By Scott Moritz - Oct 14, 2011 3:45 AM GMT+0700
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Apple, based in Cupertino, California, said this week that it hit a new sales record of 1 million iPhones sold in the first day. Photographer: Jerome Favre/Bloomberg
Apple Inc. (AAPL)’s newest iPhone sold out for pre-order at AT&T Inc. (T), Verizon Wireless and Sprint Nextel Corp. (S) a day before the device officially goes on sale, according to the carriers’ websites.
Verizon Wireless, the largest U.S. wireless operator, and Sprint, the third-biggest, showed no immediate stock of iPhone 4S 16-gigabyte models for pre-order on their websites. AT&T, the No. 2 carrier, is giving buyers on its site a delivery estimate of three to four weeks, up from one to two days when pre-orders began Oct. 7.
The smartphone is for the first time being made available simultaneously at all three of the largest U.S. carriers, helping to boost appeal amid a weak economy. Positive reviews and signs of robust demand for the device should help increase revenue for the wireless carriers in the years ahead, said Roger Entner, an analyst with Recon Analytics LLC in Boston.
“It looks like another blockbuster launch for Apple, only this time with three carriers,” Entner said in an interview.
Apple, based in Cupertino, California, said this week that it received more than 1 million iPhone pre-orders on the first day, a record. Mike Abramsky, an RBC Capital Markets analyst in Toronto, estimated that 3 million iPhone 4S units were sold on the first weekend.
AT&T closed up 0.4 percent at $29.10 today in New York trading, while Sprint climbed 8.2 percent to $2.78. Verizon Communications Inc. (VZ), majority owner of Verizon Wireless, rose 1 percent to $37.02. Apple rose 1.6 percent to $408.43.
Early Enthusiasm
The early enthusiasm may be misleading, providing an inaccurate indication of longer-term demand, said Tero Kuittinen, an independent wireless-industry analyst.
The iPhone 4S may be somewhat more significant to people who may be shopping for memorabilia following the death last week of Apple founder Steve Jobs, according to Kuittinen. The delay of the new iPhone -- anticipated for release in July based on the timing of past product updates -- may have created a larger pool of people waiting to purchase, Kuittinen said.
Entner estimates that about half of the early 4S buyers are “Apple aficionados” who buy the new iPhone every year, and the other half are a mix of people upgrading from older smartphones and those new to the category.
The iPhone 4S, along with new phones that use Google Inc. (GOOG)’s Android software, should for the first time push the total share of smartphone users to more than half of all U.S. mobile-phone customers, Entner said.
“With this iPhone launch, we will have broken through the 50 percent penetration level,” he said. Smartphone share was 43 percent at the end of September, according to Entner.
While popular smartphones like the iPhone can help subscriber growth, lock customers into two-year contracts and increase data revenue, carriers typically have to subsidize part of the cost -- estimated at $600 each -- to keep prices low enough to attract customers. Smartphones also increase data traffic that can burden wireless networks.
To contact the reporter on this story: Scott Moritz in New York at Smoritz6@bloomberg.net
To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net
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