News

Apple May Have Missed Its iPhone Internal Sales Target

Thursday, July 5th, 2007 at 12:25 PM - by

The "whisper number" sales goal for the iPhone on opening weekend was one million phones. The fact that Apple seems to have missed that goal has competitors breathing a little easier, according to Scott Moritz of The Street on Tuesday.

"The sales goal -- or so-called whisper number -- both internally at Apple and on Wall Street was a nice round 1 million phones," Scott Moritz wrote. Estimates have ranged from a low of 200,000 phones sold since June 29th to about 700,000.

If Apple had sold out completely at the debut, demand for the phone would be seen as unquenched and potentially unknowable. But since only about three-quarters of the magical allotment were sold, "We now know that demand was less than a million," said IAG Research's Roger Entner. "There's a lot of rejoicing at Sprint, Verizon and T-Mobile," he added.

Analysts, according to Mr. Moritz, estimate that about half the iPhone sold came from taking customers away from the other carriers, Sprint, Verizon, and T-mobile. The other half consisted of new AT&T customers.

As a result, Mr. Entner thinks, "For the other carriers, it's not a game changer. It's business as usual again."

Time will tell is this assessment turns out to be true. Investors, however, seem to be pretty happy and have not overlooked the idea that Apple and AT&T are actually making good money on a mobile phone.

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Engine Joe said:

member since 29 Jun 2004 with 413 posts, unranked, send him a message or view his profile

Thu Jul 05, 2007 12:39 pm

Mr. Mortiz made that 1 mil number up after the fact. Indeed, his own estimate was 400,000.

http://onebuttonmouse.com/ramblings/iphoney/

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A guest said: (hide)

Thu Jul 05, 2007 12:42 pm

sad man trying to get hits for his blog.

sad.

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A guest said: (hide)

Thu Jul 05, 2007 12:45 pm

"If Apple had sold out completely at the debut, demand for the phone would be seen as unquenched and potentially unknowable. But since only about three-quarters of the magical allotment were sold,"

Apple HASN'T sold out? I thought you were reporting that there was only one shop in the US that had them today. Surely sales would then simply be equal to whatever the supply was.

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vasic said:

member since 09 Aug 2005 with 278 posts, unranked, send him a message or view his profile

Thu Jul 05, 2007 12:53 pm

Incredibly weak piece. The number of one million cannot be found ANYWHERE. Not on Apple rumour sites, not in any other analysts' forecasts, absolutely nowhere. Therefore, Mr. Moritz seems to have pulled that number out of his arse. Obviously, his intent was on writing an article that would attempt to "rain on Apple's parade". According to most estimates, they sold between 500k and 700k units in three days. That would mean smashing all previous records for consumer electronic devices (RAZR, the record-breaking cellphone of all time, sold its first 700,000 in one month!). With such numbers, Mr. Moritz would have not been able to spin this into a 'debacle'. Therefore, he makes up this imaginary, 'nice round number' of one million and declares a missed target.

What is even more amusing about this is, the competitors (mainly Verizon and Sprint, as he does not mention T-Mobile) are supposedly 'rejoicing' now, as a result of a three-day sales figures. The article more sounds like a PR spin from Verizon / Sprint. The timing was perfect for damage control, as there was going to be a lot of it and not much could be done by Verizon/Sprint to control it. It will be interesting whether this article would affect Mr. Moritz's career as a journalist/analyst, since it definitely should; if there ever was a single journalistic event that could completely obliterate journalistic credibility (with the exception of Jayson Blair fiasco), I haven't heard of it.

Well, Mr. Moritz, no matter how you spin it, Apple broke all records. It eventually sold out (it is probably better they ran out of stock later than in first three days). Obviously, people continue to demand the phone. The 'whisper number' that you were talking about, which was initially tossed around as a target for the entire 2007, seems to be within reach for the next few days. I wouldn't be surprised if it is surpassed by the end of the coming weekend (remember, we do have three more days to go, and supplies will definitely be replenished). It is clear, though, that investors didn't buy your story (AAPL stock is currently around $131 - all-time high again!).

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A guest said: (hide)

Thu Jul 05, 2007 2:08 pm

TRANSLATION

---------------------------------

Look, I (John Martellaro) have plenty of stock in Verizon and T-Mobile. Since iPhone has beat expectations I am losing money in my portfolio so I need to do something to "steer" things more to my benefit. First I will start with fictional and contradictory information, spin it with vague and unprovable statements (whispers from un-named sources) so I cannot be denied or held accountable for lying outright and post it on my blog so I can lie to investors to make them feel as if iPhone wasn't the success it turned out to be so I (John Martellaro) can make sure my own self interests are met to my satisfaction.

What a loser. I mean come on. This is beyond reaching. Face it. iPhone BEAT EVERYONE's expectations inlcuding Steve Job's and made history and is still making history. I know stock holders of competitors are crying right now and scrambling to come up with something but let us be a little more realistic and start basing it in reality. In the end the competition is good for the consumer. More competition means better things for the consumer and in the end will drive a more competive market helping EVERYONE.

To the editors of John Martellaro's article the only thing I can say is this. Is this a rumor site or just a site for media manipulation for the prospects of self gain? Is there editors at all or can anyone just post anything here and call it "fact".

Sad. Very sad.

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Intruder said:

member since 07 Jul 2004 with 3144 posts, TMO Mac Specialist, send him a message or view his profile

Thu Jul 05, 2007 2:18 pm

Martellaro isn't saying any of that. The article is referencing a piece written by Scott Moritz at thestreet.com. It is showing direct quotes from said piece.

You need to read more closely.

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j.martellaro said:

member since 07 Dec 2006 with 97 posts, TMO Staff, send him a message or view his profile

Thu Jul 05, 2007 2:33 pm

Intruder is correct. I try to keep the readers informed about what people are saying, especially from a source like The Street.

My personal opinions are in my editorials.

-jm

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A guest said: (hide)

Thu Jul 05, 2007 2:33 pm

Yes, clearly the iPhone isn't a hit product, that changes both how people pay for cell phones and what they will expect feature-wise from cell phones. Even though they more than doubled some analysts predictions for sales AND have pretty much sold out across the US, because sales MAY have only been 80% of a secret number somebody made up, clearly other cell phone manufactures have nothing to worry about. Heck, Apple might as well abandon the product now.

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mike3k said:

member since 31 Dec 2001 with 61 posts, unranked, send him a message or view his profile

Thu Jul 05, 2007 4:38 pm

He pulled that number out of his butt. Gruber already debunked his claim.

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A guest said: (hide)

Thu Jul 05, 2007 8:03 pm

$59.99 per month for ANY phone is ridiculous. Drop it to $19.99 per month and watch other cellular companies cry.

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papamaui said:

member since 28 Jun 2001 with 47 posts, unranked, send him a message or view his profile

Thu Jul 05, 2007 8:36 pm

Here on Oahu in Hawaii, all AT&T stores old out the first night. Only the two Apple Stores had iPhones on Saturday and on Sunday, at 3pm, the Ala Moana Apple store had only the 4GB model in stock ... no lines ... and I bought one. Why did I wait? Simple!!! I've got more to do with my life than standing in lines!!!

Now that I've had a chance to use it for a few days, I only have one word that describes it and that word is from my college days 45 years ago: "AWESOME!"

When AAPL stock was at $14.85, I switched from PCs to the original Classic iMac and bought OS X as soon as it came out ... and a couple of years later, bought the "new" iMac 800 mhz. I used the same word then when describing my Macs + OS X to my friends! Sure, it was slow and a little rough around the edges but I saw its heritage and fantastic poltential ... and now it's even running iPhone! OS X is really the best OS out there today!

By the way, my first computer was an IBM dual floppy drive ... one floppy for the program, one for the data! I used it in my business by getting into Basic and adjusting it to do what I needed done. Next computer was another IBM with a hard drive. Progress! When Windows came out, I had to try it but gave up on it ... just toooo slow! Wrote my first database application using Paradox Application language for DOS ... later rewrote it in Access Basic under Win98. Those were the days that MS disabled Passive Cooling in Win98 ... and one day I was pushing my PC's multi-tasking too far and my processor burned up! Microsoft denied it was a "known problem" but in Nov 2006, they changed their mind and said overheating was a "known problem".

Interesting way of doing business ... anyway, we've come a long way since those days ... and Apple in my opinion has made the greatest advances. I'm looking forward to upgrading my present iMac 800 mHz when the new iMac comes out soon ...but I won't stand in line for it either

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gslusher said:

member since 13 Nov 2002 with 2088 posts, unranked, send him a message or view his profile

Thu Jul 05, 2007 9:10 pm

Anonymous wrote:
$59.99 per month for ANY phone is ridiculous. Drop it to $19.99 per month and watch other cellular companies cry.

Compare the rates to other carriers' rates. I pay $39.99 just for voice--no data. The only "extra" is that calls made from within Oregon and southern Washington to numbers in that same area are not charged long distance rates. My home phone costs more than $19.99/month.

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A guest said: (hide)

Thu Jul 05, 2007 9:41 pm

Guest wrote:
"If Apple had sold out completely at the debut, demand for the phone would be seen as unquenched and potentially unknowable. But since only about three-quarters of the magical allotment were sold,"

Apple HASN'T sold out? I thought you were reporting that there was only one shop in the US that had them today. Surely sales would then simply be equal to whatever the supply was.

I'm just as puzzled as this guy. Is Moritz just a total idiot not noticing this basic logical contradiction? Who would set a target of 1 million and then just stock 750 thou? Are the editors at The Street a bunch of freakin' morons as well?

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A guest said: (hide)

Thu Jul 05, 2007 9:54 pm

Speaking of AT&T, are we Citizens, who own phones, or are we just phone owners. How 'bout AT&T pays ME, an OWNER of this Country, to use their system.

"This subpoena authorization is a critical first step toward uncovering the full extent of the NSA's illegal spying and the role that telecommunications companies like AT&T played in it," said EFF Staff Attorney Kevin Bankston. "Considering that it's been almost six years since the NSA started spying on Americans without warrants and over a year since that spying was revealed publicly, these subpoenas are long overdue. It's high time for Congress to get to the bottom of this mess."

"The Electronic Frontier Foundation (EFF) is suing AT&T for illegally assisting in the NSA spying."

http://www.eff.org/news/archives/2007_06.php#005329

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A guest said: (hide)

Fri Jul 06, 2007 1:42 am

j.martellaro wrote:
Intruder is correct. I try to keep the readers informed about what people are saying, especially from a source like The Street.

My personal opinions are in my editorials.

-jm

With all due respect, who wrote the headline? Does Mr. Martellaro or anyone else at the iPod Observer believe the headline to be true, i.e. that Apple may have missed its sales goals? My impression is no one believes it. If this is the case, it looks like 2nd rate journalism to me to mislead us readers with the untrue headline. The true headline might have read something like: "Silly blogger writes gibberish about iPhone sales goals." But I suppose there's little sensational or newsworthy about silly bloggers writing gibberish.

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A guest said: (hide)

Fri Jul 06, 2007 2:40 am

""Silly blogger writes gibberish about iPhone sales goals." But I suppose there's little sensational or newsworthy about silly bloggers writing gibberish."

That head would be much more editorial than news. Use of those adjectives conveys opinion, even if it is true.

-Dan

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A guest said: (hide)

Fri Jul 06, 2007 6:59 am

And when the traitors at AT&T are hanged (legally), Verizon and Sprint will see their stocks rise. I'm sure Apple is already meeting with them re the iPhone, so if you own Apple stock, not to worry.

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A guest said: (hide)

Fri Jul 06, 2007 10:57 am

Guest wrote:
""Silly blogger writes gibberish about iPhone sales goals." But I suppose there's little sensational or newsworthy about silly bloggers writing gibberish."

That head would be much more editorial than news. Use of those adjectives conveys opinion, even if it is true.

-Dan
You are definitely correct, but I think I understand his frustration. How is this even news? Every time someone posts an opinion piece about Apple, do we really it posted at TMO? It seems like Mr. M is turning this site into some low-rate Apple Slashdot. Here's a link and some filler. Wow thanks. At least the other contributors on this site still write actual stories about Apple news.

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