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AAPL Stock: 98.84 ( -0.34 )

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Analyst: iPhone sales on sharp decline

updated 10:50 am EDT, Wed July 25, 2007

iPhone sales on decline

Following Apple's recent stock slide on the news that fewer iPhones had been activated than expected, analyst Ittai Kidron of CIBC World Markets is claiming that that demand for iPhones appears to have quickly dropped within the last 10 days. "We have noticed decent inventories at stores, and thin demand at best," Kidron says. "In fact, most Apple store visitors were not looking at the device and only a very small subset bought it."

One suggested reason for falling sales is slow data service; while Wi-Fi hotspots enable full broadband speeds, AT&T's mobile EDGE network is viewed as lethargic and a "key shortcoming" of the iPhone, according to Kidron's commentary on a buyer survey. He notes however that Apple may already be working on a solution: channel sources indicate that a phone with 3G service may be ready as soon as the fall, bringing speeds closer to par with ADSL or cable.




by MacNN Staff

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  1. QualleyIV

    Joined: Dec 1969

    0

    Analysts...

    I guess I'm not sure why it is that you would want to get your name in the news if you're very likely to later be proven wrong. I guess these guys are operating under the "any press is good press" theory...

  1. cmoney

    Joined: Dec 1969

    0

    my analysis

    i truly doubt that lack of 3g is a huge reason in why it's not selling (if in fact that's truly the case), just as likely is the possibility that it's just too expensive for most people and that there's a bunch of others who are simply waiting for their contracts at other carriers to expire.

    i'm more interested in seeing what apple's response is to this. if in fact sales are significantly lower than what even apple had expected, we should see some changes. don't forget, apple had set expectations a little more conservatively than analysts saying 1 million sold in first week.

  1. Guest

    Joined: Dec 1969

    0

    3g 3g 3g

    Has anyone actually looked at how few areas of the country actually have access to 3g. I personally can barely even get service, let alone 3g.

    http://www.wireless.att.com/coverageviewer/

  1. Guest

    Joined: Dec 1969

    0

    3g 3g 3g

    Has anyone actually looked at how few areas of the country actually have access to 3g. I personally can barely even get service, let alone 3g.

    http://www.wireless.att.com/coverageviewer/

  1. windsurfer_nyc

    Joined: Dec 1969

    0

    forest for the trees

    I'd rather have slower version of the (nearly) full internet on EDGE than the stripped-down mobile WAP internet running on 3G. I wonder how the buyer survey would have turn out with that consideration....???

    BTW, I've been noticing significant improvements in EDGE signal strength in NYC and especially Long Island in the past week...

  1. schwie

    Joined: Dec 1969

    0

    3G is just as lethargic

    Anyone waiting for DSL or cable-like bandwidth on an iPhone may as well wait until 4G phones are available in 2009 (at the earliest). Until then, EDGE will have to do. 3G has the same horrible latency that 2.5G has, so why get excited about it?

  1. TheSnarkmeister

    Joined: Dec 1969

    0

    The problem...

    The problem certainly has something to do with Edge. It is abysmally slow. Even in the AT&T store that I tested the iPhone in, web pages and YouTube videos wouldn't load due to time outs. I asked why and was told it was because their in-store WiFi wasn't working properly. What? They'd been showing the iPhone using Wifi instead of Edge? That seemed kind of shiny. Then I asked, but shouldn't it revert to Edge if the Wifi isn't available? According to the salesperson it doesn't do that very reliably either because the Edge network can't hold the signal stable enough. Given AT&T's history of poor customer support, it is doubtful that they will spend much time trying to rectify the matter unless Apple sues them, or demands to be released from their contract. It certainly convinced me not to sign any two-year contract, even though the phone itself was hard to put down.

  1. Guest

    Joined: Dec 1969

    0

    edge fine in denver

    Never has an issue switching between the 2 never have time outs either. Faster than dial up. Also the analyst states that nobody was looking at the device. What apple store did he goto? I been to 2 int past couple of days looking for a case for mine and thats all anybody was looking at.

  1. ZinkDifferent

    Joined: Dec 1969

    0

    Life of an analyst...

    ...must be nice being able to shout out all kinds of c***, without any consideration for common sense, facts, or reality -- and still getting paid (well, maybe except for Kevin Yang).

    All this is, is the rest of the pack (the peanut gallery, so to speak), still chiming in to the prior earnings release from AT&T with the 146,000 activations, and regurgitating mindlessly - it's quite clear that none of these guys ever considered flicking the brain's switch to 'on' -- but that, I guess, is why they are working in a cubicle.

    I too wonder what Apple store he investigated, seeing as how the half a dozen Apple stores in my immediate neighborhood, the iPhone displays are constantly packed, and you see a regular amount of customers leaving with 1-2 phones per visit.

    Part of what is holding up many people are existing contract obligations (only hard core iPhone fans broke their contracts during the first week), and the $600 is a barrier of entry, but also just initially (I know many that were put off by the $600, until they realized what it all does - and it takes most normal people about 1 month or so to justify a $600 expense, and allocate the funds).

    Last but not least, there's also the issue of AT&T not supporting business accounts and customers, which is also holding up migrations.

  1. aepple

    Joined: Dec 1969

    0

    RELIABLE SERVICE PROVIDER

    Carrier…carrier…carrier is the heart and soul of any cell phone, not matter what the cell phones capabilities are, and the bottom line is connection. A friend of mine notice his service was better with cingular, since AT&T took over there has been a decline in his service/connections.

    If I was the head of a computer company and was introducing this break through in technology with a iphone, the first thing would make sure of was a overall reliable service provider for connections and speed, I would not want to experiment on behalf of the public with patches, upgrades, and systems.

    Do it and do it right… a reliable phone provider and high speed Internet connections first… bells and whistles come second.

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