“Missing” iPhones are actually good for Apple
By Will Park on Monday, February 4th, 2008 at 4:00 PM PST In Apple, iPhone
We’ve neglected from giving any credibility to iPhone naysayers that are jumping with glee and laughing giddily at Apple (NSDQ: AAPL)’s alleged mis-reporting of iPhone sales figures. There have been reports of late that Apple’s iPhone sales figures were off by almost 1 million units. Apple’s 4 million unit sales figure for the iPhone is by no means an incredible number on the global scale. It’s actually quite small compared to other handsets from other manufacturers. But, the thing to remember is, again, Apple’s iPhone is their first ever phone – and they’re not even a mobile phone manufacturer (or at least they weren’t). Success on this sort of sales-level is impressive no matter how you slice it. Anyway, we digress.
There has been some talk about how Apple’s figures for iPhone sales are discrepant from actual iPhone activations, leading some to believe that upwards of 1 million (actually, the number is more widely believe that the figure is closer to 400-500k) iPhones are still “in channel” (waiting to be sold/activated). That would mean that Apple didn’t really sell 4 million iPhones, they just distributed them. Oh no! The horror, Apple didn’t really sell that many iPhones – what a failure!
On the contrary, Apple has sold as many iPhones as they say they have, they’ve already made the profit on the handset (since then handset is not subsidized by any carrier). Whether or not the “missing” iPhones in question will be activated through official carriers is not an issue. In reality, most of those “missing” iPhones have likely been unlocked and are enjoying a non-AT&T (NYSE: T)-tethered life. So, Apple has sold as many iPhones as they claim, they’re just missing out on the icing-on-the-iPhone-cake (which no other manufacturer gets anyway) – which is to say, Apple won’t get revenue kickbacks from locked iPhones.
So, how is this good for Apple? Well, think about it. All these hundreds of thousands of iPhones are being unlocked for use in China, India, Australia, what-have-you, which indicates a huge demand for the iconic handset in as-yet un-released markets. Having more unlocked iPhones out there might mean that Apple doesn’t get any revenue kickbacks, but they (1) already make money on the handset itself, (2) get the benefit of user-generate hype in un-released markets, and (3) contribute to sales-figures that so many people love to hate on.
We can’t wait to see what kind of fury the next-gen iPhone will spur.
1. The incinuation was that apple hadnt sold as many phones as the specifically stated – ie distrorted the facts. 2. People dont hate the iphone as much as the incessant irritating hype over it!
Ah, Will…
It’s good that you’ve finally come out the closet and admitted that you’re an Apple fanboy. The only other explanation for your piss poor journalism is that you just haven’t a clue what you’re talking about.
As for nay sayers, it was never about that. It’s just those of us with an understanding of the European phone market – which you, sadly, do not have – realised that it was never going to be more than a niche product so when you started posting comical entries praising O2 for sales they hadn’t actually made we just called shenanigans.
If you want to be taken a bit more seriously I suggest you do a bit more research rather than just copying other peoples’ articles and putting an overly positive spin on them. Otherwise you’re just going to keep looking a bit silly when all is said and done.
Actually, the insinuation you mention was based on the discrepancy between sales figures and iPhone activations. Apple sold their iPhones, the fact that many units were unlocked and thus un-activated (as far as Apple and their partner-carriers are aware of) is irrelevant.
My mistake, I’m getting tired of the iPhone hype myself (if you can believe that), but it’s hard to not talk about a device that keeps beating pessimistic outlooks on sales performance.
Mark, I appreciate your “understanding” that the iPhone is a niche product. No one ever said that it would be more than that. Not even myself.
I find it interesting that people love to bash positive spin on the iPhone. The positive spin that you hate so much is just a result of the impressive performance of the iPhone in such a short period of time – given it’s the first-ever handset from Apple.
And, since the iPhone is such a niche product, as you say yourself, these sales figures are quite astounding (Apple’s overall sales-figures, not those O2 sales figures that you hate so much). As a mass-market product, the iPhone’s sales figures are dismal, there’s no argument there – Nokia pisses 4 million handsets before breakfast, LG swiftly passed that mark a long time ago with their Shine. The difference? They have all been in the cellphone game for quite some time.
The issue at hand is that many so-called enthusiasts find it easier to bash products that they aren’t comfortable with. Hell, I was even averse to positive Nokia spin at first. But, as a true enthusiast, I appreciate the positives of all products, while keeping an eye out for the negatives. I’ve come to become a Nokia owner. I’ve always loved Windows Mobile (although its getting harder these days). Sony Ericsson is growing on me. But when I talk about Apple in a positive light, people get their panties in a bunch.
Thank you, I AM an Apple fan-boy. I am a Nokia fan-boy, I am a BMW fan-boy. I am an IWC fan-boy. I am a Canon fan-boy. I consider myself a true enthusiasts – and fan-boy carries a positive connotation for me.
I cannot think of any other company that simply announces a product, any product, good or bad and gets the media/bloggers all in a frenzy with speculation, critiques, doomsday predictions. This hype feeds upon itself and is largely propagated by the same media and bloggers. Apple must be saving a ton money in advertising.
Can we just ignore them for a while? Let them do some of the work. No wait… how do we make a living then? Well, just ignore me.
will – the iphone isnt beating its forcasts at all, analysts were predicting far higher sales which just havent transpired. I dont understand your defensive response! Of course it hasnt sold badly, of course it isnt a bad product (its a v good product actually, just one that I find there are better alternative for my needs) but why do you continually defend, big up the sales and seemingly fail to see any fault in it? I understand you like all technology but cant you see you are part of the non stop hype?
Just re read your article – “Success on this sort of sales-level is impressive no matter how you slice it. Anyway, we digress.” That type of comment is incendiary (intentionally so? More comments = more hits?) and pretty ridiculous – it just undermines intomobiles credibility. I do like a fair few of your posts Will just not the ones like this, you need to get off your high iphone horse!
Sad to say they are more Apple bashers than before. Every product Apple introduces are nit picked but MS fanboys turn a blind eye to MS related products.
Let us buy and use whatever we like and stop the hate mails.
AdamC – Where is the bashing of Apple? Please point out 1 negative comment in this post about Apple. Every comment is about the hype surrounding the iphone and how it is reported. Why are people who love apple products so damn defensive (pointlessly so)!
I’ve never seen any fault with the iPhone? There are numerous posts on here that refer to specific problems and faults with the iPhone – and I have lamented some of those problems time and time again. The iPhone is flawed, any other phone would be getting the nastiest of comments from me. So, why am I such a “fan-boy”?
Consider this…the iPhone is able to attract this much attention while still being flawed. That is a testament to how much a user interface and user experience matters in this changing mobile environment. I’ve previously mentioned that the user experience will determine a mobile handset’s future worth, and I stand by that. I love the iPhone despite its numerous faults because of the user experience that it delivers. There’s nothing like it on market.
Success of that sales level IS impressive. That is my opinion but that doesn’t make it untrue. For a niche device from a company with NO experience in the mobile space, these sales figures are impressive. I don’t make statements like that to fuel comments (although I rather enjoy these back-and-forths). I can’t think of another niche device that is as successful as the iPhone.
I bet if I said that the HTC Kaiser/Nokia N95/SE P1i is THE BEST smartphone ever, there would be no credibility issues pulled into the argument.
Sidebar: To which analysts are you referring? The 5 million unit mark was a rumor. Other analysts predicted 3 million by end of 2007.
“Why …so damn defensive”
Because the other side of this argument is so negative. There are two sides to this coin my friend.
You are one side, I am the other. Without you my position wouldn’t exist, and neither your without mine.
Will i’ll respond to the last comment you made as I have to hit the sack, but will get back to you tomorrow on the other.
If you look at my comments you will see I am not negative about the iphone, I am negative about the hype and the continual bigging up of all things iphone. I considered buying the iphone, and I’ll certainly have a long think about the iphone 2. I welcome the iphone and a lot of things that it has brought to the table (only a fool would disagree with this). Let me get this straight I am not an anti apple or iphone person (I have had an ipod since the 2nd gen ipods and use a mac at work!) I am not your ‘Yang’ at all. Just consider what people are saying – perhaps people are making some negative comments in some (not all) of your iphone related posts for valid reasons, not for ‘anti iphone or apple’ reasons.
Can’t we get back to more serious matters, like inappropriate ring tones?
Chris, I hear you 100%, if I came off sounding like I was attacking you for being the “yang” then I apologize – that was not my intent. I was just trying to explain my position. I guess I let Mark offend me with his “piss poor” comment.
I always listen to both sides of the argument, and I agree that iPhone hype is getting old. I have said that many times, by the way. However, it’s hard to NOT hype the iPhone when any iPhone-related post with a positive spin is called “hype.”
And I agree that many negative comments are pointing out the constructive negatives – things that need to change. But hey, I love the iPhone
There are 2 major reasons people diss the iPhone nearly all Europeans that diss the iPhone can be found in one of these 2 groups.
1. They can’t afford an iPhone and the contract (or don’t have a credit rating to get a contract)
2 They can’t afford a Mac so they therefore buy a PC and hate all things Apple
Disposable income in the US is greatly larger than in the EU thus we tend to be will to pay more for things we desire but don’t necessarily need. Remember Mark they said the iPod was an overpriced niche item also.
You know a few weeks before the iPhone was due to be released for sale a journalist friend of mind remarked that the iPhone was all hype and that in fact Apple was all about hype and nothing else. My reply to him was to wait and see how the market responded to it and that the proof was in seeing how successful and how sustained the success was to be.
Now over six months after the iPhone was released for sale, no one can deny that it is certainly a success for a first time mobile phone manufacturer. And looking at the number of people wiling to pay full price for an unsubsidised phone just so that they can render the warranty void in order to use it is really incredible. And on top of that to use it on unsupported networks in unsupported countries really make you look at the iPhone in wonder. I don’t think that many other phones out there have this kind of customer base.
So sure there’s lots of hype surrounding the iPhone but I would really keep a close watch on that discrepancy in activation numbers. Cos if the iPhone lives up to and beyond the hype I would not be surprised if this discrepancy balloons in the coming months.
You know…. you can fool some of the people all of the time and all of the people some of the time but you can’t fool all of the people all of the time……
kirasaw – you are rather a misguided soul!