January 29, 2010
"Huge disappointment" after the first days of iPod, iPhone
AT&T said it signed up 146,000 iPhone customers, well below analyst estimates, which ran as high as 500,000 units. Shares of Apple fell more than 6 percent, closing at $134.89, down $8.81 on the day. AT&T’s shares were off less than 1 percent, closing at $39.68, a decline of 35 cents.Posted by amol at January 29, 2010 3:09 PMAT&T has an exclusive deal with Apple to provide wireless service for the iPhone, the combination digital music player, cellular phone and Internet device. The phone went on sale on June 29, two days before the quarter ended, amid fanfare surpassed only by the release of the final “Harry Potter” book last week.
The number could also reflect the difficulty many iPhone customers reported experiencing when they tried to activate their phones during the first few days, analysts said.
Richard G. Lindner, AT&T’s chief financial officer, described demand for the iPhone as “strong,” and said that iPhone subscribers tend to buy more expensive rate plans than other wireless customers.
Eugene Munster, an Apple analyst with Piper Jaffray, said iPhone sales were largely in line with analysts’ earliest targets, but as public excitement grew so did investor expectations. “Our belief all along has been that there is a surge of demand coming for the iPhone, but it is hard to predict when that surge will hit,” he said.
Mr. Munster compared the iPhone launch to that of the iPod, which was viewed a huge disappointment at the end of its first quarter on the market. Apple sold 4.6 million units during the last quarter of 2004, while Wall Street had expected 8 million. Mr. Munster said the iPhone would probably show a similar gradual ramp up, surging in 2009.
