Apple 2.0

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Is 3.7 million AT&T iPhones in one quarter a lot or a little?

July 24, 2012: 12:08 PM ET

Activations were down -- 14% -- from Q1, but that's less than most analysts expected

FORTUNE -- Last April, when AT&T (T) reported that it had activated 4.3 million iPhones in Q1 -- down from 7.6 million in the Christmas quarter -- Wall Street looked at Verizon's (VZ) iPhone activations (3.2 million, down from 4.2 million), assumed the bloom was off the iPhone rose, and knocked another $10 off Apple's (AAPL) already depressed share price.
Wall Street apparently forgot that 63% of iPhone sales come from overseas, and when Apple reported that it sold 35 million iPhones in the quarter -- millions of them in China -- a lot of really smart people looked pretty stupid.
They seemed to have learned their lesson. Verizon reported Friday that it activated 2.7 million last quarter and on Tuesday AT&T reported that it activated 3.7 million. Both numbers were down sequentially, but this time the analysts were prepared.
"We view AT&T's June quarter iPhone number of 3.7 million as better than our prior thinking on the US markets," wrote Piper Jaffray's Gene Munster in a typical note to clients. "Between Verizon and AT&T, iPhone sales were down 15% sequentially, compared to our thinking of down 24% sequentially."
So far, Apple's shares seem to be holding up. Maybe this time traders are willing to wait a few hours for the markets to close and for Apple to report how many iPhones it actually sold.
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    • ZebulonPi, Today 04:22 PM
      Apple will prove yet again that they rule the smartphone world. Their stock price will be $700 soon, and everyone who sold now will be kicking themselves. Again.
      show more show less
    • Robert Paul Leitao, Today 02:26 PM
      The AT&T iPhone activation number is impressive when evaluated by two important metrics. The first metric is the number of handset activations considering the iPhone 4S is approaching the end of its one-year reign as Apple's flagship model and consumers are already anticipating the release of a successor handset. The second metric is the iPhone's strong market share performance in the quarter.
      The depth and scope of Apple's customer base is often overlooked...
      show more
    • David Gonzales, Today 01:59 PM
      It's a lot.
      AT&T 4.3
      Verizon 3.2
      Sprint 1.5
      Regionals 0
      ROW 26.1
      TOTAL 35.1
      ATT 3.7 confirmed
      VZ 2.7 confirmed
      Sprint 1.4 Estimate based on FQ2 53% of VZ
      Regionals 0.25 Estimate based on 9 new regional carriers
      ROW 24.15 Estimate based on World mix staying flat at 25%
      TOTAL 32.2
      show more show less
      John Molloy liked this
    • Sacto_Joe, Today 01:48 PM
      "So far, Apple's shares seem to be holding up." Only relatively speaking. Apple has now dipped into the red, hard as that is to believe. It's looking more and more like it's going to close at a P/E that closely matches Microsoft's - and that's considering that MS earnings have already been released. ANY gain in earnings has been completely discounted by the market. Unbefrickinglievable. We're about to see a MAJOR P/E compression for...
      show more
    • BongBong, Today 01:38 PM
      Looking for another blowout this quarter with China sales.
      show more show less
    • Martin Beutling, Today 12:19 PM
      That is something that I mentioned here several times before: the US are no longer the center of the world when it comes to Apple sales.
      I think that even in Europe Apple sold more iPhones than in the US.
      But it comes clearer if you look to China and keep in mind PEDs tremendous work when it comes to connecting the dots ("Bears beware: China and 3G-Subscribers") and acknowledge, that the majority of...
      show more

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    Philip Elmer-Dewitt
    Philip Elmer-Dewitt
    Editor, Apple 2.0, Fortune
    Philip Elmer-DeWitt has been covering Apple since 1982, first for Time Magazine, and now on the Web for
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