iPhone 5s and iPhone 5c Sales Top Nine Million in Launch Weekend

[BaldiMac]

Here you're mixing up two different comments. The comment about unsold inventory is separate from the "lie" section. I'd have made it a separate post, if I had time (and we didn't have automerge here).

I don't think I was. I wasn't referring to your comments on unsold inventory, I was referring to the original accusations by AidenShaw. Sorry, I should have edited down your post that I quoted.

I agree that Apple tells more info about sales each quarter. Of course, it'd be even better if they broke that down by model, but that would give their competitors too much valuable info. I'm sure that Samsung feels the same way, and that's why they don't give any details, except for the occasional public milestone.

With the distinction that Samsung's public milestones have significantly less accountability than the ones that Apple releases. And I'll bring up their S3 preorder claim again from last year that was nothing but deliberate misinformation.

 

[kdarling]

IAnd I'll bring up their S3 preorder claim again from last year that was nothing but deliberate misinformation.

Haven't heard of that. You mean when a newspaper reported an unnamed Samsung official as saying they had 9 million preorders from 100 carriers? That's a 90K average per carrier, so it seems quite plausible.

What was the supposed misinformation?

Warning: if you come back and tell me that some lazy blogs misrepeated it as 9 million personal pre-orders, you'll owe me a beer

 

[BaldiMac]

Haven't heard of that. You mean when a newspaper reported an unnamed Samsung official as saying they had 9 million preorders from 100 carriers? That's a 90K average per carrier, so it seems quite plausible.

Yep.

What was the supposed misinformation?

That they purposely leaked non-customary preorder numbers in order to generate favorable press from the predictable misinterpretation of those numbers.

Warning: if you come back and tell me that some lazy blogs misrepeated it as 9 million personal pre-orders, you'll owe me a beer

I'd argue that was Samsung's intention.

 

[tplee]

Why is everyone such a drone?

I'm sorry I don't get it. I am a loyal Apple fan, have iMacs, iPhones, iPads etc.
I don't get why people continue to buy these small upgrades of iPhones. Its insulting to you the consumer and it just reinforces Apples view that they can just put out small upgrades like this and extract every single dollar they can out of the iPhone. You vote with your dollar, and with this number of sales Apples has no reason to innovate or make the changes that a growing number of people keep asking for. Have some self control people, you don't need to buy every version of iPhones that is released. STOP BEING APPLE DRONES!

 

[Tyler23]

I'm sorry I don't get it. I am a loyal Apple fan, have iMacs, iPhones, iPads etc.
I don't get why people continue to buy these small upgrades of iPhones. Its insulting to you the consumer and it just reinforces Apples view that they can just put out small upgrades like this and extract every single dollar they can out of the iPhone. You vote with your dollar, and with this number of sales Apples has no reason to innovate or make the changes that a growing number of people keep asking for. Have some self control people, you don't need to buy every version of iPhones that is released. STOP BEING APPLE DRONES!

Some people had the 4S, and were eligible for an upgrade. Why wait another year, when the 5s is a significant upgrade over their 4S?

You seem to be thinking Apple is targeting people to update every year - most people don't do that - most users (except for people that must have the newest and have cash to burn) buy at most every two years. For these people, phones that are two years newer than their current phones are a significant upgrade, therefore it makes perfect sense.

 

[BaldiMac]

I'm sorry I don't get it. I am a loyal Apple fan, have iMacs, iPhones, iPads etc.
I don't get why people continue to buy these small upgrades of iPhones. Its insulting to you the consumer and it just reinforces Apples view that they can just put out small upgrades like this and extract every single dollar they can out of the iPhone. You vote with your dollar, and with this number of sales Apples has no reason to innovate or make the changes that a growing number of people keep asking for. Have some self control people, you don't need to buy every version of iPhones that is released. STOP BEING APPLE DRONES!

Did you ever consider that some people that are buying the iPhone 5S don't have an iPhone 5? Or that Apple is aware that most people don't upgrade their smartphone every year?

 

[jclardy]

And the "budget" device sells 3 times less ?

Of course. The 5c is not about launch weekend sales, it is about the next year. 5c is for those people with a 4S that are getting their upgrade in the next few months and don't want to lay out an extra $100 for the 5s, but still want something "new".

If you look at the iPhone 5 launch I doubt the $100 price drop on the 4S caused any bump in sales of that device.

 

[hyhybt]

Can someone please explain why people so excited over the same phone again?
The 5c is basically 5 with plastic.
And 5s is fast, and with finger print.
That's it.
Why people buy it like there is no tomorrow?
Am I missing something?

By that logic, I assume you are still using the iPhone 1. After all, what's changed since then? Updated OS now and then, better camera here, more storage there, sharper/larger display, faster speed and/or a redesigned case some years...

They can't totally reinvent the phone every year, nor would it be desirable to do so. But there are always improvements, which keeps them competitive for new buyers and encourages those with older (as in, NOT what was the current model a week ago) or worn-out phones to upgrade.

 

[FrozenDarkness]

I LOVE how this topic devolved into attacking Apple for PR and Marketing. "OH APPLE has LIED BY OMMISSION BEFORE!" this is certainly new and exciting to me I mean Apple practically invented marketing speak. Before Apple, everybody told you exactly what was going on.

There is no question regarding this number however. Apple didn't just release a press release, they made a submission into the SEC. If you want to dig deeper into why this is misleading, just understand what it means to claim revenue. To Apple, they're able to claim revenue on all 9 million of those devices. We have no proof that suppliers overstock in the beginning, no reseller PURPOSEFULLY wants to keep a lot more than what they expect to sell on hand because that's lost money for them. Even then, it'll affect future sales since they have too much on hand now.

This brings me to my second point. Apple not only sold 9 million phones, they also reaffirmed their guidance towards the high end of their original range. Apple has always been good at giving out guidance. People might think that Apple could've theoretically gave a lower guidance just to have one of this PR moments but it's actually incredibly risky maneuver that only an android fan could think up.

OH and why is SEC significant? I don't know they could get sued by it. And why does reaffirming the high end of their range significant and 9 million number significant? Apple's quarter end is 9/28, that gives them practically 5 more days to sell products. Can apple sell more than those 9 million iphones? Will Apple come out with higher earnings? I mean we'll know soon enough. lying now is literally the worst move.

 

[Dmunjal]

Did you ever consider that some people that are buying the iPhone 5S don't have an iPhone 5? Or that Apple is aware that most people don't upgrade their smartphone every year?

Judging by the number of iPhone 5 listings I've seen on CL and Ebay, I'd say many are dumping their 5 to get the latest and greatest.

I do agree with the point but we're not really talking about a lot of money to get the latest every year. Women spend way more on shoes, purses, etc to stay with the latest trends. So, what's the big deal?

 

[BaldiMac]

Judging by the number of iPhone 5 listings I've seen on CL and Ebay, I'd say many are dumping their 5 to get the latest and greatest.

By "many", do you mean a few hundred? A few thousand?

I do agree with the point but we're not really talking about a lot of money to get the latest every year. Women spend way more on shoes, purses, etc to stay with the latest trends. So, what's the big deal?

I didn't say there was a big deal.

 

[Rogifan]

He's right in a way, but didn't explain it subtly enough.

You could say that Apple lies by omission. Apple always tells bits of truth, just not the whole truth. Nor do they correct falsely favorable conclusions. This is a result of their adopting Steve Jobs' style of speaking.

For minor example, remember Jobs' picture of other smartphones when he debuted the iPhone. He made sure that he only showed smartphone with keyboards, not the touch models. It was a lie by omission.

A bigger example was the info slides shown during the AntennaGate explanation. Each one was carefully cherry-picked to look good, even though if you actually paid attention, they were obviously leaving out some critical info. Apple rehearses these things very carefully, so that each word is true, but the listener fills in the gaps with their own (often mistaken) conclusions.



There's always tons of unsold iPhones. At the last quarterly call, Apple said that there were 11 million iPhones in retailer channel inventory.



Resellers often overbuy at first. That's what happened to Samsung with tablets that one quarter, which led to the oft-misused "shipped vs sold" meme that plagues us to this day. Of course, they were eventually sold and quarterly sales climbed after that.

As I've pointed out many times, the same thing happens pretty often with Apple as well. Sales will be unexpectedly down a quarter, because too many were bought by retailers in the previous quarter.

Fact is the only one who knows how much of the 9M sales is channel inventory is Apple. And we have no reason to believe their definition of sales has changed from this year to last. Gene Munster over predicted last year and under predicted this year. But instead of admitting he was wrong, he made up some channel inventory number so when you subtract it from the 9M you get closer to his estimated 5-6M sales. If people want to believe that there are millions of 5Cs collecting dust on some warehouse shelf because it fits their narrative that the 5C is a dud they can do that. But it's essentially meaningless and not based in fact.

 

[cube]

Fact is the only one who knows how much of the 9M sales is channel inventory is Apple. And we have no reason to believe their definition of sales has changed from this year to last. Gene Munster over predicted last year and under predicted this year. But instead of admitting he was wrong, he made up some channel inventory number so when you subtract it from the 9M you get closer to his estimated 5-6M sales. If people want to believe that there are millions of 5Cs collecting dust on some warehouse shelf because it fits their narrative that the 5C is a dud they can do that. But it's essentially meaningless and not based in fact.

I suggest that you read the reports trickling from Australia, for example.

 

[Rogifan]

I LOVE how this topic devolved into attacking Apple for PR and Marketing. "OH APPLE has LIED BY OMMISSION BEFORE!" this is certainly new and exciting to me I mean Apple practically invented marketing speak. Before Apple, everybody told you exactly what was going on.

There is no question regarding this number however. Apple didn't just release a press release, they made a submission into the SEC. If you want to dig deeper into why this is misleading, just understand what it means to claim revenue. To Apple, they're able to claim revenue on all 9 million of those devices. We have no proof that suppliers overstock in the beginning, no reseller PURPOSEFULLY wants to keep a lot more than what they expect to sell on hand because that's lost money for them. Even then, it'll affect future sales since they have too much on hand now.

This brings me to my second point. Apple not only sold 9 million phones, they also reaffirmed their guidance towards the high end of their original range. Apple has always been good at giving out guidance. People might think that Apple could've theoretically gave a lower guidance just to have one of this PR moments but it's actually incredibly risky maneuver that only an android fan could think up.

OH and why is SEC significant? I don't know they could get sued by it. And why does reaffirming the high end of their range significant and 9 million number significant? Apple's quarter end is 9/28, that gives them practically 5 more days to sell products. Can apple sell more than those 9 million iphones? Will Apple come out with higher earnings? I mean we'll know soon enough. lying now is literally the worst move.

Exactly. Apple would not have submitted a material change filing with the SEC if that 9 million wasn't real.

 

[kdarling]

Exactly. Apple would not have submitted a material change filing with the SEC if that 9 million wasn't real.

Nobody said the 9 million wasn't real.

Fact is the only one who knows how much of the 9M sales is channel inventory is Apple. And we have no reason to believe their definition of sales has changed from this year to last.

Nobody said Apple's definition of sales has changed, either.

It's the same as always: besides what Apple directly sold to end uers in its own stores, it includes millions of units either already arrived at, or in the process of being shipped to, carriers and other retailers.

The only difference from normal, is that some analysts think there was a good amount of iPhone 5C shipments that haven't sold through to end users yet.

 

[FrozenDarkness]

Nobody said the 9 million wasn't real.



Nobody said Apple's definition of sales has changed, either.

It's the same as always: besides what Apple directly sold to end uers in its own stores, it includes millions of units either already arrived at, or in the process of being shipped to, carriers and other retailers.

The only difference from normal, is that some analysts think there was a good amount of iPhone 5C shipments that haven't sold through to end users yet.

Well, I think accounting rules will dictate that the store actually has to have received the item before you can claim revenue.

And also they reaffirmed to the higher end of their initial estimates which signals to most people that apple has outdone their own internal projections. enough that 8-9 days of this sale has rocketed them towards the higher end of an entire quarter's revenue projection.

again we'll see in their next quarter's projections to see if this channel inventory is biting them in the butt.

 

[applefan10466]

Why is it so hard to accept apple is the most successful company on earth? Always get these "but..."posts trying to make their success seem unimportant.

 

[kdarling]

Well, I think accounting rules will dictate that the store actually has to have received the item before you can claim revenue.

It's a long thread, so you obviously missed the oft-repeated Apple SEC 10-K filing, which states:

“(Apple) recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable. Product is considered delivered to the customer once it has been shipped and title and risk of loss have been transferred. For most of (Apple)’s product sales, these criteria are met at the time the product is shipped."

This happens so much, it should probably be a sticky

Btw, Samsung does wait until it arrives before claiming revenue. Blackberry goes even further and states that they wait until they're fairly sure that the item will not be returned. Apple and Samsung don't do that. They account for returns separately.

 

[FrozenDarkness]

It's a long thread, so you obviously missed the oft-repeated Apple SEC 10-K filing, which states:



This happens so much, it should probably be a sticky

Btw, Samsung does wait until it arrives before claiming revenue. Blackberry went even further and waited until they were sure that the item would not be returned. Apple and Samsung don't do that. They account for returns separately.

that's crazy. i wonder if it's becuase they ship with insurance so the "risk" is transferred to FedEx

 

[kdarling]

that's crazy. i wonder if it's becuase they ship with insurance so the "risk" is transferred to FedEx

Maybe the retailer pays for the shipping, because it's already theirs at that time.

 

[AidenShaw]

that's crazy. i wonder if it's becuase they ship with insurance so the "risk" is transferred to FedEx

Insurance is the responsibility of the recipient.

Since most medium and large companies self-insure, that's appropriate.
___________

It's a matter of scale, and the simple fact that the insurance companies want to have a profit margin. That means that they'll set their premiums higher than the expected losses.

Imagine that I'm shipping you a phone worth $1000 (round numbers for simplicity). In our contract, it states that either I guarantee delivery or you pay for insurance agains loss in transit.

If the insurance company's actuarial tables predict that 0.1% of shipments will be lost, that means that $1 insurance will cover the actual risk of loss on a $1000 item.

Because they want to make a profit, and cover their overheads, they'll charge more than the expected loss - say $3.

If I as the shipper am assuming the risk, I'll pay the $3 and accept a guaranteed profit of $997. If our contract says that you as the buyer assume the risk, you'll probably also pay the insurance - better to pay $1003 for an item than to pay $1000 and get nothing.

Basic point - the insurance rates are set to make money for the insurance companies.
___________

Now, let's change the roles that we're playing. I'm Apple, and you're Verizon.

I'm going to ship you 1,000,000 Iphones for $1B dollars. The insurance would be $3M, and the expected loss is $1M.

We both have billions in cash - so why would we give $2M to an insurance company?

The more transactions and the longer the time, the less sense insurance makes.

If you send one 777 with 250K phones on it and it crashes and burns - that's a hit. If you send hundreds of 777s over many years and you lose one - it's cheaper to simply eat the loss for the one that went down vs. insuring the N-1 that landed safely.
_________________

This is why larger companies don't insure most things.

I frequently travel on business, and our contract with Avis rental cars automatically declines all the Avis insurance. If I wreck the car (only happened once, not my fault), the company will pay Avis for the damage.

It's cheaper for the company to cover the occasional accident than to buy insurance for every rental.

Insurance exists to make money for the insurance companies....

 

[CKA]

By comparison, Samsung shipped 10 million Galaxy S4 phones in their first 28 days of availability. But of course, the iPhone is stale and just a rehash of last years model ya know....

Samung use 'sell-in' figure, Apple use 'sell-out'. I think shipped to a retailer or AT&T (Samsung) is quite different than shipped to user. (Apple)

----------

It's a long thread, so you obviously missed the oft-repeated Apple SEC 10-K filing, which states:



This happens so much, it should probably be a sticky

Btw, Samsung does wait until it arrives before claiming revenue. Blackberry goes even further and states that they wait until they're fairly sure that the item will not be returned. Apple and Samsung don't do that. They account for returns separately.

I read that Samsung count in revenue when they shipped to product to 'retailers' or carriers. They just assume those retailers or carrier will have the perfect just-in-time stocking and all stocks will be transferred to user hand immediately. Apple on the other hand, will only count in profit when the devices shipped to user or being used by user.

 

[The Game 161]

So much for "Apple is Doomed" or "Its the same phone as last year"


Go Apple!

well it is and to be honest this is no surprise as apple knows their fans will buy anything to be up to date as foolish as it is.

 

[kdarling]

Samung use 'sell-in' figure, Apple use 'sell-out'.

Apple also uses sell-in for carriers and retailers, who are the overwhelming majority (~80%) of their normal sales.

(You must've missed my response to you yesterday morning here.)

 

[iKaushal]

Would love to see this as the best selling phone ever