John Paczkowski

Recent Posts by John Paczkowski

Why Didn't I Activate My iPhone on June 29? Well, Multi-Touch Led to Fondling, and Fondling Led to Heavy Petting and … I Guess I Just Forgot.

iphone_att.jpgDespite all the hoopla surrounding the recent launch of the iPhone, the product turned out to be the one that mattered least to the company’s financial performance during its third quarter.

After market close Tuesday, Apple said record sales of iPods and Macs inspired a 73% spike in its quarterly earnings and a 24% rise in revenue. The company shipped 1.76 million Macs–33% more than it did a year ago. iPod sales rose by 21%, to 9.82 million units.

And what of the iPhone? “The iPhone was on sale for the last 30 hours of the quarter ending June 30,” Chief Financial Officer Peter Oppenheimer said during the company’s earnings call. “During the quarter we sold a total of 270,000 iPhones to AT&T and through our Apple retail stores; and 146,000 iPhones were activated by Apple and AT&T. … We hope to sell our one-millionth iPhone by the end of its first full quarter ending Sept. 29. We are on track to begin selling the iPhone in Europe during the fourth calendar quarter of this year, starting with a few major countries and expanding the number of countries throughout 2008. We will announce our initial plans with our European partners later this quarter. … Finally, we reiterate our goal of selling 10 million iPhones in calendar 2008.”

So 270,000 iPhones sold in the 30 hours before the close of the quarter. That’s a bit short of some of the Street’s more bullish predictions. But it’s still a lot of product to move in such a short time. And clearly, Apple’s confident that the device will continue to sell well.

What’s more interesting here is the discrepancy between the number of iPhones Apple sold in the first 30 hours the product was on sale and the number of iPhones AT&T activated. During its own earnings report earlier this week, AT&T said it activated 146,000 iPhones in that 30-hour period. But Apple sold 270,000. What happened to the 124,000 iPhones that were sold by Apple but not activated? Was AT&T’s activation system so overwhelmed that it failed to enable them? Or was it something else? Consumers who purchased two iPhones and activated one, but not the other? Consumers who purchased one to give as a gift or to sell on eBay? Or consumers with enough self-control to buy an iPhone and leave it in the box until the initial activation onslaught passed?

Only AT&T knows the answer to those questions, and it’s not telling. “We activated 146,000 iPhones from 6 p.m. on Friday until midnight on Saturday,” said AT&T spokesman Mark Siegel. “Apple’s results are what they are.”

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik