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Apple Says iPhone Sales Hit 270,000 in First 2 Days

Posted on: Thursday, 26 July 2007, 06:20 CDT

By Jefferson Graham

Apple on Wednesday reported record profit and revenue for its fiscal third quarter on stronger-than-expected iPhone sales.

The company said it sold 270,000 of its new cellphones in the last two days of the quarter and said it is on track to sell 1 million by the end of September.

The 270,000 figure is much higher than the number Apple partner AT&T announced Tuesday. Apple's exclusive carrier for the iPhone said it activated just 146,000 phones during the same period.

So what happened? "We had some activation problems in the first week," Peter Oppenheimer, Apple's chief financial officer, told Wall Street analysts in a conference call.

Many customers complained during iPhone's launch of trying to connect with AT&T to get service started, only to receive numerous error messages or delays. Oppenheimer says the activation issues have been taken care of.

He reiterated Apple's previous prediction that it would sell 10 million iPhones by the end of 2008.

Apple reported revenue of $5.4 billion for the quarter, up from $4.4 billion in the year-ago quarter. Profit was $818 million, or 92 cents a share, up 73%.

Analysts polled by Thomson Financial expected $5.3 billion in revenue and per-share profit of 72 cents.

Apple shares jumped 8% to $148.11 in after-hours trading. They closed at $137.26 in regular trading.

The company said it shipped 9.8 million iPods in the quarter, up 21% from a year ago. Mac shipments rose 33%. Shipments of 1.7 million Macintosh computers were Apple's best ever.

The iPhone sales, at an average price of $585, comes to $157 million, says analyst Gene Munster of Piper Jaffray. But investors won't see all of that reflected in Apple's earnings. The company is spreading iPhone revenue over two years, using "subscription" accounting, and thus added only $5 million to revenue.

Apple did so well with Macs and iPods that "We don't care as much about the iPhone number," said Munster, who had originally predicted sales of 500,000 iPhones in the first two days.

"The expectations have been adequately reset," Munster said.

He said he still believes Apple is on track to sell as many as 45 million iPhones in 2009 and "remake the wireless market." (c) Copyright 2005 USA TODAY, a division of Gannett Co. Inc.

Source: USA TODAY

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