Apple 2.0

Covering the business that Steve Jobs built

Apple: 1 million iPhone 3Gs sold

July 14, 2008: 9:12 AM ET

Defying sluggish sign-up procedures and a worldwide crash of its computerized activation system, Apple sold its one-millionth 3G phone Sunday, three days after its debut, according to a company press release Monday morning.

"iPhone 3G had a stunning opening weekend," said Steve Jobs, Apple's CEO. "It took 74 days to sell the first one million original iPhones, so the new iPhone 3G is clearly off to a great start around the world."

Although at least one analyst had predicted that Apple and its partners would sell a million units worldwide at launch, a survey of stores conducted by Piper Jaffray's Gene Munster put sales at less than half that many.

In a report to clients issued a few hours before Apple's announcement, Munster had estimated that Apple had sold about 425,000 iPhones worldwide and that it would take Apple at least 17 days to hit the one million mark.

One explanation for the discrepancy may have to do with how Apple counts sales. Sales at Apple Stores are recorded at the register. But sales to its partners -- in this case, AT&T and the overseas carriers -- are recorded when the devices leave the loading docks in Asia. In other words, some of those 1 million iPhones recorded as sold by Apple (AAPL) may still be in transit.

Indeed, Munster makes the same point in a revised report issued to clients later Monday morning. He also speculates that sales must have accelerated over the weekend as Apple cleared up its iTunes activation problems:

"We underestimated the number of phones sold per hour throughout the weekend and Apple's recovery from activation issues. While we believe Friday's 24 phones per hour is probably a close guess for Friday, the number likely increased significantly on Saturday and Sunday, well above our previous estimate of 28 phones per hour."

For a summary of the original Piper Jaffray report, see here.

In a second press release, Apple announced that iPhone and iPod touch owners have downloaded more than 10 million applications from the App Store since it launched last week. Steve Jobs proclaimed the online store, which offers more than 550 programs for wireless download, "a grand slam."

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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