It has been a month since the launch of the iPhone and in this post we will see how Apple (NASDAQ: AAPL) has been doing since the launch.
Following the launch, estimates of the first weekend sales of iPhone took the figure to an over optimistic and ridiculous level of 700,000. The announcements from AT&T and Apple brought it down to 146,000 activations and 270,000 sales (including accessories, it appears). Though it looks modest in comparison to the earlier estimates, it is nevertheless a strong sale and Apple expects to sell 1 million iPhones in the first three months. May be more. The iPod took a bit of time to hit its stride, and there is no reason for the iPhone to not follow suite.
A USA Today report on iPhone customer satisfaction shows that despite initial activation glitches, 90% of the customers are very happy with their iPhones. However, the report says that the customers wish the iPhone had longer battery life, faster Internet speed and more internal memory. AT&T being the exclusive carrier does not seem to be a problem with 50% of the buyers switching from another carrier. [It is with me, and I have not switched from Verizon yet.]
Another issue with the iPhone is its high cost. As per the report, it ranks as the No. 1 reason for deterring consumers interested in the device from buying an iPhone. When viewed as a laptop-replacement device, the iPhone’s cost justifies just fine. However, for me, the keyboard remains a problem to meet that goal. Nonetheless, there are many users who don’t need to type as much, and can effectively use the iPhone in this mode, as a laptop replacement device.
iPhone is a great consumer device but it just isn’t suited for heavy use as a computer and does not let you edit documents. One of the many reasons why it is not suited for corporate use. Some more issues with corporate use are its high cost, slow AT&T network, and lack of support from mobile security suites and major business mobile e-mail solution providers. I don’t see it as a business use machine quite yet, and not until the keyboard issue is addressed. RIM, Palm – not to worry!
However, there are many takers for the iPhone. It is set to launch in Europe in the fourth quarter.
On the financial front, Apple reported third quarter revenue of $5.41 billion and EPS of $0.92, a 24% growth over the last year’s June quarter sales. Record-breaking Mac sales and strong demand for iPods led to this landmark quarter with the highest revenue in a June quarter. Total revenue from iPhone and iPhone accessory sales was $5 million, which does not account for the payments from AT&T. Apple would not be accounting for iPhone revenues in one go, but would be apportioning it across a 2-year period. For the next quarter, Apple expects revenue of about $5.7 billion and EPS of about $0.65. Its stock has done well since the launch when it was $122.04 and hit $148.92 last week, before it dropped today to ~$135 on the news that Apple was cutting production orders from 9 Million to 4.5 Million units. [I am not sure to what extent this news is confirmed, but nonetheless, it has certainly crashed the stock for now.]