

acutally apple is "only" losing at most 50 million (remember it is STORE credit, meaning that they can only spend the money at apple...and the profit margin is 50% (give or take) that is assuming of course that they spend EXACTLY $100 at an apple store (which more often then not they will spend more, alot more) so they only lose the manufacturing cost of said items (or the wholesale price)

 

[CalBoy]

acutally apple is "only" losing at most 50 million (remember it is STORE credit, meaning that they can only spend the money at apple...and the profit margin is 50% (give or take) that is assuming of course that they spend EXACTLY $100 at an apple store (which more often then not they will spend more, alot more) so they only lose the manufacturing cost of said items (or the wholesale price)

The number is lower still because not all 1 million iPhone buyers will remember to use their credit.