Record Apple iPhone sales fail to wow Wall Street
Apple (AAPL) sold more than 10 million units of its newest iPhone models. CEO Tim Cook bragged in a press releasethat the Cupertino, Calif. company "couldn't be happier." Investors, though, don't seem to be sharing his enthusiasm.
Shares of Apple, which have climbed more than 26 percent this year barely budged in early trading, indicating that Wall Street expected better from the company. According to Bloomberg News, analysts weren't sure how well the iPhone 6 and iPhone 6 Plus would sell in their first weekend of availability. One estimated that 15 million units would move, while another analyst forecast that sales would fall short of last year's launch of the iPhone 5S and 5c because supplies wouldn't be able to keep up with demand and the newer models weren't available in China, the world's largest wireless market.
Early reports indicate that many people who wanted the larger screen iPhones weren't able to get them. In a press release, Cook noted "we could have sold many more iPhones with greater supply and we are working hard to fill orders as quickly as possible."
College student Cory Nguyen braved the lines in Portland in the hopes of making a quick buck on the iPhone 6s he purchased.
"I know people," Nguyen told Bloomberg News. "Everyone wants an iPhone. It's high demand. It's extra cash."
The good news doesn't stop there. According to a Piper Jaffray survey, more consumers are buying the iPhone 6 Plus, which has a 5.5-inch screen and is priced at $299 to $499 depending on the configuration, compared with the 4.7-inch iPhone 6, which sells for $199 or $399 depending on configuration (and typically a two-year contract). People are also paying more for additional storage since, as Jay Yarrow at Business Insider noted, Apple doubled the amount of storage available on its middle and higher-end iPhone 6s though it kept the capabilities of the lower-end phones.
When smartphones were first introduced less than a decade ago, phone companies were able to grow their businesses by selling them to people who didn't have them. As the market matured, the industry changed its focus to stealing existing customers from their rivals.
"Pretty much everyone who wants a smartphone has a smartphone," said independent telecommunications analyst Jeff Kagan in an interview with MoneyWatch.
One reason why the new iPhone sold well is that wireless providers such as Verizon Wireless offered some pretty sweet deals, such as a free iPhone 6 to customers who traded in their older models and signed up for a 2-year-contract. AT&T, the carrier that was first to sell the iPhone, is offering customers who to buy the newest model a $300 trade-in credit. Sprint recently announced a program to give customers an "iPhone For Life" plus unlimited data for $70 a month, while T-Mobile if offering what it calls the "best trade-in value in wireless guaranteed."
More Apple products are in the works ahead of the critical holiday season such as new iPad models, according to media reports. Of course, the new iPhones will be available in the rest of the world as well, including the crucial Chinese market. The Washington Post noted that the iPhone 6 is fetching as much as 10 times the U.S. price in the world's most populous country.