By Adam Satariano - Oct 17, 2011 9:52 PM GMT+0700
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With iPhone head gear, people await for the opening of Softbanks flagship store in Tokyos Harajuku section as Apples new smartphone, iPhone 4S, goes on sale on October 14, 2011. Photograph: AFLO/Newscom
Customers are seen silhouetted against an advertisement for the Apple Inc. iPhone 4S smartphone in the company's store at Covent Garden in London. Photographer: Matthew Lloyd/Bloomberg
Apple Inc. (AAPL) sold more than 4 million iPhone 4S devices in the first three days after it was introduced, setting a record as customers lined up at stores from Sydney to San Francisco to be first with the new touch- screen handset.
That’s more than double the 1.7 million iPhones sold by Cupertino, California-based Apple last year, during the introduction of the previous model.
Demand for the new device extends Apple’s lead as the top maker of smartphones as it fends off rivals including Samsung Electronics Co. and HTC Corp. that rely on Google Inc. (GOOG)’s Android software. U.S. wireless partners Verizon Wireless, AT&T Inc. (T) and Sprint Nextel Corp. (S) reported high activation rates for the new iPhone, which has new voice-recognition software, a speedier processor and higher-quality camera.
“Higher-than-expected sales may have been the result of availability at Verizon and Sprint in addition to AT&T, broader international distribution, positive reviews, timing of the iPhone 3GS hardware upgrade availability and possible Steve Jobs tribute-related demand,” said Mike Abramsky, an analyst at RBC Capital Markets, in a research note today. He had projected sales of about 3 million units for the debut weekend.
The iPhone 4S went on sale Oct. 14 in the U.S., Australia, Canada, France, Germany, Japan and the U.K., in Apple’s first hardware release since the Oct. 5 death of former Chief Executive Officer Steve Jobs. The company also has debuted iCloud, for wirelessly synchronizing music, pictures and documents across Apple devices, and iOS 5 mobile software.
Lines Worldwide
Customers lined up outside stores in cities including Frankfurt, Tokyo, San Francisco and New York. Apple co-founder Steve Wozniak was among the first to get a handset at the store in Los Gatos, California. With a two-year contract, the iPhone 4S costs $199, $299 or $399, depending on amount of memory.
The stock rose less than a percent to $425.32 at 10:44 a.m. New York time. Expectations for high sales helped push Apple’s shares up 3.3 percent to $422 in U.S. trading on Oct. 14. The shares have risen 31 percent this year before today.
Sales from this weekend won’t be included in Apple’s fourth-quarter results, due to be reported Oct. 18. In the period, profit jumped 62 percent to $6.98 billion on sales of $29.6 billion, according to the average estimate of analysts surveyed by Bloomberg.
‘Apples-to-Apples’
“Based on launch sales, we think 60 percent year-over-year growth for the December 2011 quarter will prove to be conservative,” said Gene Munster, an analyst at Piper Jaffray Cos., in a note to clients today.
The launch figures aren’t “a perfect apples-to-apples comparison” because the 4S model was effectively available for 2.5 days during its debut weekend, while the prior model was only “effectively available” for 1.25 days before the website crashed and inventory was sold out, said Munster, who rates the stock ‘overweight’ with a target price of $422.
For the quarter now underway, Apple may sell more than 27 million iPhones, Abramsky estimated. He said sales for fiscal 2012 may reach 110 million and he rates the stock ‘outperform.’
Apple said more than 25 million customers are already using iOS 5, the new mobile operating system, in the first five days of its release, according to a statement today. More than 20 million customers have signed up for iCloud, a service for storing and accessing content over the Internet.
To contact the reporters on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net;
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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