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“Missing” iPhones are actually good for Apple

February 4, 2008 by Will Park - 17 Comments

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Missing iPhones are good for AppleWe’ve neglected from giving any credibility to iPhone naysayers that are jumping with glee and laughing giddily at Apple’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-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.

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