Apple sells 1.7 million iPhone 4 units
SAN FRANCISCO — Apple Inc. said Monday that it sold 1.7 million units of the new iPhone 4 in the product's first three days on the market, despite widespread reports of shortages of the wireless device.
In a statement, Apple acknowledged that demand has outstripped available supply for the new iPhone. Chief Executive Steve Jobs apologized to customers who were turned away following the initial June 24 sales date, calling it the "most successful product launch" in the company's history.
Shares of Apple moved little on the news, rising fractionally to $267.11 by early Monday afternoon.
The stock has gained more than 7 percent since the company first lifted the wraps on the device at an event in San Francisco earlier this month. The shares are up nearly 27 percent for the year to date, having peaked above the $275 mark last week. See full story on iPhone 4 introduction.
The newest iPhone is thinner, faster and includes more features than earlier versions of the device, which is now in its fourth generation.
The iPhone 4 went on sale June 24 at a price of $199 for the 16-gigabyte model and $299 for the 32-gigabyte version. AT&T Inc. remains the exclusive domestic carrier for the iPhone, as it has been since the first iPhone was introduced in 2007.
The launch has not been without other hiccups, either. Some buyers complained last week of poor signals and discoloration.
Even before the iPhone 4 went on sale, preorders were 10 times those of the iPhone 3GS last year, AT&T said last week. The company temporarily halted online ordering as it battled to cope with the surge.
In a note to clients Monday morning before Apple's statement, Deutsche Bank analyst Chris Whitmore cited his own research indicating strong demand for the iPhone 4. He expects Apple will sell 8.5 million total iPhone units for the June quarter.
"While the strong start is encouraging, we believe the long-term opportunity for growth of the iPhone is even more significant as near-term shipments are being gated by supply constraints," Whitmore wrote.
Apple's June quarter formally ended on the 26th — which means the 1.7 million iPhone 4 units sold will likely be included in the results.
Andy Hargreaves of Pacific Crest said the strong iPhone 4 sales will likely be offset by an inventory drawdown of older handsets. He reduced his total iPhone sales target for the quarter to 7.85 million from 8.61 million in a report Monday, thus lowering his earnings-per-share estimate to $3.02 from $3.15.
"Demand for iPhone 4 appears to be exceeding our expectations, so we view the inventory reduction as a transitory issue and would buy Apple on any related weakness," he wrote, maintaining a $330 price target on the stock.