iPhone Troubles

The meme is rapidly beginning to take hold today that iPhone takeup has been considerably more tepid than many (myself included) expected. The most recent impetus has been the 146,000 new-subs number today from AT&T, which is lower than most people expected for the first two days of iPhone sales. At the same time, in-store checks by analysts and others (including yours truly) show that iPhone is moving much slower than it was before, and Apple stores have ’em in serious quantity).

So, is iPhone failing? I think not, or at least not yet. First, this subs number is not a units number. Granted, you would expect them to be correlated, but it is a lower bound to the number of iPhone sold. While I’m not suggesting, as some are, that AT&T’s activation process held things back by two-thirds, there is also lots of reason to suspect that activations and units were materially different. That won’t continue, of course, but it was true on the first weekend.

Second, the in-store frenzy had to abate, so seeing slowing units isn’t a surprise at all. iPhone are not impulse buys — a two-year contract does temper that sort of thing — so no-one should be entirely surprised.

Am I totally sanguine? No. As I related here earlier, this is more of a consumer product than I expected, and I found the keyboard frustrating to work with, which is a big deal given my messaging dependence. At the same time, it seems increasingly clear that a 3G version of the device will be out by late this year — analysts are saying the same thing today — and that suspicion is going to temper sales further in the coming months.


  1. Another issue that many mobile music consumers bring up is that iPhone, unlike Didiom, does not allow over-the-air purchases.

  2. Let me pull one observation made repeatedly by the applerati long ago about why the ipod was better than other products with many features. And that is that the ipod did one thing and did one thing well. No one says that anymore now that this swiss army knife of a product is out. but i agree with the former sentiment. this isn’t as good an ipod or as good a phone or as good a internet browser than if apple had made 3 separate devices. i still hold out hope that apple will make these 3 devices.

  3. Rafael Montoya says:

    The device´s charm is huge when you hold it and try it at the Apple Store but it dissolves as soon as you own one. Our experience has not been good so far. Maybe we should try to buy the demos at the store?

  4. I’d withold any quantity predictions until Apple tells us tomorrow. The 30 hour sales is likely closer to 150,000 or higher.
    I’d have to disagree with Rafael. The ownership experience for me has been delightful. It demos extremely well next to Treos and Blackberrys. If the email/calendaring doesn’t meet you corporate needs, go with the BB.
    I’d be very surprised if Apple introduce 3G iPhone in ’07. I think the holidays will be iPod only. Edge isn’t great but it’s more than adequate. I’d much rather surf Edge/Safari than 3G/Wap or BB Browser. The current iPhone has legs into ’08 so I wouldn’t expect a 3G update until then.

  5. Did AT&T make any effort to note how many people failed the credit check and had to go with a prepaid plan? Or how many people followed the online instructions to force a failure and avoid the contract?
    I can’t say I’m surprised that this is far more consumer oriented than business oriented. I’m personally waiting to see if Apple releasese an update that will allow the iPhone to handle Word documents, something I appreciate on my Treo (but is of little value to most people). But the idea of getting an iPhone has actually induced me to start using Google Docs more, so maybe the halo effect is going to work in other directions.

  6. I don’t think it’s as bad as some have implied, but it’s also not anywhere close to being as good as some of the analysts would have had you believe.
    I had an iPhone, a Blackjack (which the iPhone was supposed to replace), and a Blackberry 8830 (work). I love the iPhone UI and integration, but there is no way in Heck it will replace my BB in the near-term; The BB is hands-down a more useful tool. The lack of 3G was also a much bigger barrier than I anticipated in replacing my (free) Blackjack.
    I returned the iPhone and will consider buying again in a year or so. Right now it’s a hobbled $600 toy. How many consumers are going to buy that given the alternatives?