Math on iPhones Just Doesn't Add Up?

Tech Dirt is reporting that recently announced numbers by Apple and AT&T suggest that there is a large gap (1.7 million) between the number of iPhones being sold and those being activated. Taking into account factors like the iPhone launching outside the US and a 20% estimate of people buying the iPhone just for the purposes of unlocking, there are still 700,000 iPhones unaccounted for. "[...] suggesting that they're sitting on store shelves, piling up as unsold inventory. That number suggests at least some gap between perceived demand and actual demand -- while also raising questions about how much effort it will take to eat through that inventory."

Comments

Enough anti-iPhone FUD to choke on...

[illumin8]

This anti-iPhone FUD is pretty crazy. It makes me wonder how many MS shills and bloggers they have on the payroll:

"[...] suggesting that they're sitting on store shelves, piling up as unsold inventory. That number suggests at least some gap between perceived demand and actual demand -- while also raising questions about how much effort it will take to eat through that inventory."

If you knew anything about Wall Street, Apple can't announce sales when they're sitting on store shelves. They can only announce sales when they've been sold to an actual customer.

Surely some small percentage of phones are being unlocked, but did you ever stop to think that maybe the numbers are off because AT&T hasn't reported yet how many iPhone subscribers there are for December/January and there were probably tens of thousands of iPhones purchased as Christmas gifts that sat under a tree and just barely got activated in the last couple of weeks?

Re:Enough anti-iPhone FUD to choke on...

[Sparohok]

Both Sony and Microsoft have a well established, and documented, history of announcing shipped instead of sold numbers!

You can announce whatever you want, the question is what you recognize as revenue. For that you need to ask an accountant.

I'm not an accountant, but here's the basic principle. The important question is who is the customer and when a sale is made. If you sell a product to another company, such as a distributor or retail store, that's revenue, even if it hasn't been sold to their customer. If you ship a product to your own retail store, that's not revenue until it's sold to a customer.

Then you get complexities like, what happens if the distributor has an agreement where they can require you to buy back unsold product? Does that mean the distributor's inventory should also be treated as your own inventory?

That's why there's a genuinely interesting question about how many iPhones have really been sold to customers, and the truth may not be a simple matter of reading quarterly press releases from Apple and AT&T.

Last I checked both are listed on the NYSE. Do MSFT and SNE ring any bells for you?

Actually, MSFT is listed on Nasdaq, Sony is listed in Tokyo. SNE is a secondary listing (American Depository Receipt).

Martin

iPhone service starts at $60

[jevvim]

And requiring a 100 dollar a month contract minimum is an absolute deal killer.

Service plans for the iPhone start at $59.99/mo, which is $39.99 for the voice line and $20 for data. I added another iPhone for my wife for another $20 (data plan).

Click through and find the answer....

[grocer]

Thumbs down on the blog link - the original CNet news story (link) is much more detailed and has this tidbit - Based on the number of "missing" iPhones, each of the 4,400 worldwide iPhone retailers "had more than 150 units of channel inventory at the beginning of this year" which sure sounds like they're counting them F.O.B. from Apple's warehouse door, not when it's actually sold to a consumer.

Only 20% being unlocked?

[Ehsan]

I'm currently working in Dubai, and I know about 20 people who use unlocked iPhones. I also see people with iPhones everywhere I go, as they are sold in all the phone shops here (unlocked, of course). I also know a lot of people in Saudi Arabia and Bahrain who are using them... and the Middle East accounts for one of the highest numbers of mobile users anywhere in the world. So why do they estimate only 20% of iPhones being unlocked? I always thought it was closer to 50%

Don't forget the fees

[enzo_romeo]

Depending on what state you live in, and what ATT can get away with, there are usually some monthly fees on top of your bill. Like the taxes from the local government, and then the fee they charge you to pay the taxes, and whatever else they like to bilk from you. In Seattle my friend is on the $60/mo plan but has an additional $20 in fees from ATT to make it nearly $80/mo for his iPhone.

Still pretty dang expensive for me, even at the lowest rate. I'll sign on when I can get an iPhone for $200 and then pay $40/mo. I take after my dad who should have founded cheapbastard.com.