Excited analysts over-hyped expected iPhone sales as AT&T revealed it had only activated 146,000 iPhones in the two days before its quarter ended. Apple is set to reveal actual iPhone sales figures for its third quarter later on Wednesday.
AT&T is the only US wireless carrier for the iPhone. When the Apple device went on sale on 29 June, 2007 buyers had to activate it with the US carrier, whose second financial quarter finished on 30 June. Yet AT&T's numbers indicate that only about 150,000 iPhones were sold in that time. After this was revealed, Apple shares fell $8.81 (6.1 percent) to $134.89, its largest fall in over six months.
The AT&T number contrasted poorly with analyst expectations of up to 500,000 iPhone sales in those two days. So has the iPhone flopped?
There were problems with the activation process which slowed activation numbers down. Many of the business buyers of the iPhone had to wait until 2 July, to get their activation started, after AT&T's second quarter had ended. Thus the actual iPhone sales total is bound to be over 146,000, but the question is by how much?
AT&T's report states, 'Sales of the iPhone continue to be strong in July with store traffic above historical levels,' which indicates no slackening of demand.
However, CIBC World Markets saw a large decline in iPhone demand over the past ten days, noting good inventories at stores and what it called "thin demand."
David Bailey, a Goldman Sachs analyst was reported as saying that up to 700,000 iPhones were sold over the last weekend in June, twice as much as he had originally expected.
Meanwhile Piper Jaffray & Co technology analyst Gene Munster was reported to have said that Apple sales met his expectations. He said the general Wall Street consensus increased from 200,000 iPhone sales in June to 500,000 as expectations became hyped.
A Times Online report said that Piper Jaffray and Global Equities Research put the number of sales of the device at 500,000 and 525,000, respectively.
Similarities with the iPod are expected when Apple reports its figures, as its famous music device was also initially a slow starter. In Apple's previous financial quarter (Q2 07), it sold an impressive 10.5 million iPods, up 24 percent up from a year earlier. A similar increase for Apple's third quarter would see around 13,200,000 iPods sold.
Meanwhile Apple is gearing up for the next major release of its MAC OSX operating system, v10.5 code-named Leopard, slated for October. This has a lush, deeply saturated GUI with eye-catching new pop-up file Stacks in its desktop interface.