Apple's IPhone 4S could estimate 4 Million units This Weekend
Oct. 14 (Bloomberg) -- Apple Inc. is
poised to sell as many as 4 million units of
its new iPhone 4S this weekend as
customers around the world clamor for
one of the last products developed under
Steve Jobs.
The device, available today in the U.S.,
Australia, Canada, France, Germany,
Japan and U.K., is projected to
outperform last year's introduction of the
iPhone 4, which topped 1.7 million units
in its introductory weekend. For the
iPhone 4S, most estimates range from 2
million to 3 million, with Yankee Group
analyst Carl Howe predicting sales of as
much as 4 million.
The release represents the end of Apple's
era under Jobs, who died this month after
an eight-year battle with cancer. The
iPhone 4S has received mostly positive
reviews for its voice- recognition
software, speedier processor and
improved camera. The device also
provides Apple with fresh ammunition in
its fight against Google Inc.'s Android
software, which will appear on a host of
new smartphones in the year-end holiday
season.
“It's going to easily outpace any previous
launch,” said Charlie Wolf, an analyst at
Needham & Co. in New York. It helps
that the iPhone is available on the three
largest U.S. carriers for the first time,
which will bring in new buyers, he said.
Apple also has released an update to its
iOS mobile operating system, which
customers can download to their existing
devices. The software comes with 200
new features and a Web storage service
for synchronizing photos, documents,
music and other files across different
Apple gadgets.
Google Competition
While the iPhone is the best-selling single
smartphone, all of the devices running
Google's Android operating system
account for more of the industry's sales.
HTC Corp., Samsung Electronics Co.,
Motorola Mobility Holdings Inc. and
other manufacturers have adopted the
software. Google offers Android for free
and then makes money on mobile
advertising and services. That revenue
now accounts for $2.5 billion a year, the
company said yesterday when it released
quarterly results.
Apple's shares have jumped more than
10 percent this week, boosted by
speculation that the iPhone 4S will be a
hit. The stock closed at $408.43 in U.S.
trading yesterday, making Apple the
world's most valuable business. Its
market capitalization now stands at
$378.7 billion, compared with $371.3
billion for the second-ranking company,
Exxon Mobil Corp.
In German trading, the stock today rose
1.4 percent to the equivalent of $412.42
as of 10:01 a.m. in Frankfurt.
Memory' of Steve
About 25 customers were lined up
outside Apple's Midtown Manhattan
store at lunch yesterday. In Australia, the
first country where the product went on
sale, Jackie Guo, 25, and his girlfriend,
both students at Macquarie University,
said they lined up as a tribute to Jobs.
“It's the iPhone for Steve, it's for the
memory of Steve,” Guo said. “It was the
last product he worked on. He pushed
this company to become a viable
company. His ideas are better than
others. They make the market more
hungry for the product.”
In Frankfurt, Grigory Stolyarov, a 27-
year-old employee of Dekabank Deutsche
Girozentrale, spent the night in front of
the store in the city's main shopping
street. He had put on two pairs of socks,
sweaters and jackets to weather the first
near- freezing night of the fall season and
be among the first 20 people in the line of
more than 1,000.
‘It's a prestige thing,” said Stolyarov,
who picked up three iPhones and already
owns an Apple iPad 2 tablet computer. “I
feel like an onion and I definitely need
some sleep,” he said.
Makeshift Memorials
In Tokyo, about 80 people were lined up a
day before the debut and there were
more than 800 people by 8 a.m. at the
Ginza district store.
Jobs's admirers have turned storefronts
into makeshift memorials, adding a
solemn tone to the frenzy that
accompanies the company's product
releases. Jobs co-founded Apple and
returned to the company after a 12-year
absence, rescuing it from near-
bankruptcy.
“They are going to sell out,” said Yankee
Group's Howe, who is based in Boston.
High demand for the new iOS 5 software
contributed to glitches at Apple even
before the iPhone 4S went on sale.
Customers downloading it to their older
phones overwhelmed the company's
servers, making it harder to upgrade.
Sell Out
Apple hasn't said how many people were
affected. The wait time to get a call back
from an Apple support representative via
the company's Express Lane service is
much longer than usual. Typically, an
Apple rep will call back within a few
hours. Now, the earliest appointments
aren't for days.
Trudy Muller, a spokeswoman for
Cupertino, California-based Apple,
declined to comment.
The iPhone 4S will go on sale later this
month in 22 additional countries,
including Ireland, Italy, Mexico and
Spain. Apple didn't say when it will be
available in China, a country Chief
Executive Officer Tim Cook has said will
be critical for the company's future
growth.
Apple said earlier this week that it had
received more than 1 million preorders
for the iPhone 4S. The three U.S. carriers
selling the device -- AT&T Inc., Verizon
Wireless and Sprint Nextel Corp. -- sold
out as well. The demand puts Apple on
pace to sell a record number of iPhones
in the quarter ending in December,
according to the analysts' reports. Gene
Munster, of Piper Jaffray Cos., estimates
that Apple could sell more than 25 million
iPhones this quarter.
Top Moneymaker
The iPhone, first introduced in 2007, has
become Apple's top moneymaker,
accounting for almost half its total
revenue. Sales from the new model won't
be part of the fourth-quarter financial
results Apple is due to release on Oct. 18.
Even so, profit rose about 60 percent in
the period to $6.9 billion on sales of $29.5
billion, according to the average of
analysts' estimates compiled by
Bloomberg.
The release of the iPhone 4S, along with
new Android models, should mean that
smartphone users account for the
majority of U.S. mobile-phone customers
for the first time, said Roger Entner, an
analyst at Recon Analytics LLC in
Dedham, Massachusetts.
Apple controlled 19.1 percent of the
smartphone market in the second
quarter, according to research firm IDC,
ahead of Samsung, Nokia Oyj and
Research In Motion Ltd.
Few companies can build excitement
around a new product the way Apple can,
Yankee Group's Howe said.
“This is what they are good at,” he said.
“They know how to make a big launch
weekend.”
Source -businessweek.com
With assistance from Ari Levy and Peter
Burrows in San Francisco, Scott Moritz
in New York, Nichola Saminather in
Sydney, Cornelius Rahn in Frankfurt,
Naoko Fujimura, Yuki Yamaguchi and
Takashi Amano in Tokyo. Editors: Nick
Turner, Marcus Chan.
