Sales of 2 New iPhone 6 Devices Top 10 Million in First Weekend

23/09/2014
Apple’s investors obsess over early iPhone sales like Hollywood producers tracking opening ticket sales for a blockbuster movie.
A big weekend is usually a healthy predictor of consumer demand for the holiday season — not just for Apple, but for the entire consumer electronics industry.
Those Apple watchers can rest easy because the company’s new iPhone 6 and iPhone 6 Plus are no bust. Apple said on Monday that it had sold 10 million units of its new and bigger iPhones over the weekend, up from the nine million iPhones it sold last year in the first weekend of sales for the previous generation of iPhones.
The iPhone is still Apple’s biggest cash cow, accounting for about 70 percent of its profit. So early sales can help predict quarterly or even annual results for the company, based in Cupertino, Calif.

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Now the momentum from the new iPhones’ strong opening weekend is expected to help carry Apple to record sales this holiday quarter. Maynard Um, a senior research analyst for Wells Fargo, predicts Apple will sell about 58 million iPhones in the holiday quarter, up from 51 million in that period a year ago. Toni Sacconaghi, a financial analyst for Sanford C. Bernstein, estimates Apple will sell 55 million to 60 million iPhones in the holiday season.
The weekend iPhone sales, which were a record for Apple, were on the upper end of financial analysts’ predictions, which ranged from 6.5 million to the “low teens” of millions of units.
The early results also reflect consumer demand for bigger phone screens. Both new iPhones have much larger screens than the 4 inches of earlier versions: the iPhone 6’s screen is 4.7 inches diagonal and the 6 Plus is 5.5 inches diagonal.
The only real surprise to some analysts is that Apple held out so long before releasing smartphones that kept pace with large-screen competitors from companies like Samsung Electronics, HTC and Nokia, which have been offering so-called phablets — a blurring of the line between a phone and a tablet computing device — for several years.
“It’s really unusual that a company avoids a hot product category as long as Apple has been avoiding phablets,” said Tero Kuittinen, a managing director for Frank N. Magid Associates, a technology research company. “Every other vendor jumped on the phablet train.”
As is typical with Apple product introductions, some customers stayed up late to order the new iPhones online while others slept in garbage bags outside Apple Stores. But notably, none of them were in China. Apple has delayed the release of the iPhone 6 and 6 Plus there, apparently because the devices have not received approval from Chinese regulators.
IDC, a research company, estimated that at least 20 percent of all smartphones shipped last year in China, the largest smartphone market, were five inches or larger.
“Even without China, Apple was able to move $6.5 billion of product in three days, which would be impressive for any industry,” said Walter Piecyk, managing director at BTIG Research.
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Apple’s share price rose slightly Monday, ending the day up 0.1 percent to $101.06.
Still, some analysts, like Gene Munster of Piper Jaffray, wondered whether first-weekend sales were still a reliable measure of consumer demand. The iPhone is already immensely popular in many countries, he noted before Apple’s weekend results, so early sales may be more of a sign of how many iPhones can initially be produced by Apple and its manufacturing partners.
“The first-weekend iPhone sales number continues to be more about how much Apple can supply than what the demand is in the market,” Mr. Piecyk said.
Timothy D. Cook, chief executive of Apple, said as much on Monday.
“We could have sold many more iPhones with greater supply, and we are working hard to fill orders as quickly as possible,” he said in a statement.
The introduction of the iPhone 6 and 6 Plus was the second time Apple released two new iPhones at the same time. Last year, it introduced the iPhone 5S with the iPhone 5C, a colorful plastic model sold at a lower price.
Apple is not treating the iPhone 5C like past iPhones. Traditionally, Apple has upgraded each iPhone once a year, with improvements like faster chips and better cameras. However, this month, instead of announcing an upgrade for the iPhone 5C, Apple said it would continue to sell the exact same iPhone, but for less: free with a contract.
Analysts say that it appears Apple’s strategy all along for the iPhone 5C was to sell an older, plastic iPhone over a longer period to allow the costs of production and components to drop. That lets Apple decrease the price of the plastic iPhone and increase market share in less affluent markets.
Although Apple is late to the party with bigger phones, Samsung of South Korea could suffer the most. Samsung, the largest handset maker, has relied heavily on larger screens as a selling point for its popular Galaxy smartphones.
Mr. Kuittinen of Magid Associates said that Samsung’s smartphone sales were already slowing before Apple introduced larger iPhones. So this holiday season could look grim for Samsung and other handset makers.
“It’s going to be a very scary Christmas for HTC, Samsung and LG,” he said. “This is really going to be crunch time.”

By:http://www.nytimes.com/2014/09/23/technology/apple-sells-10-million-new-iphones-in-first-weekend.html?smid=tw-nytimes&_r=1

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