iPhone demand shows significant decline
Now that the iPhone has at last been launched, its success can be judged from its sales figures - and it's not all good news. Despite the huge queues that developed in the rush to be the first with Apple's new uber-phone, demand for the device has tailed off significantly since the hype died down.
According to figures from AT&T (currently the iPhone's only carrier), 146,000 connections were made to new iPhone devices over the weekend that it was sold, which can be extrapolated to approximately 200,000 iPhones sold in its first weekend (not everyone who bought one could connect to the network, hence the discrepancy in the figures).
Although these seem like impressive numbers, analysts were expecting the iPhone to sell over 500,000 units in the same period. And there's more bad news on the horizon...
In a sign that the iPhone could now become a victim of its own hype, CIBC World Markets said demand for the iPhone has shown a "significant decline'" in the past 10 days.
"We have noticed decent inventories at stores, and thin demand at best," analyst Ittai Kidron wrote in a note. "Among the stores we visited, most visitors were not looking at the device, and only a very small subset bought it.'"
In other words, the people in the queues were the hardcore fanboys, and they've already got their hands on their new love. For the rest of us, the iPhone isn't turning out to be the killer device that Apple promised, and the likelihood of Apple shifting 10 million iPhones in its first year, as Steve Jobs predicted, is starting to look optimistic.
Apple can easily counter this trend, though, by extensive marketing and by releasing a new upgraded iPhone with 3G, which according to some reports, it could do as soon as November. This would actually make a lot of sense. The iPhone should always have had 3G right from the start, and it's essential if it's to compete in European and Asian markets.
Releasing version 1.0 of a device that's not quite ready for full market penetration is a classic way of showing the market what you have to offer while testing demand, before hitting the market hard with the new super-improved version 2.0 - it's what Microsoft has been doing since it first shipped DOS!
Realistically, though, no matter how good the iPhone's interface is, it's just unusable as an Internet device without 3G - and the camera's pretty crap, too. So until Apple release a proper version of the iPhone, expect more negative headlines as the backlash from all that hype starts to kick in.
[Source: Bloomberg]
