Thursday, July 26, 2007


...oh, like this posting won't generate a crap-storm in my inbox.

So - turns out, analyst's initial predictions of 500,000 - 1 million iPhones sold in the first 2 days was a little off. Um, by several hundred percent. AT&T earnings figures released yesterday show iPhone activations at 150,000. The stock market responded by slapping both Apple and AT&T in the ass. (Apple down 6% to a still impressive $134.89/share, and AT&T down a percentage point to $39.68.)

Now, I'm not slamming Apple's marketing and construction of a great consumer product here (although not subsidizing the phone was a ridiculous thing to do), I am - again - pointing out their naivety in dealing with carriers. Getting in bed with AT&Tingular and forcing users to get on a 2 year, expensive contract with a specific carrier on top of the $600 you are asking them to shill out for a phone (which, by the way, is not supported by a great number of businesses - so you can't even get your workplace to defray the cost), was a silly leap of faith of the consumer market.

Steve has shown this sort of "leap of faith" before. Remember the NeXT Cube? (Remember, I'm 900 years old.) Steve decided to market this machine only to colleges and universities. His rationale? "Have you seen the budget for the University of Michigan?" he asked at a press conference. "That isn't a university, its a fortune 500 company!" Uh, Steve? Have you been to, like, the architecture department at the University of Michigan? They have, like, $500.

NeXT cube: great product, bad leap of faith.

To be fair - and, actually, I don't remember seeing this mentioned anywhere else... those activations were in last quarter (Q2) - with all the activation problems maybe the missing 350,000 subs activated after July 1 (Q3).

Well...we'll know in a few months. In the meantime, run out and buy your Harry Potter book, since that took the spotlight off the iPhone. You only have a few days before the Simpsons' movie takes the spotlight off of Harry...

1 comment:

Anonymous said...

Hi Rob,

270,000 activated in the first 2 days sold, which was a weekend.

They're probably up to 500K by now, easily.

And remember, it was some analyst who pulled that number out of their ass, not anyone from Apple, who apparently has learned that the less you say the more people listen.

They don't care, really, if business users don't want to buy their phone because the pointy headed IT director will support it when the CEO tells him to. And he will, eventually.

Apple is in this for the long-haul, my friend. They just kicked every other handset makers ass with a phone that is pretty spectacular when compared with what is out there.

I wonder how Nokia, Moto, and Samsung will respond. *Can* they respond? Apple spent a fortune developing this one model, and the traditional handset OEM has a typically fragmented lineup of phones. Plus, they are completely beholden to carriers for what features they can include. They've got no leverage.

Apple has leverage with the carrier, big time. Yes they had to make concessions (no iChat because it eats into SMS revenue, no ringtones from MP3 for the same reason) but for the most part it seems Apple called the shots. No other OEM will ever get that same treatment, so their phones will continue to suck.

Plus, maybe Nokia cares a tenth as much about user experience as Apple does. Maybe. The others? Their products speak for themselves in that area.

I agree with you that ATT and VZW are loathesome but I think there will be a line of iPhones that are GSM and then they will make the shift to VOIP as soon as there is critical mass in terms of coverage. Google's plans are interesting but they are just plans as of right now.

Sorry to post so long. I should start my own blog, eh?