Apple Sells 1 Millionth iPhone
Monday, September 10th 2007, 3:31 pm
By: News On 6
SAN JOSE, Calif. (AP) _ Apple Inc. sold its millionth iPhone over the weekend, days after it slashed the price by a third to spur sales.
The milestone was reached weeks earlier than expected and sent shares of Apple up $4.94, or 3.8 percent, to $136.71. The stock regained some of the ground it lost after the price cut spooked investors as a sign of weak demand and slimmer margins.
It took just 74 days for the combination cell phone-iPod to hit the 1 million mark, which Apple had said it would achieve by the end of September. By comparison, it took two years for the company to sell 1 million iPods, Apple CEO Steve Jobs noted in a statement.
Last week, Apple knocked $200 off the price of the 8-gigabyte iPhone, bringing its price to $399, and discontinued the 4-gigabyte version. Apple spokeswoman Natalie Kerris declined to comment on whether the price cut helped spur sales.
The price cut may have helped a bit, but Apple clearly was on track already to exceed its own expectations, analysts say.
``I'd argue that sales have been fairly strong, and this alleviates concerns that sales were weak,'' said Shaw Wu, analyst at American Technology Research.
The swift price cut _ not surprising in the cell phone industry but rare behavior for Apple _ angered hundreds of early buyers who bought the touch-screen gadget for top dollar. In response to all the negative reaction, Jobs issued an apology the next day and offered customers $100 credits.
Apple had said it was lowering the iPhone price to attract more customers, in time for the holiday season.
The move, which many analysts had predicted _ but not quite so quickly _ adds pressure to Apple's rivals, but it also was possibly part of a broader strategy for its entire product lineup.
On the same day Apple slashed the iPhone price to $399, it unveiled a new iPod, also for $399. The iPod Touch is basically the same as the iPhone but without the cell phone capability.
Apple cut the price of the hybrid iPod-cell phone to prevent an onslaught of consumers from abandoning it in favor of the Touch, Tim Bajarin, analyst with Creative Strategies, speculated. ``They solved the cannibalization problem with this,'' he said.