Tuesday, September 25, 2012

iPhone 5 Sales Top 5Million In Opening Weekend, Major Success Or Minor Flop?

Apple is reporting that sales of the new iPhone 5 have topped the 5 million mark just three days after its launch on September 21 meaning over the course of the weekend the company sold an additional 3 million units over its impressive pre-order opening day sales of 2 million

“Demand for iPhone 5 has been incredible and we are working hard to get an iPhone 5 into the hands of every customer who wants one as quickly as possible,” said Tim Cook, Apple’s CEO. “While we have sold out of our initial supply, stores continue to receive iPhone 5 shipments regularly and customers can continue to order online and receive an estimated delivery date. We appreciate everyone’s patience and are working hard to build enough iPhone 5s for everyone.”

These numbers are fairly impressive and the 5 million mark surpasses the previous record set by the iPhone 4S launch last year, which recorded first day launch sales of 1 million units and total weekend sales of over 4 million units. But one has to question how impressive are these numbers really?

In the past Apple has seen significant increases in the number of sales, and while a million extra units might seem like a lot its no where near the numbers that most people have been predicting. Wall Street analysts such as Piper Jaffray's Gene Munster were looking at 6 million to 10 million units in the first weekend. Munster had said:
We believe that the reported 2 million iPhone 5 pre-order unit number suggests that Apple could sell 6-10 million phones in the launch weekend. We believe Apple will issue a press release on Monday September 24th about launch weekend sales. The mid-point of our weekend sales total would suggest 100% y/y growth from the iPhone 4S launch. We note that iPhone 4S grew 135% y/y in its launch weekend compared to the iPhone 4.
Many analysts and tech writers are calling Apple’s announcement that it sold more than 5 million iPhone 5′s this past weekend a letdown and “disappointing.” So much so that it is being blamed for a selloff of Apple (AAPL) stock that sent share prices down a little more than 3 percent since Monday.

So where does that leave Apple now?

Apple first weekend sales numbers are impressive, however some of the 'magic' has seem to have left Apple. In Q2’12, Samsung sold 50.5 million smartphones, twice as many as Apple and the Android platform is doing nothing but growing. Factor in what looks to be an impressive array of Microsoft Windows 8 phones and we might see Apple's market share slip even a little further in the coming year.

Apple at one point was thought of as the innovation leader, today though Android is innovating faster than iPhone and with multiple devices with several options for hardware, form factors and price range they appear to be placing themselves in the position to take over dominance in the smartphone market.

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