Sales

Two Reasons Apple Sold 9 Million iPhones This Weekend


A customer looks at an Apple iPhone 5c device during the launch at the company's new store in Palo Alto, California, on Sept. 20

Photograph by David Paul Morris/Bloomberg

A customer looks at an Apple iPhone 5c device during the launch at the company's new store in Palo Alto, California, on Sept. 20

Thanks, China.

Apple’s iPhone numbers are in from its opening weekend (and really, why not talk about this like a movie?) and they are boffo: 9 million units sold. To put that into context, last year’s first-weekend sales of the iPhone 5 were 5 million, so an increase of 80 percent is pretty awesome.

Last year is not like this year, for two important reasons. For starters, there were not one, but two iPhones newly on sale this weekend: the top-of-the-line iPhone 5S and the premium-economy iPhone 5C. And while it seems that offering two models instead of just one did juice sales, it did so in an unexpected way: It appears to have made the more expensive model more attractive.

Apple doesn’t break out which model sells how much, but analysts and supply-chain watchers are saying the 5S won the weekend far and away. Indeed, the gold model is sold out, with deliveries not expected until October. “We appreciate everyone’s patience and are working hard to build enough new iPhones for everyone,” said Apple Chief Executive Tim Cook in a press release.

Perhaps some psychology and economic principles are at play here. If you have a new phone, the iPhone 5C, priced within $100 of the 5S, how many people will justify the extra $100 to get “the good one?” Maybe you can attract customers with the lower-priced model, and once they’re on the site, or in the store, for “only” an extra hundred bucks (an admittedly relative term, given what it takes around the world to earn an extra $100), they can get one that doesn’t say “I got the cheap one.” In the past, you could’ve gotten the previous generation, which didn’t say “I got the less-expensive one” so much as “I haven’t upgraded.” Now it’s clearer where you stand in the iPhone pecking order.

Furthermore, this clearer delineation of the iPhone line grants an almost Veblen-good status onto the iPhone 5S. Defined as demand in proportion to its price (we want it because it’s more expensive), the 5S bespeaks prosperity (as many Apple goods have) now more than ever. No wonder they made a gold one.

But the other, much more important factor in the iPhone’s recent sales success is that this year’s launch included more countries than last year’s. Specifically: China. In the past, China got the iPhone three months after it was made available in the U.S. and other markets. This was the first time the launch was simultaneous there and here. The lines were fulsome at stores in China, with similar reports of people gravitating toward the 5S, and the gold model in particular. Having hundreds of millions of potential new customers on Day 1 certainly helped push those overall sales figures way up.

Grobart is a senior writer for Bloomberg Businessweek and the managing editor of Bloomberg Digital Video. Follow him on Twitter @samgrobart.

Steve Ballmer, Power Forward
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