Estimates put iPhone sales at over 500,000
Device sold out in most stores by Monday afternoon
P-I STAFF AND NEWS SERVICES
Apple Inc.'s initial iPhone sales may have beat analysts' top projections, suggesting Chief Executive Steve Jobs will reach his goal of making mobile phones as profitable for the company as computers and the iPod.
Shoppers may have bought as many as 700,000 units over the weekend, Goldman Sachs Inc. analyst David Bailey said, twice his projection of 350,000. Piper Jaffray's Gene Munster pegged sales at about 500,000, more than twice his original 200,000 estimate.
Nationwide, the phone sold out in most Apple and AT&T stores by Monday afternoon, AT&T spokesman Michael Coe said. He declined to release specific sales figures.
All four Apple stores in the Seattle region said they were out of iPhones as of Monday afternoon. Calls made by the Seattle P-I to the area's AT&T stores turned up a single iPhone in stock as of 5 p.m. Monday -- a 4 gigabyte model at an AT&T store in the Southcenter Mall area.
The launch "exceeded our expectations in a lot of ways," said Elina Galkins, AT&T marketing director for the Northwest. Galkins said supplies will be replenished on a regular basis, and consumers can order iPhones in AT&T stores to be shipped directly to their homes. Apple says it will post information about supplies at individual stores each night at apple.com/retail/iphone.
Coe added that most of the activation problems that surfaced over the weekend had been resolved. Some iPhone buyers had trouble switching over to AT&T from their previous wireless carrier, delays that AT&T blamed on overloaded servers, a problem with the company's credit authorization system and problems transferring customers' business accounts to consumer accounts.
"The issue is essentially behind us now," he said.
Piper Jaffray's Munster, based in East Palo Alto, Calif., called it "a very successfully handled launch." He's rated Apple's shares "outperform" since June 2004. "The real sign of success would be what kind of legs this product has in 2008 and 2009. In 2009, we estimate a third of Apple's sales will be from iPhone. This is a huge product."
J.P. Morgan Securities Inc.'s Bill Shope said sales may have reached 312,000 in the days following the device's Friday debut.
American Technology Research analyst Shaw Wu, who called his initial 50,000 estimate conservative, said in a note Monday that Apple may have sold five times as many.
Shares of Cupertino, Calif.-based Apple fell 78 cents to $121.26 Monday in Nasdaq stock market trading. They have gained 42 percent since Jobs unveiled the combination iPod media player and phone Jan. 9.
Mark Siegel, a spokesman for San Antonio-based AT&T, declined to say how many iPhones the company has sold or how many users switched to AT&T, the largest wireless service provider in the U.S., from other providers. AT&T's calling plans for the phone cost $60 to $220 a month.
The iPhone, which costs $499 and $599, sold online for a premium at auction service eBay Inc. The device sold for an average price of $702, with the highest bid at $12,500, according to data Monday from San Jose, Calif.-based eBay.
There's "nothing else quite like" the iPhone, said Michael Gartenberg, an analyst at JupiterResearch in New York. "Most consumers have never seen that kind of functionality."
The iPhone merges capabilities of Apple's iPod with a handset that also serves up Web pages and e-mail, pitting the product against less expensive ones from Nokia Oyj, Samsung Electronics Co., Research In Motion Ltd. and Palm Inc.
Jobs said last week that Apple had boosted manufacturing to meet estimated demand. "We've taken our best guess, but it wouldn't surprise me at all if it ain't enough," Jobs, 52, said in an interview with The Wall Street Journal.
Under his leadership, Apple's annual profit has surged to almost $2 billion from $65 million in the past five years, while sales more than tripled to about $20 billion.
Jobs says he aims to sell 10 million of the phones in 2008, capturing 1 percent of the global market for handsets. He expects consumers will buy 1 billion mobile phones next year, which would be almost four times the number of personal computers sold.
Apple may top that 10 million forecast, especially after releasing new versions of the iPhone next year, UBS AG analyst Benjamin Reitzes, in New York, said in a report Monday.
The company said it plans to release the iPhone in Europe later this year and in Asia next year.
The enthusiasm of buyers such as Apple co-founder Steve Wozniak may put Jobs well on the way to that goal.
"I was going to only use the iPhone as a test phone at first, but I'm ready now to make it my primary number," said Wozniak, who got in line at 4 a.m. Friday to buy the phone. "I was still a bit negative after a couple of test calls, but then I tried the browser and was shocked at how wonderful it was to have real Web pages."
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