Wall Street to Apple's record-breaking iPhone sales: Meh
Apple could still see a boost once it begins selling the new iPhones in China, which has been delayed by regulators.
It happened again: Apple broke another record, and Wall Street shrugged as expectations were met.
Apple said Monday it sold over 10 million iPhone 6 and 6 Plus devices during the first weekend of sales, about 1 million more units sold than in last year's first weekend of sales for the iPhone 5S and 5C and double the number for the iPhone 5 two years ago. However, this year's number is merely in-line with market predictions, with analysts enthusiasm about the results muted.
"We view the results as solid, if unspectacular," Cowen analyst Timothy Arcuri said.
The company's shares were roughly flat at $101 in early afternoon trading.
One of the reasons the sales number isn't higher is that the launch was held up in China, one of Apple's biggest markets, due to delays from local regulators. Apple is working feverishly on gaining its final approvals, analysts report.
Canaccord analyst T. Michael Walkley said the tech giant should benefit from an uptick in iPhone replacements, which slowed in the past two years when Apple released the iPhone 5, 5C and 5S. The larger-screen iPhone 6 and 6 Plus are the designs Apple should have come out with instead of those iPhone 5 models, Walkley said, but added that there is now "strong pent-up demand" for the bigger phones.
Walkley said he expects Apple's market share gains will be "very strong" in the current quarter. Many smartphone customers using devices running Google's Android operating system should switch, he said, thanks to Apple finally entering the bigger-screen smartphone market, matching several Android offerings.
Wells Fargo analyst Maynard Um said units didn't seem as constrained as last year, suggesting Apple was either more prepared with inventory or iPhone 6 demand was softer than anticipated. The iPhone 6 Plus, which appears to have tighter supplies, sold out by Sunday evening in US stores, while nearly half of the iPhone 6 models sold, Cantor Fitzgerald reported.
Beyond the new iPhones and the expected Apple Watch wearable next year, Cowen's Arcuri said Apple should also gain from an expected new iPad to debut in the coming months.
An Apple representative didn't immediately respond to a request for comment.
The iPhone is Apple's biggest moneymaker, accounting for more than half of sales. This year's iPhone 6 and iPhone 6 Plus are most notable for their scaled-up screen sizes of 4.7 inches and 5.5 inches, respectively. The devices went on sale in 10 countries on Friday, with long lines reported that day at Apple Stores across the globe. The smartphones start at $199 for the iPhone 6 with 16 gigabytes of storage space under a two-year contract and go up to $499 for the 6 Plus with 128GB of memory. The smartphones will go on sale in 20 more countries starting September 26.