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

Posted:
in iPhone edited January 2014
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.
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Comments

  • Reply 1 of 132
    smokeonitsmokeonit Posts: 268member
    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!!!
  • Reply 2 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.
  • Reply 3 of 132
    kolchakkolchak Posts: 1,398member
    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?
  • Reply 4 of 132
    boogabooga Posts: 1,081member
    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.
  • Reply 5 of 132
    My guess is 250k units sold since not all people activated in the minute they got them.



    still, half the 500k figure.
  • Reply 6 of 132
    walshbjwalshbj Posts: 864member
    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.
  • Reply 7 of 132
    solipsismsolipsism Posts: 25,726member
    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.
  • Reply 8 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.
  • Reply 9 of 132
    desarcdesarc Posts: 642member
    500K - 150K = 350,000 iPhones that people hoped to put on eBay and make a fortune?

    i'm laughing at all of them.
  • Reply 10 of 132
    dmwogandmwogan Posts: 36member
    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.



    David

    www.davidwogan.us
  • Reply 11 of 132
    cameronjcameronj Posts: 2,357member
    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.
  • Reply 12 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.
  • Reply 13 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!!
  • Reply 14 of 132
    SpamSandwichSpamSandwich Posts: 33,407member
    The stock will be back up within a week. Not worried.
  • Reply 15 of 132
    gee4orcegee4orce Posts: 165member
    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 !
  • Reply 16 of 132
    pt123pt123 Posts: 696member
    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.
  • Reply 17 of 132
    SpamSandwichSpamSandwich Posts: 33,407member
    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.
  • Reply 18 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.
  • Reply 19 of 132
    SpamSandwichSpamSandwich Posts: 33,407member
    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?
  • Reply 20 of 132
    rolorolo Posts: 686member
    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.
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