
commentary Apple supporters triumphantly cheered on the company after it sold 5 million iPhones over the weekend. Wall Street, however, was disappointed by the figure after seeing the long lines on Friday.
The correct reaction probably lies somewhere in the middle. Perhaps a polite golf clap? For analysts, it was a classic case of hype feeding into the estimates, which ramped up to as high as 10 million for the first weekend, numbers that even a powerhouse like Apple couldn't hope to achieve."We find it unfortunate that some analysts continue to publish irresponsible estimates without taking into account realistic demand trends and potential supply constraints," said Shaw Wu, an analyst at Sterne Agee.
Read CNET's iPhone 5 review here.
Now, any company would kill to sell 5 million units of anything over the weekend, but the iPhone runs at a higher standard. Sales of the iPhone 4 were amazingly resilient, and hung on to the top spot at AT&T for more than a year (it was also helped by its introduction at Verizon Wireless). Conversely, sales of the iPhone 4S had an initial pop, but began to fizzle as the months went on. Yes, it remained a top-selling phone, but its momentum couldn't match the previous iteration.
The iPhone 5 is poised to pick up where the iPhone 4 left off. Despite criticism that it isn't drastically different, the phone addresses the key concerns of iPhone users, namely the larger display and a faster 4G wireless connection. Those two, alongside the thinner and lighter design, may convince consumers that it's worth the upgrade. Despite the initial disappointment, Wall Street remains as bullish as ever. J.P. Morgan yesterday said it estimates Apple will sell 50 million iPhones in the fourth quarter. For the quarter ending on Saturday, the firm estimates 25 million units will be sold. Sterne Agee's Wu said the noise over the launch and the following disappointment didn't change his estimate. He still believes the company will sell 27 million this month and 46.5 million in the quarter ending December 31. While the stock may have sold off yesterday, there remains a lot of optimism around Apple.Beyond internal issues, Apple and its new iPhone 5 face unprecedented competition. Its biggest rival, Samsung, has already launched a campaign mocking the iPhone lines that even some fans have admitted contains genuine insight into the silliness of the whole affair. For once, its rivals can already boast of those key features in many of their smartphones.
Samsung's Galaxy S III has been a blockbuster in its own right, and overtook the iPhone 4s this past summer.Google unit Motorola has already tweaked Apple for the maps flap, and its lineup of Droid smartphones are an attractive alternative.
The holiday season is poised to get even more crowded with a slew of Windows Phone backed by a massive push from Microsoft, vendors such as Nokia and HTC, and carriers such as Verizon Wireless and AT&T. For the carriers in particular, the iPhone is no longer the phone to have, since it's available virtually everywhere. There is also a lot of incentive to promote other phones, since they require a lower subsidy and consequently weigh less on their profits. Apple's iPhone 5 will be successful; there is little doubt of that. But how much of a success remains to be seen, and one weekend's worth of data isn't nearly enough to make a call yet.Facebook wants to show it's a force for good amid scandals: At Facebook's Communities Summit, the social network unveils updates to tools for blood donations, nonprofits and mentorships.
Qualcomm-FTC lawsuit: Everything you need to know: The antitrust case could decide how smartphones get made in the future -- and what they cost.
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