Analyst: Hot Cakes, iPhones Don’t Sell Well When Cold

Inventory piling up

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At any given point in time, it’s reasonable to expect that some new iPhones will be on stores’ shelves.  Others may be getting driven to buyers’ houses, and still more may be just sitting there after the final transaction takes places.  But 1.4 million seems too high a number to signal good things for Apple.Analyst: Hot Cakes, iPhones Don't Sell Well When Cold

Still, when Sanford Bernstein’s Toni Sacconaghi compared the number of iPhones sold by Apple to the number activated by AT&T, he found that 1.4 million aren’t accounted for.  Some of those will probably never be activated – blame (or thank) the unlocking trend for that – but 1.4 million is a lot.

As a result, Sacconaghi wrote, "This is negative in two ways: (1) it indicates end-user demand for iPhone is lower than many investors may think based on Apple’s sales figure; and (2) it points to slower iPhone sales in the current quarter, since much of this inventory is likely to be drawn down."

Apple’s stock is down $1.75 so far today, and $44.93 since its opening value on the first day of Macworld.  Given the market’s behavior lately, we’re not going to attribute either of these things to any specific cause.  Yet, even though Philip Elmer-DeWitt quotes several more optimistic analysts, Sacconaghi’s discovery isn’t likely to help matters, and it could tarnish the image of the iPhone by a bit.

Analyst: Hot Cakes, iPhones Don’t Sell Well When Cold
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  • Guest

     These iPhones are already sold by Apple. What’s the beef? Are you saying that the units are stuck in the shelves of third party retailers like Best Buy?

    • Guest

      Apple fans might as well buy the second iPhone just to help the stock come back.

    • Guest

      That’s the way I read it.  My guess is that after the initial flurry the demand has fallen away faster than perhaps the retailers forecast when they placed their orders with Apple. This may partly be due to Apples hyping of the product but may be down to people pulling in their belts after the financial problems besetting the market. HOw much of a knock on effetc this will have to Apples sales as the surplus will have to be taken up before further orders are placed will have to be seen.

  • MacThai

     Maybe you look for the 1.4 million phones to india, china and thailand. Since the iPhone came out last year, they sell like hot cake her in a bangkok at many shops. This are the unaccounted phones that don’t get activated by AT&T because they are hacked…. ANALysts never get it!!!!

  • http://www.docmurdock.com Michael Murdock

    Apple will do just fine. The turn in the stock is not due to Apple not coming through, but due to the same thing that’s driving other things. The economy. As soon as we take our nose out of the Middle East and start fixing things at home, life will be better for all of us.

    Michael Murdock, CEO

  • http://sportfishingasia.com Guest

    I live in Hong Kong and the Philippines.  iPhones are being sold everywhere and not in Apple shops.  It not difficult to see where a very big chunk of that 1.4 million are.  It is very easy to get any cellphone unlocked in Hong Kong or the Philippines. 

    The only reason I haven’t yet bought at least 5 for various people is because I can’t find out for sure what features will work in Asia and what will not work.

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