Apple's iPhone outsells rivals, but may be falling short of expectations
EVEN SO, IT MAY BE FALLING SHORT OF HIGH EXPECTATIONS
By Troy Wolverton
Mercury News
Article Launched: 09/05/2007 01:38:33 AM PDT
The iPhone is popular - but how popular? And will it live up to all the hype?
Apple's new mobile handset was the top-selling smart-phone in July, its first full month on sale, research firm iSuppli reported Tuesday. The 220,000 iPhones consumers bought that month accounted for 1.8 percent of all cell phones purchased in the United States in July, according to the firm. The iPhone even outsold LG's popular Chocolate handset, which was the top-selling feature phone, a category of handsets such as music phones that typically outsell smart-phones, iSuppli said.
That is a "remarkable accomplishment," iSuppli said.
But not so fast.
Apple sold fewer iPhones in all of July than it did in the first two days that the iPhone was on store shelves. Moreover, the total number of iPhones sold in July was below the pace needed to meet Apple's target of selling 1 million by the end of September, acknowledged Greg Sheppard, iSuppli's chief development officer.
"It's a pretty darn successful product, but (its sales are) probably lower than what everyone else is expecting it to be," Sheppard said.
Apple spokeswoman Natalie Kerris declined to comment on the iSuppli report.
Should the iSuppli data bear out, it would be at least the second indication that iPhone sales, while healthy, are not meeting the hype. The number of iPhones Apple sold in the device's first two days on the market were already below some of the wilder expectations on Wall Street, where forecasts for the first weekend of sales ran as high as 700,000.
Given the error margin in iSuppli's estimate, consumers bought between 200,000 and 240,000 iPhones in July, according to iSuppli's research. At that pace, consumers would buy between 600,000 and 720,000 by the end of Apple's fiscal quarter in September.
Apple predicted it would sell 730,000 iPhones in the quarter. And some analysts, figuring that the company was low-balling its forecast, have set much higher targets for the period. American Technology Research analyst Shaw Wu, for instance, predicted Apple would sell 770,000 this quarter.
To be sure, iSuppli's numbers aren't directly comparable with Apple's. Apple's forecast includes both the iPhones it sells directly to consumers and those it ships to partner AT&T. Even if consumers don't buy 730,000 iPhones in the third quarter, Apple could ostensibly hit its mark by shipping more to retailers to meet the expected uptick in demand in the holiday quarter.
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