iPhone Sales Disappoint Apple Watchers

AT&T Inc. (NYSE: T) posted another three months of wireless growth for its fiscal fourth quarter results today, but some market watchers were disappointed by potentially weaker-than-expected sales of the iPhone.

AT&T reported that it sold nearly 150,000 of the Apple Inc. (Nasdaq: AAPL) phones in the day and a half before the end of the quarter and described the device as a hit.

Some analysts were impressed by the sales.

"In the last day and a half of the quarter, when the iPhone was made available, AT&T sold 146,000 iPhones, 40 percent to new customers," notes analyst Ken Hyers at Technology Business Research Inc. (TBR) . "The company most likely sold many more iPhones at launch, but due to the quarter ending during the weekend the handset went on sale, not all iPhone activations were reflected in the... results."

Others, however, had been predicting bigger things from the iPhone. Notably, Gene Munster at Piper Jaffray & Co. who put out a research note claiming that the carrier would sell half a million iPhones in the first weekend of launch.

Apple itself had never been that specific but previously predicted it would sell 10 million units by the end of 2008. (See Cingular: The iPhone Price Is Right .)

A spokesman for AT&T says the operator was very happy with sales and with the number of iPhone accounts switched on around the launch: "The activation process worked extraordinarily well -- we couldn't be more delighted."

Munster hasn't yet responded to Unstrung's questions on his prediction. "He's been bombarded with requests," the press person at Piper Jaffray explained this afternoon.

The analyst, however, is such a star in Apple watching circles that he now has his own doppelganger blogger! The fake Gene had plenty to say on the subject of the iPhone.

Apple certainly took a hit from the sales news. The iPod maker's shares fell $5.66 -- around 3.96 percent -- to $138.36 a share in afternoon trading.

Generally, however, the Operator Formerly Known as Cingular (OFKAC) had another solid wireless quarter. The largest cellular operator in the U.S. added 1.45 million wireless subscribers in the quarter, up over 11 percent compared to the previous year.

Wireless average user per revenue was also up, thanks in part to increased data revenues. Overall, average revenue per user (ARPU) improved by $1.42 for the quarter to $50.63, up 3.7 percent year-to-year. Data ARPU was up by $3.00 year-over-year to $8.77.

"AT&T’s emphasis on building out its 3G HSDPA network is beginning to pay dividends as the company drives higher data ARPU, though it still has some ways to go before it catches up to competitor Sprint Corp. (NYSE: S), currently the leader in driving data ARPU," notes TBR's Hyers.

— Dan Jones, Site Editor, Unstrung

gocowboys 12/5/2012 | 3:05:03 PM
re: iPhone Sales Disappoint Apple Watchers The difference is that Apple will fix the battery problem and ultimately do well in the market. I am hearing that there are a number of newbie issues with the iPhone and would expect a better version in some months. If you want to have the new toy on the block, you have to deal with a few problems.

Incidently, my old Toyota blew valves due to an aluminum head...I think that they are still around. :-)
zwixard 12/5/2012 | 3:05:03 PM
re: iPhone Sales Disappoint Apple Watchers The Yugo attracted many buyers when it came to the US some 20 years ago. Its welded cylinder head killed it. What should an owner do during the 3 days Apple replaces his/her iPhone?
GreenPoisonFrog 12/5/2012 | 3:04:59 PM
re: iPhone Sales Disappoint Apple Watchers So you think that the only think that killed the Yugo was a welded cylinder head? Uh, don't think that was the only thing wrong with it.

And Apple has published a policy as to what the customer should do if they have to replace the iPhone (since you say 3 days, I assume you mean the battery).
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