Is Apple Inc's (NASDAQ: AAPL) iPhone a flop? That's what the stock market seems to think, judging from the decline in the share price of Apple and the phone's exclusive vendor AT&T Inc. (NYSE: T), after the telecom company reported disappointing sales numbers.
AT&T, which also had lackluster earnings, signed up 146,000 iPhone customers in the first two days of sales, below analysts' forecasts of more than 500,000, according to Reuters. How meaningful is this? After all, there is no possible way analysts could have accurately predicted sales of the iPhone since it's so unique. About the best analysts could do is make educated guesses, which have proven to be wrong.
Does this mean that there are a lot fewer gadget freaks -- sorry early adaptors -- who are dying to have what some have dubbed the Jesus phone? Not necessarily. After all, we're only talking about two days here.
But only the most rabid of geeks, including Philadelphia Mayor John Street, were so motivated to get the iPhone that they had to be among the first to get them. Other geeks, no doubt, have jobs or were smart enough to avoid the long lines that were created by the Apple hype machine.
Though sales will pick up in the coming weeks and months, it's important to remember that the people who camped out for the iPhone represent a tiny minority of consumers. Most people don't have to have the latest and greatest gizmo as soon as it comes out, especially one with a hefty $499 to $599 price tag. Our sister blog TUAW has a good rundown here of the iPhone's many bugs and a good primer of the phone here.
For the iPhone to be a success, Apple will have to convince the many non-geeks in the world, including me, of the iPhone's value, and that may be difficult.
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Reader Comments (Page 2 of 2)
7-25-2007 @ 8:34AM
DarthHorse said...
Steve Jobs is a commie, Al Gore is a commie. Google and Apple are elitist companies, avoid them and their stocks.
7-25-2007 @ 10:25AM
PJ Altshuler said...
146,000 represents only part of the sales from 6-9 PM Friday and Saturday sales. Customers had to go home to set up their own service (not activated in the stores). Then AT& T had issues and problems with the majority of the applications, the phone lines jammed --hour and half; to two hours holdng on the phone to talk to someone at AT &T on the first few days to resolve a problem. Then most of them had no idea how to get the phone activated. My problem was that my married last name did not match my old AT & T single last name- application error! It took A T & T until Monday to correct that problem, then I could not activate the phone until I called iphone because A T &T did not know how to tell me to reset the phone for reactivation! July earnings should be a totally different story with a million phones sold. A T & T should be happy with their monthly billings from these sales. Read the www.apple.com help/comment sections to see the real issues of what happened in those first two days. See how many consumers has problems with AT & T and what consumers went throught with them --they were not prepared. On the other hand, Apple did and excellent job crossing over to some of the AT & T functions to keep the customers happy. Love the new phone and its features and I am not computer geek, it is very user friendly in the day to day use.
7-25-2007 @ 11:27AM
STEVE said...
WITH ALL HONESTY THIS PHONE IS NICE BUT IT ISNT EVERYTHING FOR ALL PEOPLE. THE PRICE TAG FOR ONE WAS NOT A GOOD WAY TO START EITHER. A BETTER CARRIER SERVICE WOULD HAVE BEEN BETTER VERIZON HAS BETTER COVERAGE. AT&T IS PRETTY LAME. THE CHOCOLATE IS A MUCH MORE PRACTICAL CHOICE...
7-25-2007 @ 1:31PM
Beltway Greg said...
"Analysts don't know preferred stock from livestock."
G. Gecko
They made some hedge fund manager in Greenwich a hell of a lot happier by giving him/her the opportunity to buy in at $135.00. See you at $150.00.
Beltway Greg
See you at $150.00
7-25-2007 @ 5:50PM
John Goldsmith said...
Your write up smells like you've never actually touched an iphone. It is the least geek-designed device since I bought my first Apple II. The "phone" is meaningless. The completly not-for-geeks, consumer friendly interface is the beginning of a whole new era in electronics that actually deliver on the hype, with ease.
7-28-2007 @ 9:38AM
kid cognac said...
Is it a flop? Not for those who HAVE TO HAVE the latest techno toys. But from what I've seen, a very similar affordable technology is on it way rather quickly.
It would piss me off if I could get the same unit and service for 1/2 the cost a few months later.
Well, that's techno biz!
7-29-2007 @ 11:35PM
lulufroggie75 said...
WHY AT&T? or is it Cingular, no wait its.....make up your minds!!!!! For Apple to go with AT&T, is HORRIBLE!!!!!! Yes every cell phone carrier wants to have its own exclusive products, but who on earth is AT&T? Apple should have been wiser and offered its phone with the rest of the major carriers, because in the end, everyone would profit anyway. People don't want to pay a cancellation fee for the sake of a "hot" phone, so why not extend the offer to everyone? I hope Bill Gates is smarter when his gadget drops.
8-01-2007 @ 8:00AM
Shannon said...
yeah! Its a flop because it is very expensive. Iphone is purely overrated and over hyped. There are phones that has the same feature as the iphone can, take for example the LG choco phone that i bought last month at http://www.bestcellularphoneserviceplans.com , it has the touch screen feature that iphone does. Trust me, its purely overrated.
8-03-2007 @ 12:00PM
Neal said...
Let's not forget, also, that actual reported sales were very nearly double that figure. 140-some thousand was the number of activations. An almost equivalent number were, for whatever reason - gifts yet to be given, folks waiting for an old contract to expire, folks who just wanted to hack the activation in order to secure themselves a really expensive ipod with wifi - not yet activated.
9-06-2007 @ 10:48AM
Phatman said...
"20. Steve Jobs is a commie, Al Gore is a commie. Google and Apple are elitist companies, avoid them and their stocks.
Posted at 8:34AM on Jul 25th 2007 by DarthHorse"
Are we still using the word "commie"? I thought everyone had switched over to "terrorist" as their new meaningless FUD.
9-09-2007 @ 11:24AM
clint elkins said...
when is apple going to upgrade the bugs out of the new iphone, what in hell has happen to BX iphone stock,bought 200 shares at 29.00 down now to 19.00l lost 1,000.00 less then 3-months with apple & blackstone billions of dollars why are you misleading the public!!!!