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How Apple Really Set New iPhone Sales Records

How Apple Really Set New iPhone Sales Records
By Jennifer LeClaire

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Concerned about the PR angle of a soft first weekend for sales of the iPhone 5c and iPhone 5s, Apple took some steps to strengthen its numbers. Traditionally users could pre-order new iPhone models. But this year, anyone who wanted a new iPhone 5s or iPhone 5c had to get in line. This upset users, but made for great numbers, said analyst Jeff Kagan.
 


So much for the naysayers. Apple shut their mouths tightly on Monday morning when the company announced it sold a record-breaking 9 million new iPhone 5s and iPhone 5c models just three days after the launch on Sept. 20.

Apple also announced more than 200 million iOS devices are now running version 7 of the mobile operating system. According to the company, that makes it the fastest software upgrade in history.

"This is our best iPhone launch yet -- more than nine million new iPhones sold -- a new record for first weekend sales," said Tim Cook, Apple's CEO. "The demand for the new iPhones has been incredible, and while we've sold out of our initial supply of iPhone 5s, stores continue to receive new iPhone shipments regularly. We appreciate everyone's patience and are working hard to build enough new iPhones for everyone."

Blowing Away Expectations

Apple beat even analyst expectations, which ranged from 5 million to 6 million new iPhones. Apple added two new markets, including China, which helped the cause. China has about 2 billion wireless subscribers, according to Walter Piecyk at BTIG Research, a global equity trading and fund services firm.

Apple is positioning the iPhone 5s as the most forward-thinking smartphone in the world. The iPhone 5s, for example, offers an A7 chip that makes it the world's first smartphone with 64-bit, desktop-class architecture for fast performance. It also offers a new 8-megapixel iSight camera with True Tone flash and introduces Touch ID, a way to securely unlock your phone with just the touch of a finger.

The iPhone 5c features an all-new design, a 4-inch Retina display, an A6 chip, and the 8 megapixel iSight camera. The iPhone 5s comes in gold, silver or space gray, and is available in the U.S. for $199 for the 16GB model and $299 for 32GB model and $399 for the 64GB model. The iPhone 5c comes in blue, green, pink, yellow and white and is available in the U.S. for $99 for the 16GB model and $199 for the 32GB model.

The Story Behind the Story

We asked Jeff Kagan, a wireless industry analyst in Atlanta, for his thoughts on the record-breaking iPhone sales weekend. Although this is great news, he told us, it's important to get a full understanding of what happened.

"Apple was concerned about the public relations angle of a soft first weekend, so they took some steps to strengthen the numbers. Traditionally users could pre-order devices. Not this year," Kagan said. "This year anyone who wanted a new iPhone must get in line. That bolstered the lines and strengthened opening weekend from a PR perspective. This upset users, but made for great numbers."

Kagan said 200 million devices upgrading to the iOS 7 was also remarkable, but that is not the whole story because Apple did not indicate how many users actually like iOS 7 better. The problem is, he said, users cannot simply dial back to iOS 6 if they don't like iOS 7.

"So while Apple had remarkable sales and upgrades, the next question is how many are happier and more satisfied? Either way, this was another stellar first weekend for Apple," he said. "However it's important to recognize there are signs that the smartphone marketplace is getting tougher each year that passes."
 

Tell Us What You Think
Comment:

Name:

perry:

Posted: 2013-09-23 @ 11:37am PT
I am sure Mr. Kagan is one of those who thought Apple would be between 5 and 6 million. Admit your mistake. Man-up and admit they blew estimates out of the water.



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