Verizon iPhone 4 launch healthy, not "blowout"

Posted:
in iPhone edited January 2014
First day retail store sales of the Verizon iPhone 4 were reported to be an indication of healthy but not "blowout" demand, with most stores still reporting inventory towards the end of the day.



According to a note from RBC analyst Mike Abramsky, checks with 40 different Verizon retail stores in New York, Chicago, Boston, Los Angeles, Miami and other cities showed no signs of "stockouts," while the number of people waiting in line "appeared smaller than those for the AT&T iPhone 4 last year, but demand was steady though the day."



Abramsky added, "positively, some stores we spoke to indicated they may stock out by end of the day."



The note said it would be important "to monitor sell-through next few days (and weekend) to see if demand is spread over several days vs. concentrated to the first day" and to see whether Apple is "still on track for our 1M Verizon iPhone first week estimate."



In laughably short lines, the joke is on you



The reported lack of long lines for the Verizon iPhone 4 was blamed for a rapid but minor selloff in the company's stock, as bloggers like Dan Frommer of Silicon Alley Insider remarked that lines were "laughably short."



However, the number of people forced to wait long lines at retail stores was likely reduced by a successful round of pre-orders, which didn't occur in conjunction with the AT&T iPhone 4 launch last summer. When pre-orders failed along with an overwhelmed eligibility server, vast numbers of people interested in AT&T's iPhone 4 made retail store reservations instead, appearing at the special "first day event" which Apple actively converged its customers toward, creating a news story of demand success that was really a picture of operational failure.



The result was laughably long lines on the initial launch day. Lines also moved rather slowly because Apple forced each buyer to sit through a sales pitch for MobileMe and AppleCare while also providing hands-on assistance with setting up the phone. Had Apple's pre-order system worked correctly, and had the company executed a more efficient handling of the crowds that resulted, there would have been no need for long lines, just as there are no lines for Nokia phones despite the company selling, by far, the most phones worldwide.



At the same time, many customers simply walked into AT&T's nearly empty retail outlets and made iPhone 4 purchases without waiting at all, or showed up a day or two later to avoid the media circus revolving around Apple's own retail store launch. The presence of long lines has little correspondence with the overall demand expressed.



That makes looking at the length of lines in front of some retail outlets a fairly poor indicator of how many units are actually being sold, and a better indicator of how poorly the company is managing to supply whatever demand that does exist. Similarly, while the initial production shortages that dogged each new iPhone release dramatized the voracious demand for each new model, it would be even better for Apple to be able to build enough to meet demand.



Can Apple build enough?



A previous report indicated that Apple had produced an initial supply of 2 million CDMA iPhones, some proportion of which it allocated for Verizon's pre-orders.



Abramsky's report added, "note that Apple is delaying [online] Verizon iPhone shipments until Feb 18, possibly indicating stronger than expected pre-order demand."



If Apple allowed pre-orders to exceed the initial allocation, it would make sense that launch day orders would be delayed an additional week or two until the company can produce more and ship them to the US. Had the company simply shut down pre-orders early, it could have pushed more inventory into a small number of stores and generated another "long lines" story for the media instead.



It appears that iPhone launches increasingly don't require such publicity anymore, making more sense that Apple instead work to take as many pre-orders as it can, stock as many retail outlets as possible, and leave the waiting for online orders to ensure that every last phone it can produce will be sold as quickly and as efficiently as possible.
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Comments

  • Reply 1 of 45
    I think with it being cold outside, most people that wanted it, pre-ordered online.

    There are Many other factors this VZW launch isn't going to be the "blowout" some thought it might be.

    Most people who really wanted an iPhone, already has it on AT&T.

    AT&T knew this was going to happen and locked in A LOT of people with early upgrades, unless people want to part ways with large ETF fee's, they are staying with AT&T.

    There are always those who complain about AT&T, but there are people like me who Love AT&T.

    Most who wanted unlimited Data on AT&T simply just never went to the 2G Data pro $25 plan. Grandfathered plans aren't taken away, you have to give them up willingly.

    With Android releasing a new device every 4 days, VZW likely had Many of the VZW folks also locked down, unable to upgrade.

    Then, Apple fans already know iPhone 5 will be out in 4-5 months. I wouldn't lock my contract up today knowing I can wait a little longer and get the latest device.

    I still think the phone is going to sell well even with all the above taken into consideration.
  • Reply 2 of 45
    Does the hype of the long lines etc add to or drive a public mentality to get an iPhone? Thus when it(the hype / expectation) doesn't happen, the 'herd' thinks- meh... must not be that great a devise. IMO there is a smigeon of truth, but what really 'drives the herd' is a damn good iPhone.
  • Reply 3 of 45
    richlrichl Posts: 2,213member
    It's a six-month old product. What did people expect? If you're desperate enough to queue, you're probably desperate enough to use AT&T.



    I'm sure that there will be long queues when the iPhone 5 is released with CDMA support.
  • Reply 4 of 45
    That's really good news for all verizon users!!..



    http://infowick.com/services/seo/
  • Reply 5 of 45
    Good save, DED.
  • Reply 6 of 45
    Coming from appleinsider, a headline like "healthy" must mean the launch was an utter failure
  • Reply 7 of 45
    I feel like Apple's approach to the Verizon iPhone was entirely different then their normal marketing ways (no steve jobs to introduce the "Verizon iPhone"!!??). I imagine the demand will show much greater volume during the next full version release of the iPhone.
  • Reply 8 of 45
    bageljoeybageljoey Posts: 1,734member
    Quote:
    Originally Posted by nvidia2008 View Post


    Good save, DED.



    The next important thing is to remember this article when the iPhone5 comes out and avoid an article about the long lines and amazing demand...
  • Reply 9 of 45
    slurpyslurpy Posts: 5,028member
    "while the number of people waiting in line "appeared smaller than those for the AT&T iPhone 4 last year, but demand was steady though the day."



    Really? You mean lines 8 months after the lunch of the phone appeared smaller than those at launch? And with a new iPhone on the horizon? Absolutely shocking news. I'm glad this was reported by RBC, as I would absolutely not have come to this obvious assumption.



    Wow.
  • Reply 10 of 45
    slurpyslurpy Posts: 5,028member
    Quote:
    Originally Posted by bkcrowl View Post


    I feel like Apple's approach to the Verizon iPhone was entirely different then their normal marketing ways (no steve jobs to introduce the "Verizon iPhone"!!??). I imagine the demand will show much greater volume during the next full version release of the iPhone.



    Uh, it wasn't abnormal, it was logical. What the hell would Steve Jobs say on stage while introducing it? This is the iPhone 4 I revealed 8 months ago and.... it rus on Verizon!



    That doesn't sound like a presentation Jobs would make, or one that anyone wouldn't want to watch. They handled it exactly as they should.
  • Reply 11 of 45
    Quote:
    Originally Posted by Slurpy View Post


    "while the number of people waiting in line "appeared smaller than those for the AT&T iPhone 4 last year, but demand was steady though the day."



    Really? You mean lines 8 months after the lunch of the phone appeared smaller than those at launch? And with a new iPhone on the horizon? Absolutely shocking news. I'm glad this was reported by RBC, as I would absolutely not have come to this obvious assumption.



    Wow.



    yes but there's been months of sabre rattling on how this was going to completely kill all other competition. Now, it's oh wait til the iphone 5 comes out. whatever.



    several companies are really strong, microsofts had it's ass kicked rightfully, and the competition, being really fierce, means we get great phones, in whatever OS flavour you prefer.
  • Reply 12 of 45
    matrix07matrix07 Posts: 1,993member
    I thnk it is amazing that there is a line at all. When Nexus-S sell on another carrier 6 months from now, will there be lines? I don't think so.
  • Reply 13 of 45
    Quote:
    Originally Posted by Slurpy View Post


    Really? You mean lines 8 months after the lunch of the phone appeared smaller than those at launch? And with a new iPhone on the horizon? Absolutely shocking news. I'm glad this was reported by RBC, as I would absolutely not have come to this obvious assumption.

    Wow.



    More likely because of all the new Android phones with 4G, dual core, beautiful OLED screens, etc. that are mere weeks away. I bet a lot of people will go into a Verizon store for an iPhone and end up walking out with an Android phone. Not only will they be more powerful and lower priced, but it's in Verizon's interest to push Android versus iPhone because they have more control. That might have been part of Verizon's strategy from the beginning. Carry the iPhone to get them in the door, but then try to sell them Android whenever possible.
  • Reply 14 of 45
    hill60hill60 Posts: 6,989member
    Quote:
    Originally Posted by Groovetube View Post


    several companies are really strong, microsofts had it's ass kicked rightfully, and the competition, being really fierce, means we get great phones, in whatever OS flavour you prefer.



    Microsoft just announced a partnership with Nokia.
  • Reply 15 of 45
    Quote:
    Originally Posted by Meurglys View Post


    More likely because of all the new Android phones with 4G, dual core, beautiful OLED screens, etc. that are mere weeks away. I bet a lot of people will go into a Verizon store for an iPhone and end up walking out with an Android phone. Not only will they be more powerful and lower priced, but it's in Verizon's interest to push Android versus iPhone because they have more control. That might have been part of Verizon's strategy from the beginning. Carry the iPhone to get them in the door, but then try to sell them Android whenever possible.



    You make a very, very good point ... and every reason why I'll stick with my iPhone on AT&T.
  • Reply 16 of 45
    Verizon will start new campaign:

    Buy iPhone, get Android for free.
  • Reply 17 of 45
    Quote:
    Originally Posted by hill60 View Post


    Microsoft just announced a partnership with Nokia.



    that's interesting, but I can't say I'm surprised. Symbian blew pretty badly. Such a huge phone company and a crappy eco system.



    What I've seen of win7 mobile, I like that it didn't just use the same icon homepage thing both iOS and android uses. As long as there are no disasters with win7 mobile, I predict that one to be the sleeper. Give it a year or so. It'll carve out some numbers from all of the other 3.
  • Reply 18 of 45
    lilgto64lilgto64 Posts: 1,147member
    With so many folks apparently ready to switch from AT&T to Verizon - when can I get a used iPhone 4/AT&T for cheap to give to my son to use as an iPod Touch? then again, perhaps a lot of early switchers will be those who still have iPhone 3G and 3GS who waited for the iPhone 4/Verizon to switch.



    Or maybe I just wait for iPhone 5 and then give him my iPhone 4.



    And what is up with folks no eBay listing items for $20 plus $550 shipping?
  • Reply 19 of 45
    tbelltbell Posts: 3,146member
    The stock comment is silly. The whole market sold off yesterday. Apple's stock just had a fabulous run up. The inquiry regarding lines is silly. First, it was a snow day in some parts of the country. Who is going to brave very brutal weather just to be one of the first to own the phone. Some people I am sure, but not many. Second, Apple was targeting the iPhone largely to Verizon customers. Apple isn't trying to get people to switch from AT&T. Verizon isn't giving incentives to switch to the iPhone early, so Verizon customers are tied into their current contracts. This never applied to AT&T. Most people upgraded their iPhones because 1) AT&T gave incentives to upgrade, and 2) people the contracts expired about the time the new phones came out. Third, maybe Verizon customers are smarter. Why go to a store, when you can have the phone delivered right to you?
  • Reply 20 of 45
    "What do I use my smartphone for?"



    Phone calls.....then Verizon is best.

    Apps/Internet....then AT&T is best.
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