iPhone: Analysts and Reality

Posted by: Stephen Wildstrom on July 25, 2007

Live by the hype, die by the hype. Apple (AAPL) stock took a beating yesterday when AT&T announced that it had activated “only” 146,000 iPhones during the two days in June the wonderphone was for sale. By any reasonable standard, even any unreasonable standard, that was a phenomenal launch, working out to an annual rate of nearly 27 million units. But investors’ expectations were so out of line with reality that they knocked $8.81 off the stock price. (A more meaningful test will come later today, when Apple reports earnings.)

The affair is reminiscent of the worst days of the dot-com bubble. Analysts, guided by little more than reckless enthusiasm, offer ridiculous predictions. In this case, Goldman Sachs took the prize with an estimate of 700,000 iPhone sales in the first weekend.

A word to the wise: Pay no attention to those folks behind the curtain. They know no more than you or I.

Reader Comments

DeVenci

July 25, 2007 11:45 AM

Amen,

Robert B

July 25, 2007 12:08 PM

You're right about the hype. Yet, I'd wait for Apple's report today to get more information on sales. AT&T's servers went down with the weekend's volume of activation requests. Many, with old numbers from various services had lengthy delays when attempting to switch. Others bought extra iPhones as gifts, and many waited a day or more to attempt activation. The AT&T activation period of 36 hours is likely to undercount those initial sales; and it left out another 24 hours of the weekend.

Steve Wildstrom

July 25, 2007 12:41 PM

One word of caution about the Apple report: The Apple numbers and the AT&T numbers will not really be comparable. Apple reports shipments, AT&T activations. But that said, activation delays are unlike to account for a 4X discrepancy between AT&T's numbers and the wilder predictions.

Neil Anderson

July 25, 2007 1:09 PM

No worries. A pretty phenomenal launch for any first generation electronic device at that price point.

Peter

July 25, 2007 2:06 PM

Thousands of phones that were sold that first weekend were not activated until the following Monday (including mine). My guess is that AT&T and the Apple stores sold about 200,000 the first 1.5 days that they were available. Not bad at all.

James

July 25, 2007 2:38 PM

Everyone keeps forget that Apple sold iPhones on-line and those phones could NOT have been activated that weekend, since they would not have been received until the following week.

Eytan

July 25, 2007 3:36 PM

Steve,
Actually, Apple does report unit sales and not unit shipments.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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