Fuzzy Math: How many iPhones did Europeans buy?
End-of-year sales figures for Apple's (AAPL) iPhone in Europe are trickling in, but not in any form that can be definitively pieced together.
That latest news comes from Germany, where the head of Deutsche Telekom's T-Mobile division said in an online interview Saturday that it had signed on 70,000 customers in the 11 weeks since the device went on sale. (link)
What's not clear is whether that number represents iPhone sales or iPhone activations — an important distinction in T-Mobile's case because for 2 of those 11 weeks it was required by court order to sell unlocked iPhones. Despite the stiff 999 euro ($1,460) price tag it set for unlocked iPhones, the company reported at the time that "many sold." Assuming those buyers activated their iPhones with other carriers, they cannot be counted as T-Mobile customers.
France Telecom's Orange division, meanwhile, reported in early January that it sold 70,000 iPhones in just four weeks. But Orange did say how many iPhones it had activated — sure to be less than 70,000 because Orange was required by French law to sell unlocked iPhones during the entire period.
O2, the exclusive carrier of the iPhone in the U.K., hasn't issued any sales figures yet, but the Financial Times, citing unnamed "people familiar with the situation," claims sales in the first 8 weeks came in at 190,000. (link)
Four weeks, 8 weeks, 11 weeks. Activated, sold. Locked, unlocked. There's no logical way to sort those number out.
But that hasn't stopped U.S. analysts. When trying last week to unravel the discrepancy between Apple's iPhone sales (3.7 million in 2007) and AT&T's activations (less than 2 million), Bernstein's Toni Sacconaghi and Piper Jaffray's Gene Munster both seem to have toted up those numbers, added a fudge factor, and come up with 350,000. (See The case of the missing iPhones.)
Is 350,000 good or bad? It's hard to tell. O2 said it was "happy" with its sales figures, although they seem to have come in below O2's initial target of 200,000 units. Similarly, France Telecom said its 70,000 sales were well within its target range of 50,000 to 100,000, although as Wired points out, CEO Didier Lombard told Europe 1 radio he hoped to sell 100,000 iPhones before the end of the year, not 50,000 to 100,000. (link)
Deutsche Telekom, perhaps wisely, doesn't seem to have issued any public sales target. What Philipp Humm, head of T-Mobile Germany, did say in that online interview yesterday, according to Reuters, is that "the iPhone is by far the most sold multimedia device in T-Mobile's portfolio."
That I believe.
Of course Apple sold 4 million iPhones, no doubt at all. It is so easy to unlock an iPhone, so people do that. Also, you can only buy iPhone contracts in 4 countries of this world. Apple will be introducing the iPhone in many more countries in 2008. This will accelerate the sales of iPhone, especially if 3G phones are introduced. This will surely happen before Summer.
All these numbers are meaningless. Apple says it sold 4 million – nobody is going to break that number down for you. Apple does not what any number but the 4 million number. WHY? not because of poor sales but because it would give away timing if future countries coming into the iPhone family. Apple will natural push extra units into the existing phone company's channel so that when a new country starts selling the iPhone Apple can ship iPhones there quickly and not short existing sellers.
Fact is, Apple had a blowout quarter with record earnings from record sales. Corporate guidance is lower for the traditionally slower 2nd quarter. SEC reports show that as of Dec,31, 2007, Apple had $18.4 billion in cash in the bank and cash equivalents, and basically no debt. Over the past year, cash accumulated at an average of nearly $8.5 million per DAY, from profits on sales of iPod, iPhone, iMac, and software, and interest income. The iPhone phenomenon is just starting. IPhones are still not sold in most of the countries of the world !
Don't hold your breath for a cash dividend paid by Apple. I think that a major acquisition is more likely.
“Nobody is going to spend that much money on a cell phone.”
- You kidding me. Wait till it gets in India and China. I have sold B/W Ericcson & Motorola phones back in 1995-96 for Rs 50,000+ ($1200+). Phones are like style icon in India. Basic phones in India currently sell for $150-$300 and everybody have to buy them, carriers do not give them for free. Premium Nokia phones sell for $500+. iPhone can easily fetch north of $600 AND @ $600, they will disappear in 1 day.
I am not sure why $400 is expensive for people in the US !
Good column and makes good points toward reality. The real story here is that Apple has been less than perfectly straightforward about its "sales." They could have prevented the predictable guessing about their true sales if they would have been more forthcoming.
I think they are trying to get away fuzzy numbers and now their knickers are in a twist.
FanBoyz can't help this company's market cap, especially when they back in "deny Jobs' options actions" mode.
"The iPhone will never sell".
"Nobody is going to spend that much money on a cell phone."
(Unless you count all the other smart phones priced that high). 
4,000,000 iPhones sold in its first six months.
"Oh yeah, they aren't all activated so there."
Apple posted a record quarter showing a 58% increase in sales over last years record.
"Yeah, but they gave conservative expectations for the next quarter so that must mean iPhone sales are drying up."
Sure they are and Apple has been going out of business any day now for over 20 years now.
AAPL is taking its traditional post-December swoon, made worse by issuing their usual conservative forecast while everyone has recession jitters. But the iPhone's customer satisfaction rate is 90%. It is AT&T's top-selling phone. Other manufacturers are trying to copy it. And the 3G version will be even better and more coveted. All this from a company that never made a cell phone before. The iPhone is right on track, and so is Apple, don't worry about bizarre and groundless allegations that they're falsifying iPhone sales numbers.
So message board yahoos know more about AAPL than professional analysts whose job it is to talk to suppliers and customers and figure these things out. Right. My favorite post is the one claiming that these stories about the attempts to ascertain the real number of iPhones sold are "stock manipulation" and should be considered criminal acts. You people aren't investors, you're gamblers. Stocks don't rise forever, and we don't just take CEO's at their word, especially since the tech bubble and Enron. Get a grip fanboys.
Most of these analysts don't know crap from crisco. There a bunch of talking heads trying to make a name for themselves. I can't figure it out. Why is it that the nay sayers of Apple just love to tear down a company sitting on 15 billion in cash. Where do they think it came from? Certainly not weak sales. No company can have a steller blowout quarter and a line of world changing products every year. However, given the track record of Apple, the best is yet to come. Don't listen to most of thees analysts. If there so great, then why didn't they see this market going down the tubes long ago?
Maybe I can help explain some of those numbers. As you can read on this news article from Valor Economico, economic newspaper from Brazil, even though Apple has not settle so far any partnership with a mobile carrier here the iPhone has been sold unlocked. And it may not be the only country in the world where this is happening. It may not be exactly difference in those numbers but helps explain the picture and where the iPhones sold and not activated are.
I work for a wireless company in the data warehouse group. One reason that sales of phones don't match activations is that activations usually means 'New Customer Activations'. If a person buys an Iphone and was already a customer of AT&T, and then just ESN swapped out their phone this would not count as an activation. The numbers actually sounds correct.
I tend to believe Apple when they say they sold 4,000,000 thus far. They can't lie about sales numbers like that, or else they'll be liable for investor lawsuits. So in fact, Apple probably sold MORE than 4,000,000 phones thus far and are underestimating (as usual).
Finally, it is logical to assume that Apple makes more money when an unlocked phone is sold (due to the price of the unlocked phone being almost 2x as much as the locked phone). So as an Apple investor, I'd rather see more unlocked phone sales.
If people are buying the unlocked phones for 999.00 Euros(almost for $1500.00) then, iPhone is a success.
I love my iPhone purchased and activated June 29th. What a cool tool device. As usual the media that includes analsysts don't have a clue about apple is all about. Steve jobs is a genius that loves making products that are easy too use. At the same time he's trendy oriented , thats so that apple products continue to meet the cool design factor that the x generation looks for.
Aapl is a buy now
I live in Israel where officially you cant buy an iphone but surprisingly
you can see them unlooked with support in Hebrew courtesy of the local crackers all over the place.
Most of them i guess came from apple stores in the US.
If they were only smart enough to unlock the phones, come out with the 3G by July, make them compatible with enterprise/business use. Then and only then THE REAL MONEY WILL FLOW IN. WHEN THIS HAPPPENS, 20 million phones sold in 1 year! Until then, who cares, it will never be enough.
The future. Apple spins off large phone division $$$$$ Aplle spins of huge mobile music division $$$$. Stays hugely succesful computer business. Huge share buyback, huge dividend. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
Nothing's missing. Look at the huge billion dollar cash flow. It doesn't come from booking into 'inventory'. The sales are real and Jobs wouldn't stand up there and say it incorrectly, despite his arrogant and pompous attitude.
If you do NOT KNOW, don't be a NEGATIVE SPECULATOR. Broad public negative speculation should be criminal, especially in a bad market. You HARM "investors" and help traders.
Phil,
Thats two comments of mine you deleted because they fly in the face of your worthless journalism. Get a life!
This discussion about how many iPhones were sold is getting ridiculous. Apple reported its gross sales and that should be good enough for judging the success of iPhone. What this endless, mindless splitting of hairs seems to be about is keeping the jackboot of shortselling firmly implanted on the neck of AAPL. Don't you boys in the pretend media have something better to do with your time?
I bought my iPhone in July, but didn't activate it until December. It made a fantastic iPod, besides I was stuck with Alltel until December. What does it matter how many are activated as long as they sell, unless you count the money Apple makes from the provider of cell service.
1) I'm sure Apple is aware of locked iPhones. They did try to remove a few of those.
2) Because of Apple's exclusive agreements, they not necessarily going to be talking about unlocked iPhones- because this undermines the contract and revenues (for both AT&T and Apple), since they are both getting a piece of the monthly phone plan $$.
It will be interesting to see if Apple can maintain their momentum. I dont think 3G is important right now, but now that the iPhone is going to be a real development platform, the enterprise support should follow soon.
3G before September would be nice though…
O yeah, people who play the stock market will typically buy on the rumor and sell on the news. Part of the issue is that the expectations are so high, anything less means the stocks will decline. Since Apple's fundamentals are so strong, this should only create buying opportunities.