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Weekend iPhone 3G S sales impress, but may not hold

updated 11:55 am EDT, Mon June 22, 2009

iPhone 3GS wknd. analysis

Apple's first weekend for the iPhone 3G S was impressive, but it may not foretell future prospects, analysts comment. Maynard Um of UBS observes that the 1 million in units was "likely better than expected," backing survey results from Friday. The analyst continues to call for 4.55 million in iPhone shipments by the end of the June quarter, but says the number "may prove conservative" given launch performance.

In the long run sales are expected slide in favor of the 8GB iPhone 3G, which may be more attractive at $99. Low margins on the phone could affect Apple's profits; a bigger concern is said to be the global recession, which is not only pushing people towards cheaper products, but also deterring them from buying unnecessary goods in the first place. Demand may ultimately be capped by excessive data fees, says Um.

Kaufman Bros.' Shaw Wu meanwhile notes that the 1 million figure is "a bit higher" than the 600,000 he previously predicted, and a good sign considering the threat of recession and a smaller number of launch countries, measured at eight instead of the 21 for the iPhone 3G. The analyst is holding to shipment projections of 3.8 million for the June quarter however, on the basis of checks showing a drawdown in inventory and "customer pause" before the announcement of the 3G S. The company is ultimately expected to thrive because of strategic advantages, such as vertically-integrated product lines.




by MacNN Staff

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Comments

  1. njfuzzy

    Joined: Dec 1969

    +16

    In other words

    The facts proved our previous predictions wrong, so we're coming up with reasons why they will turn out to be right later.

  1. GruvDOne

    Joined: Dec 1969

    +4

    More of the same

    Man, when will thee analysts learn? We've been hearing the same sort of c*** from them in one way or another since the original iPod launch some 9 years ago.

  1. macblue75

    Joined: Dec 1969

    +5

    Duhhhh

    Obviously this guy doesn't understand what's under the hood, the impact of the remaining countries getting the 3G S...and it's clear clueless doesn't understand the value of video. It was so easy to send a clip of me wishing my dad a Happy Father's Day this weekend using the 3G S...and showed the contrast of my sister-in-law who has a 3G and sent him a traditional eCard. I think the video capability and ability to get it out quickly is the stealth killer app for the 3g S....poor clueless, if only his supervisors took into account his performance when doing his annual review.

  1. JulesLt

    Joined: Dec 1969

    +5

    App Store

    I'd wager that the App Store is a significant reason why Apple have been happier to go with a lower margin phone - it's generating significant extra revenue per device, without a cut going to the carriers (or - as with iTMS - most of the money going to the studios and labels).

    And I think we're only seeing the start of that.

    Data fees are definitely capping demand, but that also hits all competing data phones, and eventually competition will kick in. (It happened with 3G dongles - the rates fell by 2/3rd in the space of 3-4 months).

  1. SlimGem

    Joined: Dec 1969

    +9

    Shaw Woohoo!

    "... Shaw Wu meanwhile notes that the 1 million figure is "a bit higher" than the 600,000 he previously predicted ..."

    A bit higher, huh? I guess if you consider 40% "a bit".

  1. rtbarry

    Joined: Dec 1969

    +4

    wu is consistently...

    ...a doosh. always wrong, always making excuses. he's a very consistent analyst.

  1. madla1962

    Joined: Dec 1969

    +4

    a bit higher

    Its even worse than 40%. 1,000,000 is 67% higher than 600,000. I'd be happy if my present salary were a bit higher like that. :)

  1. SlimGem

    Joined: Dec 1969

    +4

    Just a wee bit!

    @ madla1962,

    My bad. But wouldn't it be 60%?

    Anyway, I guess I should become an analyst. I'm about as accurate as most of them.

  1. BDLatimer

    Joined: Dec 1969

    +5

    wee bit math

    @SlimGem: No, actually madla1962 is correct - the estimate was ~600,000, actual was ~1,000,000. Difference is ~400,000 - which, compared to the original estimate, is (400k/600k ==) roughly 67%.[pedantics]I'm actually happy to see a discussion of this type of minor correction NOT devolving into name-calling or the like. Kudos to both of you for pointing out the significant increase (yes, Wu is an idiot for trying to downplay just how far off he was), and being able to post a correction in a civil manner.

  1. ArseneKarl

    Joined: Dec 1969

    +4

    Oh, the analysts...

    OK, I'm just gonna say this:

    Shaw Wu is a shameless idiot.

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