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AT&T: 146,000 Apple iPhones activated in first two days

post #1 of 132
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Shares of electronics maker Apple Inc. bled nearly 4 percent of their value in early morning trading Tuesday after AT&T said it activated just shy of 150,000 iPhones during the handset's first two days on the market -- significantly below some expectations on the Street.

Speaking to analysts and members of the media, AT&T said Tuesday that second-quarter earnings rose 61 percent, helped by its buyout of BellSouth Corp. and, to a lesser extent, gains in wireless subscribers and revenue.

The nation's largest wireless carrier and exclusive Apple iPhone provider said that net income rose to $2.9 billion, or 47 cents per share, from $1.81 billion, or 46 cents per share in the prior year's quarter. Subscribers rose by 1.5 million to 63.7 million during the quarter, the firm said.

AT&T attributed a portion of its subscriber growth to the introduction of iPhone, which went on sale less than two days before the end of its second fiscal quarter. In that brief time, however, the carrier said it activated over 146,000 of the Apple handsets, more than 40 percent of which went to new AT&T subscribers.

Still, those numbers proved less appetizing for some on Wall Street, where first-weekend iPhone sales estimates had ranged as high as, and in some cases north of, 500,000 units. Weary-minded investors quickly dumped shares of the iPhone maker, sending the stock down by as much as 4 percent (or nearly $6) in early morning trading to $138.05.

Still, AT&T's early activation numbers could prove to be slightly misleading, as they represent the total number of the Apple handsets that were activated in the first 36 hours or so, and not necessarily the total number of units sold to customers during that time. A significant number of early iPhone adopters were seen buying their limit of two handsets at Apple retail stores during the handset's opening weekend, the second of which may have been activated by recipients after the close of AT&T's second fiscal quarter.

More telling first-weekend iPhone figures are expected as part of Apple's third fiscal quarter earnings report on Wednesday, where the Cupertino-based firm will report on the total number of iPhones sold during its first two days rather than just those units that had been activated.
post #2 of 132
i do think the numbers are misleading!

500k is a bit high, but 140k is a bit low... it will be somewhere in the middle and my guess is we will find out @ apples conference call tomorrw....

some people made a lot of money today... i think the SEC should investigate who @ att authorized those iphone #'s!!!
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post #3 of 132
Dumb question, but:

When AT&T refer to activations, do they mean every handset or just those which were activated in-store by AT&T staff?

I guess the former.
post #4 of 132
What does it matter to Apple how many are activated? Isn't a sale a sale? It only hurts AT&T if it's never activated. Besides, don't any of these skittish investors remember that AT&T had huge problems with the iPhone activation process in the first couple of days, so a lot of people who tried couldn't activate them?
post #5 of 132
Quote:
Originally Posted by alasdair23 View Post

Dumb question, but:

When AT&T refer to activations, do they mean every handset or just those which were activated in-store by AT&T staff?

I guess the former.

I'd guess the former, too. Activations through iTunes were done by AT&T as well, so I don't see why they'd distinguish between them.
post #6 of 132
My guess is 250k units sold since not all people activated in the minute they got them.

still, half the 500k figure.
post #7 of 132
I can't believe people are dumping shares on this news. To me, the big story with Apple is Mac sales. Gains in market share. The continuing iPod story.
Maybe the recent run was based on iPhone, but for true longs this stock is just getting started. As switchers increase and multiply at a growing rate this stock still has plenty of room to grow.
This is a buying opportunity for anyone who's been on the fence.
post #8 of 132
Quote:
Originally Posted by Kolchak View Post

What does it matter to Apple how many are activated? Isn't a sale a sale? It only hurts AT&T if it's never activated. Besides, don't any of these skittish investors remember that AT&T had huge problems with the iPhone activation process in the first couple of days, so a lot of people who tried couldn't activate them?

I'm with you. AT&T's numbers do not correlate to Apple's numbers. I purchased my iPhone within 2 hours of the online store going active for the iPhone, but just received it a week ago. I assume that those online sales in the first two days count for Q2.

Hell, even 150k in two days is still pretty damn impressive. That is about one a second, and doesn't account for the fact that started selling the iPhone 18 hours into the 2nd to last day.
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post #9 of 132
Yeah, i'm not sure why this effects Apple stock.

Product = Apple
Activation Service = AT&T

I can understand AT&T stock slipping.
post #10 of 132
500K - 150K = 350,000 iPhones that people hoped to put on eBay and make a fortune?
i'm laughing at all of them.
post #11 of 132
Quote:
Originally Posted by desarc View Post

500K - 150K = 350,000 iPhones that people hoped to put on eBay and make a fortune?
i'm laughing at all of them.

Ditto. The number of phones bought on launch day is definitely higher than the number of phones actually in use now. My friend bought two extra to sell on ebay. They've been returned per the 14 day return policy.

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post #12 of 132
Quote:
Originally Posted by domerdel View Post

Yeah, i'm not sure why this effects Apple stock.

Product = Apple
Activation Service = AT&T

I can understand AT&T stock slipping.

Really?

Then I'll explain it - people thought ATT sold 300-500,000. At 150,000, that's half the initial sales. BAD for Apple. Duh.

Secondly, Apple gets ongoing revenue for two full years for every phone that IS activated. Some think as much as $10 per customer per month. That's $240 over two years, in 100% pure profit. Apple's profit per sale of an 8 GB iPhone was determined to be in the $300 range. So the profit from an activated phone is about twice that of an unactivated phone.

Of course, all this ignore the fact that so very few sales would be made without activation, since you can't USE the iPhone for anything unless it is activated. So activated sales should be pretty darn close to total sales. All that remain are the few who could not activate, the many who probably returned the 1 or 2 phones they bought and hoped to sell (these sales don't help Apple at all) and the (again, few, IMO) who bought the $500 device and mailed it to a friend or family member unactivated.

So yeah, that's why this is bad news for Apple. Apple has been trading up up up every day in the past 3 months. Ever heard of buy the rumor, sell the news? Well, now you have.
post #13 of 132
1st I doubt Apple's numbers will match AT&T's or be anywhere close but it is still a huge variance from the hyped up numbers that have been flying around and so for many it seems like a disappointment. Apple's 2 day income from the phones will still be a positive supprise since the bounty from AT&T was not accounted for. And APPL will still experiance a selloff before it roars back once investors digest the facts. Traders are differant than investors and lots of the activity will be in traders moving beyond the play and going onto the next victim, oh I mean opportunity.

This is all just a blip in what is clearly a major move up. Now that the bounty seems to be known and it appears clear that Apple's revenue per unit is closer to 1k per unit than 500. I expect Apple will most likely have sold way more than 146,000 phones as I expect that AT&T's process is pretty messed up. I'm a long term Cingular subscriber and I know how bad their systems are. Apple will mostly talk about the achaivements of last qtr and for the most part that has little to do with iPhones. Questions will be asked and I hope that they provide answers that satisfy (often not the case.)

If the $200 bounty and $9 rev share are true aynalsts have a lot of recalculating to do and $205 by the end of 12 months is well within range. What I'm hoping is that on top of this we will get a sales to date or an idea of when they hit what milestones. 300k in 3 days, 500k by x, on track to have shipped a million by end of July or something along these lines.
post #14 of 132
Apple's number of iPhones sold will be higher than the one AT&T reported. There must've been many who bought the phone on Jun 29/30 but activated it after midnight Jun 30th which officially falls under third quarter and not second. I myself had purchased the iPhone on Saturday but got busy with stuff and activated it the following Monday.

Also, a lot of people, analysts included, had talked about iPhone sales numbers for the opening "weekend". But what AT&T reported today, and Apple will tomorrow, will be numbers for just 1 1/4 day (from Friday, June 29th, 6 pm to Saturday, June 30, 12 pm). Sales for the entire Sunday officially comes under the next quarter. This is one of the reasons why 146,000 seems less.

Can't wait for the earnings report after close tomorrow!!
post #15 of 132
The stock will be back up within a week. Not worried.

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post #16 of 132
I've been waiting for a buying opportunity for ages, but the stock keeps edging up and up. Well, I guess this is my chance at last !
post #17 of 132
Seems odd that so many people waited in line and didn't activate immediately? I would think with so much hype and enthusiasm, people wouldn't wait too long to activate.
post #18 of 132
Quote:
Originally Posted by pt123 View Post

Seems odd that so many people waited in line and didn't activate immediately? I would think with so much hype and enthusiasm, people wouldn't wait too long to activate.

I have a feeling that many buyers were just excited about the non-phone functions and may have messed around with those features for hours or days before deciding whether or not to activate the phone.

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post #19 of 132
I dont even like apple but a friend of mine iPhones including 2 or 3 of his friends iphones didnt activate until sunday morning. Didn't their quarter end Saturday. If so what are people going crazy over. Those numbers dont tell how many was sold and dont accurately tell how many was activated that entire weekend. People people calm down.
post #20 of 132
Quote:
Originally Posted by hassanpr View Post

I dont even like apple but a friend of mine iPhones including 2 or 3 of his friends iphones didnt activate until sunday morning. Didn't their quarter end Saturday. If so what are people going crazy over. Those numbers dont tell how many was sold and dont accurately tell how many was activated that entire weekend. People people calm down.

So you just like their stock, huh?

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post #21 of 132
Quote:
Originally Posted by SpamSandwich View Post

The stock will be back up within a week. Not worried.

Me, either. All those sales projections were for the first weekend, not the first 36 hours. Activations do not equal sales. ATT had such huge problems with activations, it's no wonder the numbers are low.

BTW, ATT sold 110k iPhones during the first 36 hours, most of which were sold out in the first hour. They had nothing to sell on Saturday. Most Apple stores were sold out Friday night and didn't get restocked until around mid-day Saturday. I bought my iPhone Saturday afternoon and tried to activate it later that evening but ran into that activation delay. I'm sure my phone didn't show up as an activation but the sale sure did.

Who knows how many phones were sold via the Apple store but not activated for some days later.
post #22 of 132
Quote:
Originally Posted by SpamSandwich View Post

I have a feeling that many buyers were just excited about the non-phone functions and may have messed around with those features for hours or days before deciding whether or not to activate the phone.

You cannot access any of the phone's functions until you activate it.
post #23 of 132
Quote:
Originally Posted by SpamSandwich View Post

So you just like their stock, huh?

I love there stock not just like it but love it i had their stock back from when it was worth 12 bucks and i love it. Always a good performer.
post #24 of 132
Quote:
Originally Posted by hassanpr View Post

I love there stock not just like it but love it i had their stock back from when it was worth 12 bucks and i love it. Always a good performer.

Looks like we're on the same page...

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post #25 of 132
Last two grafs.

"Apple Exceeds 100 Percent Market Share in All Categories -- Shares Plunge" is a likely headline. WS Analysts are idiots.

Word in week 2 of sales was that ATT had activated hundreds of thousands of handsets.
post #26 of 132
Quote:
Originally Posted by alasdair23 View Post

Dumb question, but:

When AT&T refer to activations, do they mean every handset or just those which were activated in-store by AT&T staff?

I guess the former.

Even Dumber question, but:

iPhone for sale June 29th and 30th, wasn't the 30th of June the last day of Apple's fiscal quarter and perhaps AT&T is obliging Apple on not reporting the next quarter's sales/activations/profit potential etc.?

Just a thought.

And had 500,000 iPhone's were sold in first two days, Apple's stock would still be down because the analysts would be saying it fell short of the 1 million mark!

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post #27 of 132
Quote:
Originally Posted by jcatma61 View Post

Last two grafs.

"Apple Exceeds 100 Percent Market Share in All Categories -- Shares Plunge" is a likely headline. WS Analysts are idiots.

Word in week 2 of sales was that ATT had activated hundreds of thousands of handsets.

A trader is supposed to make money for his clients, but more importantly, for himself. You can always rely on their greed and short-term thinking. It's all part of the game.

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post #28 of 132
Also,

Let's not forget that a lot of people decided to buy their iPhones online which would be delivered later and I clearly remember most Apple stores being (red) or reporting being sold out right after the 31st.

So my advice is buy if you can ( Unfortunatly I'm out of money ) because after tomorrow's Apple report, it's going to be a steep climb ... so you better fasten up your seat belts
post #29 of 132
Activation didn't go smoothly for everyone who purchased their phone the first weekend.

AT&T has since gotten this fixed with Apple's help.

This is stock speculation to lower the price before earnings Wednesday.
post #30 of 132
Quote:
Originally Posted by Rot'nApple View Post

And had 500,000 iPhone's were sold in first two days, Apple's stock would still be down because the analysts would be saying it fell short of the 1 million mark!

It's that damn tenured liberal media!
post #31 of 132
Quote:
Originally Posted by Rot'nApple View Post

Even Dumber question, but:

iPhone for sale June 29th and 30th, wasn't the 30th of June the last day of Apple's fiscal quarter and perhaps AT&T is obliging Apple on not reporting the next quarter's sales/activations/profit potential etc.?

Just a thought.

And had 500,000 iPhone's were sold in first two days, Apple's stock would still be down because the analysts would be saying it fell short of the 1 million mark!

But are iPhone sales on track to meet or exceed Apple's projections?

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post #32 of 132
LOL, this shows you that you should never listen to rumors on the Net before you get the offical word from the horse's mouth. Numbers were "reported" as high 750K!
post #33 of 132
I think that this was a strategic move on Apple's part. Get AT&T to pop the bubble two days before the Apple earnings report, and then announce something like "It took only 9 days to sell out the first million iPhones".
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post #34 of 132
If AAPL drops to around 137 or 136 just before today's close, I'll probably snag a big handful of shares. It's a good bet the news will be good tomorrow.

Last time this happened, I made 50% on my money in 3 months.

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post #35 of 132
i also purchased an iPhone on that Friday evening, but I won't be activating it until August 20th, when my Verizon contract expires. I didn't want to risk not getting one and having to wait when I was ready to activate. I also like purchasing new Apple products in the excitement of the first day. It was an exciting and fun evening!

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post #36 of 132
Quote:
Originally Posted by SpamSandwich View Post

If AAPL drops to around 137 or 136 just before today's close, I'll probably snag a big handful of shares. It's a good bet the news will be good tomorrow.

Last time this happened, I made 50% on my money in 3 months.

Good or not, will be good enough to make it rise? I think so, but I also have some doubts after today's drop from AT&T's activation announcement.

I have a limit order in for $137 that expires at the end of the day. We'll see what happens.
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post #37 of 132
Quote:
Originally Posted by solipsism View Post

Good or not, will be good enough to make it rise? I think so, but I also have some doubts after today's drop from AT&T's activation announcement.

I have a limit order in for $137 that expires at the end of the day. We'll see what happens.

OTOH, my CPO rose 7% today. Yeeeeaaah, boy!

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post #38 of 132
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Originally Posted by cameronj View Post

So yeah, that's why this is bad news for Apple. Apple has been trading up up up every day in the past 3 months. Ever heard of buy the rumor, sell the news? Well, now you have.

Exactly! Apple's stock usually, if not always, goes down after the hype in the rumor mill is quelled with actual news releases.
post #39 of 132
Doesn't look like AAPL will go lower than 138 today... yet....

Update: Just went to 136 1/2! Guess I bought me some more AAPL!

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post #40 of 132
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Originally Posted by MacTel View Post

Exactly! Apple's stock usually, if not always, goes down after the hype in the rumor mill is quelled with actual news releases.

This solidifies the observation that Gene Munster doesn't know jack. Pretty weak projections on his part.

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