iPhones piling up at AT&T stores?

[Mobile Mike]

This report was interesting to read....

From CNET News

Is demand for the iPhone in America already starting to wane?

AT&T, the exclusive American carrier of the iPhone, activated just 900,000 iPhones during the fourth quarter, the company revealed during its earnings conference call Thursday. It wrapped up the year with "just at or slightly under 2 million iPhone customers," according to company executives.

Apple announced at Macworld that it has sold 4 million iPhones through the middle of January, and Toni Sacconaghi, a financial analyst with Sanford C. Bernstein, thinks the gap between the figures means that Apple might have a demand problem. He released a research note Thursday after AT&T's earnings saying that the carrier's figures imply that an awful lot of inventory is building up at Apple's channel partners.

"We believe the data points to a significant amount of iPhone channel inventory...This is negative in two ways: (1) it indicates end-user demand for iPhone is lower than many investors may think based on Apple's sales figure; and (2) it points to slower iPhone sales in the current quarter, since much of this inventory is likely to be drawn down," Sacconaghi wrote in his report.

Let's walk through the theory. Apple said on Tuesday that it sold 3.7 million iPhones in 2007. But AT&T said Thursday that it ended 2007 with around 2 million iPhone customers.

One huge difference between the third quarter and the fourth--other than the temperature--was that the iPhone became available for sale in the U.K., Germany, and France through other carriers. But even the most optimistic estimates for iPhone sales in Europe didn't come within shouting distance of 1.7 million units. O2, the exclusive iPhone carrier in the U.K., has said it expects to have sold 200,000 iPhones by around this time, and France's Orange and Germany's T-Mobile were expected to sell about 100,000 units each in 2007.

So that leaves 1.3 million iPhones to find. (Sacconaghi only estimates European sales at 350,000, so he uses 1.4 million.) The first theory would be that iPhone unlocking is rampant.

But how is that possible? The Great iPhone Hack settled into a bit of a stalemate with the release of the 1.1.2 firmware. On the day the iPhone was released in the U.K. and Germany, Apple released the 1.1.2 firmware upgrade for older iPhone users but included an updated version of the iPhone's bootloader--which loads software from storage--on all new iPhones that made unlocking the phone to run on other networks much, much harder and virtually impossible through software.

After venturing a guess in October that as many as 250,000 iPhones had been purchased with the intention of unlocking, Apple Chief Operating Officer Tim Cook declined to make an estimate this time around, saying the company didn't have a reliable way of estimating the total. According to Sacconaghi, even if you assume 20 percent of all iPhones purchased in 2007 were bought with the intention of unlocking--which was Cook's rough estimate in October--that still leaves 670,000 iPhones unaccounted for in 2007. Where are they?

Apparently, they're on a shelf somewhere. "Excluding Apple's own stores, there are about 4,400 total iPhone distribution points worldwide, suggesting each had more than 150 units of channel inventory at the beginning of this year. We believe channel inventory likely built even more in the first few weeks of 2008, given Apple continued to ship iPhones at a high run rate," Sacconaghi wrote.

Apple still expects to sell 10 million iPhones during 2008. It can easily do that with launches in Asia and other European countries, a new 3G model, a price cut, significant new applications delivered in February alongside the release of the software developer's kit, or all of those factors. It's not hard to imagine that a lot of people are waiting for a faster iPhone.

But it is hard to believe the iPhone phenomenon might already be subsiding in the U.S. after just six months, although Wall Street is clearly worried about Apple this week despite soaring Mac shipments and an excellent holiday quarter. Apple's stock has lost 15 percent of its value this week. Granted, it was a bad week for lots of companies, but even in the face of a broader rally Wednesday and Thursday, the stock continued to shed value Thursday.

[Eric47]

lets not forget, people were also getting them as gifts. and the iphones arent counted as customers unless they are activated. possibly some of the 4th quarter sales rolled into the 1st quarter?

[Mobile Mike]

Originally Posted by EricN4707

lets not forget, people were also getting them as gifts. and the iphones arent counted as customers unless they are activated. possibly some of the 4th quarter sales rolled into the 1st quarter?

True but not at the volume needed to clear the numbers discrepancy. There were a couple of articles I came across about this story. This was mentioned in one of them.

[Eric47]

there definetly is some skued numbers, i think that apples numbers are probably inflated. espically with the way the economy and stock is heading, what better way to try and hedge your stock prices but to issue sales at an inflated rate

now of course there are phones being bought and resold or hacked or whatever, but i seriously think that is a small small small amount. espically since 1.1.2 which came out at the beginning of the 4th qrtr

[Simon5282]

Originally Posted by EricN4707

......now of course there are phones being bought and resold or hacked or whatever, but i seriously think that is a small small small amount. espically since 1.1.2 which came out at the beginning of the 4th qrtr

I would think so, but I am not so sure because of the international demand on the black market. It is hard to judge how big that international market is.

[Jay2TheRescue]

Originally Posted by EricN4707

there definetly is some skued numbers, i think that apples numbers are probably inflated. espically with the way the economy and stock is heading, what better way to try and hedge your stock prices but to issue sales at an inflated rate

now of course there are phones being bought and resold or hacked or whatever, but i seriously think that is a small small small amount. espically since 1.1.2 which came out at the beginning of the 4th qrtr

I don't think its as skewed as much as you think. As a corporation they count the units sold when they are shipped from their distribution warehouses. AT&T is counting them sold when they reach the end user.

-Jay

[Jerro]

Report: iPhones piling up at AT&T stores | One More Thing - CNET News.com

[Mobile Mike]

Originally Posted by Jay2TheRescue

I don't think its as skewed as much as you think. As a corporation they count the units sold when they are shipped from their distribution warehouses. AT&T is counting them sold when they reach the end user.

-Jay

This makes total sense. It is funny how companies like to "play" with numbers,,,

[MOTOhooligan]

Originally Posted by Jerro

Report: iPhones piling up at AT&T stores | One More Thing - CNET News.com

I merged your thread with this one since they are about the same article.

[cellular_freak]

My friend and I are actually two of those people who are actually awaiting the release of a 3G iPhone. I know many people say that people will get the iPhone no matter what and what not, but I really think that the fact that it doesn't have 3G is holding a lot of people back. Especially people that are occustomed to Verizon's and Sprint's EV-DO networks (as my friend and I am). I believe that if Apple released a 3G iPhone, AT&T would see a huge influx of customers from carriers like Verizon and Sprint that are used to faster data networks. I'd also hope for AT&T to deploy 3G in more areas as well. It is very evident if you look at their coverage maps that they do not cover as many areas in the US with 3G compared to Verizon and Sprint.

[Jay2TheRescue]

Originally Posted by cellular_freak

My friend and I are actually two of those people who are actually awaiting the release of a 3G iPhone. I know many people say that people will get the iPhone no matter what and what not, but I really think that the fact that it doesn't have 3G is holding a lot of people back. Especially people that are occustomed to Verizon's and Sprint's EV-DO networks (as my friend and I am). I believe that if Apple released a 3G iPhone, AT&T would see a huge influx of customers from carriers like Verizon and Sprint that are used to faster data networks. I'd also hope for AT&T to deploy 3G in more areas as well. It is very evident if you look at their coverage maps that they do not cover as many areas in the US with 3G compared to Verizon and Sprint.

3G is expanding daily. Every time I drive to my Mom's place the phone holds 3G a little bit longer each time. last time I went down there I went a full 10 miles past the point where 3G stops on the coverage maps and still had great 3G signal.

-Jay

[hf1khal]

Originally Posted by Jay2TheRescue

3G is expanding daily. Every time I drive to my Mom's place the phone holds 3G a little bit longer each time. last time I went down there I went a full 10 miles past the point where 3G stops on the coverage maps and still had great 3G signal.

-Jay

I seem to agree with you. Today my new home went 3G and the surounding area was but at 3 bars and for me it was full bars with edge (same in the surounding areas) and to my surprize, 3G was a full tilt today. I would say if the iphone goes 3G then it could for sure experience a jump in sales. I would also think if they do support exchange server, this could mean trouble for other smartphone makers.

[Eric47]

i cant wait till we are 3G here...and for blackberry to make a 3G device..the iPhone is nice..but a 3G blackberry would fit me much much better..out of all my phones my curve is my lifeline..if it was 3G with a slightly better browser i would not need another phone.

[bobolito]

Originally Posted by hf1khal

I seem to agree with you. Today my new home went 3G and the surounding area was but at 3 bars and for me it was full bars with edge (same in the surounding areas) and to my surprize, 3G was a full tilt today. I would say if the iphone goes 3G then it could for sure experience a jump in sales. I would also think if they do support exchange server, this could mean trouble for other smartphone makers.

While that would be nice, but do you really expect that Apple will support anything Microsoft? I do expect, however, some 3rd party app can add Exchange support to the iPhone, of course, after you Jailbreak it!