AT&T: 146,000 Apple iPhones activated in first two days
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.
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.
Comments
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!!!
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.
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.
still, half the 500k figure.
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.
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.
Product = Apple
Activation Service = AT&T
I can understand AT&T stock slipping.
500K - 150K = 350,000 iPhones that people hoped to put on eBay and make a fortune?
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
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.
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.
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!!
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.
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?
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.