Apple Sold 270,000 iPhones in First 30 Hours

[mambodancer]

Agreed

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]

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 ?

 

[Lancetx]

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]

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]

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]

Way to go !!!

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

 

[gr8tfly]

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]

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]

Yah for a company who's yearly profits topped 50 BILLION. Yah. Nowhere fast. 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]

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]

something fishy's going on here.

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]

270,000 iPhones...but...

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]

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]

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]

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]

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]

$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]

...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).



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]

I'd suggest you short the stock.

Couldn't have said it better myself. Put up or shut up.

 

[thomasfxlt]

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]

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]

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]

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]

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]

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.