The terrible horrible mystery of the missing iPhones

Where oh where have all the iPhones gone? Well, according to some, they’re sitting on the shelf. The central issues here resides in a disparity between the numbers of iPhones sold that Apple is reporting, and the number that AT&T has activated.

As of December 29th of last year (the end of Apple’s Q1 2008), Apple had sold 3.7 million iPhones total, but as of December 31st (the end of AT&T’s Q4 2007), AT&T had only activated about 2 million iPhones. iPhone sales from the UK, France, and Germany only accounted for an estimated 350,000 units, leaving around 1.4 million unaccounted for. Back in Q4 2007, Apple COO Tim Cook estimated that 250,000 of the handsets sold at that point were being unlocked; assuming a similar percentage for the Q1 2008 numbers would add another 412,000 to the mix—660,000 in total. That leaves around 740,000 phones still unaccounted for.

So, where are all those phones? At the moment, the guess is that they’re “in the channel,” which is a fancy-schmany financial analyst way of saying that they’re sitting in stores. Of course, this is little more than an educated guessing game: it’s possible a substantial number of those phones were given as Christmas presents and not immediately activated, or that the numbers of unlocked phones or international sales are higher than estimated. Apple wouldn’t reveal during the Q1 conference call what their target for iPhone inventories was, so it’s possible that they just want to make sure they have enough supply to meet demand.

The other alternative is that sales aren’t going as well as Apple would like. Though, given the fact that they’ve managed to sell 4 million in just over six months, it seems likely that they’ll meet their goal of 10 million before the end of 2008. No need to panic quite yet.

Category: AT&T, News

Posted by Dan Moren on Jan 25 2008, 12:01 PM ET

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