September 23, 2013

Apple sells record 9 million new iPhones in first weekend

The Associated Press

Gadget lovers still can't resist the iPhone's seductive call, even amid a bevy of enticing lower-priced alternatives that offer similar features.

click image to enlarge

A sales clerk pulls out an iPhone 5s for a customer during the opening day of sales of the iPhone 5s and iPhone 5C, in Hialeah, Fla., on Friday.

The Associated Press

In a Monday announcement, Apple Inc. said it sold 9 million units of its top-of-the-line iPhone 5S and less-expensive iPhone 5C during their first three days on sale. That trounced the performance of last year's model, the iPhone 5, which sold 5 million units in its opening weekend.

The initial sales figures for Apple's latest iPhone models provided the latest testament to the product's enduring appeal more than six years after the debut of the first iPhone triggered a mobile computing revolution.

The iPhone 5S and 5C's quick start also surpassed analyst forecasts that predicted Apple would sell somewhere from 6 million to 8 million models during the first weekend.

"The demand for the new iPhones has been incredible," Apple CEO Tim Cook crowed in a statement. As part of the company's effort to drum up interest in its most profitable product, Cook made an early-morning appearance at an Apple store in Palo Alto, Calif. on Friday when the new iPhones first went on sale.

Monday's positive news helped generate more interest in Apple's stock. The shares gained $23.23, or 5 percent, to close at $490.64.

Despite that rally, Apple's stock price remains slightly below where it stood before the Cupertino, Calif. company's Sept. 10 unveiling of its latest iPhones.

The downturn reflects concerns that the new phones won't be enough to reverse a slowdown in Apple's revenue growth that has been brought on by tougher competition from Samsung Electronics and others. Apple's rivals have been gaining market share by selling less expensive phones running on Google Inc.'s free Android software. Those nagging worries are the main reason that Apple's market value has sagged by about 30 percent, or $200 billion, since last year's release of the iPhone 5.

Part of this weekend's higher iPhone sales volume stemmed from Apple's decision to make the latest models available on a broader scale than in past years. For instance, this marked the first time that a new iPhone has gone on sale in China at the same time that the product also launched in the U.S.

But the opening sales numbers also served as "a powerful reminder of the strength of (Apple's) iPhone franchise," ISI Group analyst Brian Marshall wrote in a Monday research note.

In another sign of the intense interest in anything new from Apple, the company also said more than 200 million devices have already switched to its latest mobile operating system. The software, called iOS 7, is the most radical makeover of Apple's mobile operating system since the iPhone came out in 2007. Apple released iOS 7 as a free update last Wednesday for iPhone models dating back to 2010, iPads dating back to 2011 and the last iPod Touch that came out last year.

The downloads of iOS 7 during the first five days of the software's release roughly doubled the amount of installations after Apple release iOS 6 last year.

Apple could have sold even more iPhones during the opening weekend if the company had been able to deliver more of the 5S model, which sells for $199 with a two-year wireless contract. A new gold-colored model introduced with the 5S line was in extremely short supply, much to the frustration of many shoppers who waited in long lines Friday to buy one.

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