Macworld: Strong iPhone sales boost AT&T ...

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17 Replies Last post: Jul 24, 2007 2:23 PM by MacTel 1 2 Previous Next

MW Forums

12,220 posts since
Aug 2, 2004

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Jul 24, 2007 6:30 AM

Strong iPhone sales boost AT&T earnings

Strong wireless sales, including iPhone, help boost AT&T second-quarter earnings. more

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rjwill246

72 posts since
Jan 14, 2005

1. Jul 24, 2007 9:41 AM

in response to: MW Forums

Re: Strong iPhone sales boost AT&T earnings

"Strong" is an interesting word, given it was only 146,000. That should tank Apple stock right off the get-go today as it is a very low number. It doesn't seem to gibe with what took place that weekend, given the virtual sell-out of iPhones in that 48 hour period... hard to believe that phones were bought and not activated!

We'll have wait and see what Apple says tomorrow.

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oka

25 posts since
Jul 17, 2007

2. Jul 24, 2007 9:42 AM

in response to: rjwill246

Re: Strong iPhone sales boost AT&T earnings

Hm, who could have thought...

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samrod

390 posts since
Aug 31, 2004

3. Jul 24, 2007 10:11 AM

in response to: rjwill246

Re: Strong iPhone sales boost AT&T earnings

Yeah, 146,000 seems low. But it obviously doesn't include iPhones bought online through the Apple Store, failed activation attempts, and customers who, for whatever reason, didn't get a chance to activate their phones (people buying gifts and those selling it on eBay).

I don't understand it.

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danmusician

93 posts since
Aug 11, 2005

4. Jul 24, 2007 10:15 AM

in response to: rjwill246

Re: Strong iPhone sales boost AT&T earnings

It possible that 146,000 is only the number of activations on Friday night? Since the 30th was a Saturday and often not considered a business day, is it possible that activations on Saturday will actually show up on Monday's count when the new quarter is reported?

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rjwill246

72 posts since
Jan 14, 2005

5. Jul 24, 2007 10:18 AM

in response to: MW Forums

Strike one

Okay, first prediction panned out. Now, I really do believe that Apple/ATT sold more than 146,000 phones until closing on Saturday. If that be true, and if Apple is getting $170 per phone sold from ATT, and IF, they are getting an average of $7 per iPhone per month per customer for 24 months from ATT, AND, if it costs Apple about $220 to manufacture the iPhone (previous rumour), then, the iPhone is costing nothing for Apple to manufacture!!! In fact, Apple is making about $120 profit from ATT over the top of COM. (Rumoured ATT subsidy and monthly income) Incredible. Therefore, Apple's sales price is ALL profit with an average selling price of around say $575, given the preference for 8G over 4G, then add ATT's contribution of $120 overall on a 2 year contract (Apple's $220 cost of manufacture taken into account), making Apple a staggering $695 profit...

Profit! This all assumes the ATT subsidy and 2 year monthly income stream to Apple are correct. Regardless, the profit for Apple is mind-boggling and so, once the market digests the numbers, the tank reversal should become a July 4th extravaganza, this coming Thursday!

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Walt_Basil

302 posts since
Sep 26, 2004

6. Jul 24, 2007 10:18 AM

in response to: MW Forums

Re: Strong iPhone sales boost AT&T earnings

I can say that I contributed to those numbers by one iPhone and three separate lines!

Posted on my iPhone btw.

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macFanDave

582 posts since
Mar 4, 2004

7. Jul 24, 2007 10:19 AM

in response to: oka

Re: Strong iPhone sales boost AT&T earnings

Even though I have AT&T for my local wired phone, and am coming to the end of a 2-year Cingular (now AT&T) contract, I am not happy about having to do business with them going forward to get an iPhone.

No one has satisfactorily explained to me why AT&T gets me to sign a two-year deal if I have to pay the full retail price for the iPhone. My Cingular contract involved a steeply discounted Blackberry, so what the heck? If one of you wants to drag out the ol' supply-and-demand thing, then in my case, my demand does not come close to what AT&T and Apple are supplying.

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oka

25 posts since
Jul 17, 2007

8. Jul 24, 2007 10:19 AM

in response to: Walt_Basil

Re: Strong iPhone sales boost AT&T earnings

Quote:<hr />
I can say that I contributed to those numbers by one iPhone and three separate lines!

Posted on my iPhone btw.

<hr />

Hehe, it sounds like you're half AT&Ts profit

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airhead

199 posts since
Oct 25, 2006

9. Jul 24, 2007 10:42 AM

in response to: MW Forums

Re: Strong iPhone sales boost AT&T earnings

146,000 is probably new AT&T activations - and also - I did not activate either of my phones in the first two days.

I was busy.

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KPO'M

1,290 posts since
Nov 29, 2001

10. Jul 24, 2007 10:50 AM

in response to: airhead

Re: Strong iPhone sales boost AT&T earnings

Quote:<hr />
146,000 is probably new AT&T activations - and also - I did not activate either of my phones in the first two days.

I was busy.

<hr />

There were also well-publicized issues with activations. Apple will likely give more reliable raw sales data for the fist two days in its release on Thursday. However, this should put to rest the whole "750,000 to 1 million" rumors that were out there earlier. That said, the real test of iPhone will be in the coming months. Remember, the first iPods sold fairly slowly (by comparison) if nothing more than because they were restricted to Macs at first. It wasn't until about a year after their first release that sales began to take off, and it wasn't until iTunes for Windows and the iTunes Music Store became available that iPod became a staple product for the company.

Note that Apple recognizes revenue from iPhone over the 2 year contract period (not upfront), so it won't immediately hit their reported profits for a while.

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josh_nashville

1 posts since
Jul 24, 2007

11. Jul 24, 2007 10:57 AM

in response to: airhead

Re: Strong iPhone sales boost AT&T earnings

Quote:<hr />
146,000 is probably new AT&T activations - and also - I did not activate either of my phones in the first two days.

I was busy.

<hr />

The 146,000 number includes new and existing customers activating on Friday and Saturday. 40 percent of the devices went to new AT&T subscribers the remaining 60 to current AT&T customers.

Considering Macworld ran a story on July 2 stating "...some Wall Street analysts say that Apple might have sold as many as 700,000 iPhones over the devices opening weekend." I think the headline "Strong iPhone sales boost AT&T earnings" is more than a little bit misleading.

Just look at the drop in Apple's stock price this morning. This sales number is not what investors were hoping for.

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ConstableOdo1

42 posts since
Oct 6, 2006

12. Jul 24, 2007 11:50 AM

in response to: MW Forums

Re: Strong iPhone sales boost AT&T earnings

Still, how does activation numbers closely relate to iPhone sales? Why would investors jump ship on activation numbers? It seems like it should be a buying opportunity. I'm really puzzled how analyst numbers of 250,000 and 500,000 could be so far from 146,000 if they are equating iPhones sold to iPhones activated. I guess I shouldn't pay much mind to any of these figures. I'm only interested in Apple's sales overall boosting the stock price or at least holding it where it is.

146,000 is a good figure for AT&T but a poor figure for Apple, yet Apple is getting a fair amount of money back on AT&T's iPhone sales and contracts. Now I understand why Apple's stock is so volatile. Even bad guesses send the stock reeling.

I might as well brace myself for a shock on July 25th.

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pdmarsh

56 posts since
Feb 27, 2005

13. Jul 24, 2007 12:41 PM

in response to: ConstableOdo1

Re: Strong iPhone sales boost AT&T earnings

Finally a reality check. I also purchased an iPhone that Friday evening, but I won't be activating it until August 20th, when my Verizon contract expires.

This new lower quantity sounds quite believable considering the number of stores selling phones, presumed number of reps handling the sales, number of hours the stores were open, and the like. I could never figure out how they could have handled the half-million number people were throwing around in just a couple of days.

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jdb8167

1,501 posts since
Aug 30, 2004

14. Jul 24, 2007 12:56 PM

in response to: rjwill246

Re: Strong iPhone sales boost AT&T earnings

It really depends on how AT&T is doing the accounting. I bought my iPhone on July 3rd. It wasn't completely activated until the morning of July 5th. I could make outgoing calls but they went out with a caller ID of 555-555-5555.

So, was my iPhone activated on July 3rd, 4th or 5th? When you only have two days for reporting activations in the quarter, this question has a lot of relevance.

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