iPhone 5's record orders 'disappointing' - Independent Online

Ryan Faughnder and Adam Satariano New York and San Francisco

Apple reported debut weekend sales for the iPhone 5 that fell short of some analysts’ estimates amid supply constraints.

More than 5 million units of the iPhone 5 were sold in the first three days, surpassing a record set last year by the previous model, the iPhone 4S, the company said yesterday. Demand for the new handset exceeded the initial supply.

A successful debut for the latest iPhone, responsible for about two-thirds of profit, is crucial to fuelling the growth that transformed Apple from a niche computer maker into the world’s most valuable company.

Demand for the iPhone 5, with a bigger screen and faster wireless speeds, gives Apple a boost over rivals including Samsung Electronics that use Google’s Android mobile software.

“The number is lower than what people had expected,” said Brian White, an analyst at Topeka Capital Markets. He had estimated debut weekend sales of 6 million to 6.5 million units. “This seems to be driven more by availability than demand.”

The shares fell 1.5 percent to $689.40 (R5 722) at 9.37am in New York. The stock had gained 73 percent this year.

“The story now with Apple is less about the gorgeous technology and more about if it can really execute the global supply,” said James Kelleher, an analyst at Argus Research. “Can they get them to as many people as they want in the right amount of time?”

Gene Munster, an analyst at Piper Jaffray, had predicted Apple would sell as many as 10 million of the iPhone 5 during the opening weekend. Brian Marshall, an analyst at ISI Group, had anticipated sales of 6 million to 8 million phones.

Apple’s figure included sales from wireless carriers, retail outlets, Apple stores and online orders that customers had received, Marshall said. It excluded early orders from Apple’s online store that had not been delivered, he said.

“Units in transit could be in the millions currently,” Marshall added.

Natalie Kerris, an Apple spokeswoman, could not be reached for comment. Early orders in Apple’s online store topped 2 million units in one day, Apple said on September 17. The company said that “while the majority of pre-orders have been shipped to customers, many are scheduled to be shipped in October”.

“Demand for the iPhone 5 has been incredible and we are working hard to get an iPhone 5 into the hands of every customer who wants one as quickly as possible,” said Tim Cook, Apple’s chief executive. “While we have sold out of our initial supply, stores continue to receive iPhone 5 shipments regularly and customers can continue to order online and receive an estimated delivery date.”

Sales from the weekend will be included in Apple’s financial results for the fiscal fourth quarter, which ends on September 30. The company is expected to report profit of about $8.3 billion on sales of $36.1bn, according to the average of analysts’ estimates.

Besides the outsize screen and faster data speeds, the iPhone 5 comes with a more powerful microprocessor and lightweight body design. Software changes include new mapping and navigation features, a change Apple made to replace Google’s maps application. Some users and technology gadget reviewers have criticised the new navigation features.

In addition to the iPhone release, Apple also introduced a new version of its mobile operating system, called iOS 6. The update was downloaded by more than 100 million customers. That compares with more than 25 million for the prior update, iOS 5, introduced last year.

That number of downloads for the latest software, “suggests reports of dissatisfaction with Apple’s new Maps application will not be a deterrent to adoption”, Marshall said. â€" Bloomberg