commentary Whether 5 million units sold is disappointing or not is irrelevant. The real proof of whether Apple still has its mojo won't come for another few months.
by Roger Cheng Cnet
commentary Apple supporters triumphantly cheered on the company after it sold 5 million iPhones over the weekend. Wall Street, however, was disappointed by the figure after seeing the long lines on Friday.
The correct reaction probably lies somewhere in the middle. Perhaps a polite golf clap?
For analysts, it was a classic case of hype feeding into the estimates, which ramped up to as high as 10 million for the first weekend, numbers that even a powerhouse like Apple couldn't hope to achieve.
"We find it unfortunate that some analysts continue to publish irresponsible estimates without taking into account realistic demand trends and potential supply constraints," said Shaw Wu, an analyst at Sterne Agee.
On the flip side, while 5 million is an impressively high number, and is 1 million better than last year's iPhone 4S launch, it isn't a genuine indicator of the longer-term appeal of the iPhone 5. There was so much pent-up demand that Apple would have sold out of however many phones it had in stock.
The truth behind that first weekend statistic that Apple proudly proclaims is the number isn't really as relevant as you might think. It's a nice figure to boast about, window dressing, and it certainly fuels the hype and illusion that Apple is invincible. But in reality, that's about it.
There are too many factors, including supply issues, the availability of its phones in key markets, and reaction to the competition, to really make a judgment on whether the company's latest phone will suitably carry on the legacy of success that its predecessors enjoyed.
The true test of the phone's longevity in the market won't come until after the key holiday season, when many high-profile smartphones start to see a pullback in sales and the euphoria of the recent iPhone launch hype has long faded away.
Now, any company would kill to sell 5 million units of anything over the weekend, but the iPhone runs at a higher standard. Sales of the iPhone 4 were amazingly resilient, and hung on to the top spot at AT&T for more than a year (it was also helped by its introduction at Verizon Wireless). Conversely, sales of the iPhone 4S had an initial pop, but began to fizzle as the months went on. Yes, it remained a top-selling phone, but its momentum couldn't match the previous iteration.
The iPhone 5 is poised to pick up where the iPhone 4 left off. Despite criticism that it isn't drastically different, the phone addresses the key concerns of iPhone users, namely the larger display and a faster 4G wireless connection. Those two, alongside the thinner and lighter design, may convince consumers that it's worth the upgrade.
Despite the initial disappointment, Wall Street remains as bullish as ever. J.P. Morgan yesterday said it estimates Apple will sell 50 million iPhones in the fourth quarter. For the quarter ending on Saturday, the firm estimates 25 million units will be sold.
Sterne Agee's Wu said the noise over the launch and the following disappointment didn't change his estimate. He still believes the company will sell 27 million this month and 46.5 million in the quarter ending December 31.
While the stock may have sold off yesterday, there remains a lot of optimism around Apple.
by Roger Cheng Cnet
commentary Apple supporters triumphantly cheered on the company after it sold 5 million iPhones over the weekend. Wall Street, however, was disappointed by the figure after seeing the long lines on Friday.
The correct reaction probably lies somewhere in the middle. Perhaps a polite golf clap?
For analysts, it was a classic case of hype feeding into the estimates, which ramped up to as high as 10 million for the first weekend, numbers that even a powerhouse like Apple couldn't hope to achieve.
"We find it unfortunate that some analysts continue to publish irresponsible estimates without taking into account realistic demand trends and potential supply constraints," said Shaw Wu, an analyst at Sterne Agee.
On the flip side, while 5 million is an impressively high number, and is 1 million better than last year's iPhone 4S launch, it isn't a genuine indicator of the longer-term appeal of the iPhone 5. There was so much pent-up demand that Apple would have sold out of however many phones it had in stock.
The truth behind that first weekend statistic that Apple proudly proclaims is the number isn't really as relevant as you might think. It's a nice figure to boast about, window dressing, and it certainly fuels the hype and illusion that Apple is invincible. But in reality, that's about it.
There are too many factors, including supply issues, the availability of its phones in key markets, and reaction to the competition, to really make a judgment on whether the company's latest phone will suitably carry on the legacy of success that its predecessors enjoyed.
The true test of the phone's longevity in the market won't come until after the key holiday season, when many high-profile smartphones start to see a pullback in sales and the euphoria of the recent iPhone launch hype has long faded away.
Now, any company would kill to sell 5 million units of anything over the weekend, but the iPhone runs at a higher standard. Sales of the iPhone 4 were amazingly resilient, and hung on to the top spot at AT&T for more than a year (it was also helped by its introduction at Verizon Wireless). Conversely, sales of the iPhone 4S had an initial pop, but began to fizzle as the months went on. Yes, it remained a top-selling phone, but its momentum couldn't match the previous iteration.
The iPhone 5 is poised to pick up where the iPhone 4 left off. Despite criticism that it isn't drastically different, the phone addresses the key concerns of iPhone users, namely the larger display and a faster 4G wireless connection. Those two, alongside the thinner and lighter design, may convince consumers that it's worth the upgrade.
Despite the initial disappointment, Wall Street remains as bullish as ever. J.P. Morgan yesterday said it estimates Apple will sell 50 million iPhones in the fourth quarter. For the quarter ending on Saturday, the firm estimates 25 million units will be sold.
Sterne Agee's Wu said the noise over the launch and the following disappointment didn't change his estimate. He still believes the company will sell 27 million this month and 46.5 million in the quarter ending December 31.
While the stock may have sold off yesterday, there remains a lot of optimism around Apple.
And we would like to think that this sustainable !!!
