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Apple to Sell 1 million iPhones before end of 2007?



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Jul 02 2007
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Since Apple Inc.’s (Nasdaq: AAPL, stock) iPhones launch on 29th June, everyone particularly stock investors are trying to estimate the number of the units sold as to gauge the successfulness of the revolutionary gadget.

FinanceTwitter rough estimate was that APPLE iPhone Sales Top US$100 Million on Day-1 based on 203,400 units sold. Today, Reuters reported that Apple Inc. had actually sold 525,000 iPhones at both Apple and AT&T Inc. stores. According to cnet.com, Piper Jaffray also estimated first-weekend sales of the iPhone at about 500,000, beating his original forecast of 200,000.

UBS analyst Ben Reitzes said, “Given strong initial demand, we continue to believe our unit estimates of 950,000 for 2007 and 8.1 million for 2008 could prove conservative.” Bloomberg reported about as many as 200,000 iPhones sold within first 24 hours in stores sales and the figure reached 520,000 by late Sunday after half of Apple’s West Coast stores sold out.

However, JP Morgan analysts Bill Shope, estimates that Apple sold about 312,000 iPhones on Friday and Saturday. He further said “We believe initial demand may have been disappointing, but it’s still early … We don’t believe supply was much better than expected, so demand could be a bit light”

Tear-down specialist Portelligent (how I wish this is part of my job) opened up an iPhone, and estimated that it cost Apple $220 to make, making Apple’s gross margin about 60 percent – high even by Apple’s standards.

Everything seems to be going smooth and according to Steve’s plan except on hiccups whereby some new iPhone owners reported problems activating the device through exclusive carrier AT&T as the rush overwhelmed the company’s servers. AT&T said it was working on fixing issues related to the delays.

Meanwhile Universal Music dropped a bombshell to Apple’s iTunes Store after the record label decided not to renew a long-term sales agreement, a move stemmed from tensions over song pricing and other issues. What a great timing to pressure Steve Jobs.

A check at iPhone availability check site minutes ago shows that iPhones are sold out at Nevada, Utah, Hawaii, and California stores. Washington, Minnesota and Florida stores are on the brink of sold-off as well. Going by the rate of the units sold, Apple could reach the 1 Million units target before even the end of 2007 (maybe end of the week dude), if the momentum is sustainable. So I’m long on Apple stock.

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