back to article Apple's iPhone numbers do not add up

Analysts looking at both Apple's results and those posted by AT&T - Apple's iPhone partner in the US - have noticed a large discrepancy in the figures. Apple says it has sold 3.7m iPhones in total. AT&T says it has sold 2m iPhones, and European operators are believed to have sold between 300,000 and 400,000 handsets. Which …

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Gold badge

Depends

If they're talking about shipped to store sales or sales of the phone to end users.

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Too expensive and too easy to unlock....

Rather than drop prices in European markets and risk further unlocking/exporting, perhaps the best way to stimulate sales would be to offer the first three months free or six months half price on O2. This might even tempt people with a few months left on their current deal and would certainly provide an incentive to activate with O2 rather than unlocking and going on a different network.

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Jobs Horns

erm

Or Apple just make shit up for the analysts. Volume shipments aren't audited by the, er, auditors, and even if they were, the big audit firms aren't too keen on actually having to check the figures in return for their fee.

Apple managed to cheat the stock option system for years, so why not do the same with volume shipments.

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Hold up

"However, at the company's most recent analysts conference, Apple executives re-iterated that they expect to sell 10m iPhones by the handset's first birthday, in June."

Hang on a second. Their possibly dodgy numbers aside:

3.7m sold so far (according to them).

2m on order for the first quarter, assuming this order hasn't been cut.

1.2m for the second quarter leading up to June.

3.7 + 2 + 1.2 = 6.9m.

Am I missing something? I'm just a programmer, so business processes aren't my thing. If anyone can explain where the rest of that 10 million is going to come from, I'd love to know.

If Apple end up bolstering these statistics by filling a landfill, I'll be irritated.

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small question

Ok, time to show my noobishness when it comes to mobile phones.

Whenever someone buys an iphone they have to get it with a contract as well, right?

So how could a person jailbreaking their iphone have an affect on the reported number of phones sold as well as affect the money apple get (since they will, presumably, still be paying the contract for the iphone and thus apple plus the contract for the network they moved to which seems a bit silly, 2 contracts for the one phone). Not to mention that an unused/bricked iphone in someones house is still one that has been sold with the contract that has to go with it.

Or, does the money only start getting removed from your account upon activation of the iphone? which begs the question, have you violated the contract by never initiating it?

the only way the discrepancy could really exist is by apple counting how many they have sold to their "partners" while their "partners" are only counting the number of those units they have shifted, meaning the missing 1.3mil of them are sitting on shelves awaiting someone to love them.

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oxo

What about Apple's own stores?

Presumably they aren't included in the AT&T figures ..

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Jobs Horns

@Giles Jones

I'm with you on that one.

Given the kicking Apple has been receiving for low sales, they are bounded to be quoting "shipped", not sold.

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Thumb Down

The Fox news of the tech world strikes again!

In further unbiased Register tech reporting, Apple eats babies and tortures little fluffy kittens!

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Anonymous Coward

It is a flop

Its too expensive. Everyone who wants one as one by now. Can't see Apple selling 1.5m iPhones per month unless it finds 6 new markets based on Euro sales over 2 months.

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Jobs Halo

Unlocked exports?

Today's New York Daily News features an article about 2 guys who stole 800 iPhones which were to be delivered to Hong Kong - where they are very popular.

If there is an international trade in unlocked iPhones it would certainly explain /some/ of the missing phones.

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Silver badge

could it be...

just a possibility here, could apples figure include applestore sales, whereas at&t's only include their direct chanel? I haven't looked at all, so maybe it doesn't... Would be helpful if the actual metrics on the figures was shown.

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Jobs Halo

Well, almost

Umm... I think you'll find that Apple have always said 10m iPhones by the end of 2008 - rather than in the first year - which at least gives them another 6 months to make up the slack.

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Unhappy

Of course...

If Apple/O2 were to offer a PAYG option for the UK iPhone (with a reasonable data tariff) then I would buy one without hesitation - it's those expensive contracts that are most offputting.

I did see someone using one on a train recently (and yes it wasn't an iPod Touch), so they are out there. Somewhere.

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@Dana

Have you even read any of the articles around here that slag off Vista, Microsoft and anything associated with the two? El Reg are equally cynical about everything, not just your Lord and Master, Mr Jobs.

This is a completely factual story. Would you like to show how it's biased?

Ruddy fanboys (girls?).

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Version 2?

I wonder how many potential buyers are waiting for Version 2? I know I'm not interested in V1, but I'm ready to consider V2.

If Greg is right about Q1 and Q2 projected sales, then that represents a pretty steep drop. Apple can't ignore that, so it tells me that they need to come out with V2 long before June if they want to maintain sales momentum.

People seem to be complaining about the slow pace of firmware updates for V1. That's another clue that Apple had moved on and is focusing resources on V2.

-Rick

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@Dana

Ok, let's being by stating the obvious - El Reg gives *everyone* bad press. I'm guessing you're a Mac kiddy tho and enjoy the battering MS gets every other day.

With that out of the way, the article states 3 main points, and all are from other people, so they are not El Reg hack conjecture.

1. Analysts have pointed out that iPhones shipped (as per Apple) > iPhone contracts sold by AT&T/O2

2. The size of that discrepancy would (to the analysts) indicate large amounts of iPhones aren't being used on the networks they are locked to.

A quick aside in how business works - your share price is not what your business is worth. It;s what everyone else *thinks* your business is worth. If you tell everyone that you are going to shift 10mil phones and make $x/month in recurring contract revenue on top of that then ppl think "wow, they are going to be worth more money in the future" so the share price goes up. Then we find out they aren't going to make that amount of extra money, so we see a "correction" and the shares drop to reflect that belief.

This is why analysts are looking at the number of iPhones shifted compared to contracts signed. It's not to have a dig at your precious Jobs, it's to see if it's worth buying shares or not at the current price. It's not *all* guess work you know.

Anyway back on topic...

3. Apple says it plans on selling 10mil phones. The figures don't look strong enough to support that, so the analysts point this out.

The iPhone is a nice phone, there was crazy hype about it for aaaages before it was announced, but it's badly priced.

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Black Helicopters

missing iphone

Another possibility is they have a quality problem. my iphone touch screen broke after 6 days!

P

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Unhappy

money

I like my iPhone, best phone I ever had. I even own a Macbook Pro.

But I can barely see getting an iPhone at our prices. For what you pay there, even I would not buy one.

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Stop

@ Dana W

Hang on. You're accusing El Reg of being biased for quoting a 3rd party?

They gave you the numbers. Does your (new) math add up? Can you make sense of it all? If you're so biased, what do you make of the whole thing?

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Jobs Horns

@oxo - Use your noodle

AT&T's figures are based on phones registered with their network, the only legal service provider for the Jesus Phone in the US. So it doesn't matter if you bought your iPhone from AT&T, an Apple shop or Joe Bloggs on EBay, if it hasn't been unlocked you will be using AT&T in the US. NOW do you understand?

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Or are they being used just to show off?

A few weks ago I encountered a kid round here with an iPhone (who definitiely wouldn't have had the knowledge/skills to unlock it), but who made the pretence of using it.......on Gower, where O2 (unlike all the others) can't be bothered to provide any signal at all!

So, perhaps some are being bought merely for "pose-value"

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Paris Hilton

Whatever people say...

I have an XDA orbit, and I love the phone, is lovely. But... I've seen the jesusPhone, and it looks good. Damn good.

SO before the June bday, when my contract is up, I'll purchase one. Must be good news for apple, 1 less to sell to reach that 10m target.

Choosing Paris Hilton here, for simple reasons: like the jesusPhone, most of you probably really want it, but won't admit to it.

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Jobs Horns

IT'S THE BIG APPLE LIE AS USUAL! S.O.S.

That's "Same Old Shit" from Apple of course, just like the big lie about Stevie not participating in the Stock Options Fix scandal and of course the continuing lie that Apple products are bug and flaw free (20 year of online documentation on going, proves that).

Apple is a scummy marketing company that MAKES NOTHING, designs little and bribes their many hacks in the media to constantly beat the positive product drum and never mention things like the mega flawed G3 / G4 iBook world wide debacle.

The iPhone and other recent products like the Apple TV are flops, get over it Apple Kool Aid Drinkers and Hack Media.

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Paris Hilton

The reason is simple

The reason is simple they have included the sales figures of the cheaper better and more versatile Mainland Chinese Clones made at the same factory !

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Sigh.. let's read the article, peeps...

The words say:

"Apple says it has sold 3.7m iPhones in total. AT&T says it has sold 2m iPhones, and European operators are believed to have sold between 300,000 and 400,000 handsets."

So: total sold through every channel, including off the back of a Hong Kong lorry: 3.7m. Of that, AT&T and the European operators have sold (say) 2.4m. Therefore Apple has moved 1.3m through other channels (possibly including warranty replacements, since we're talking marketing numbers).

As Greg noted, there are allegedly up to 3.2m phones in the production pipeline for the next 6 months, which makes some kind of sense based on the sales of the last 6 months. But that still leaves us with a grand total of 6.9m phones _built_ by June, when Apple is claiming it expects to have sold 10m.

Which suggests that Apple is planning on selling phone futures!

In other news, good to see that Apple Fanbois are still well represented...

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The lessons from Enron are....

You don't lie to the SEC, not if you want to stay out of gaol. If Apple have stated "sold" rather than "shipped" they must actually have the cash for each of those handsets otherwise the Board are in big trouble. I agree with the posters above that the missing 1.3 million sales will likely be through Apple's own retail network in the US. I don't think AT&T are including them in their numbers.

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Dodgy facts

Remember, unlike Microsoft, Apple announces products sold, not shipped.

It was 10 million iPhones by the end of 2008.

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Alert

@Dana

I have to disagree with you that El Reg is biased. Over the last couple of weeks I have informed them of a story about Steve Jobs snubbing one of the faithful at the Mac Expo, showing his true colours, i.e. a tosser who thinks the little people are beneath him

http://www.theinquirer.net/gb/inquirer/news/2008/01/18/jobsness-snubs-fangirl

A story that Apple are being sued once again for patent infringement over the iPhone

http://www.appleinsider.com/articles/08/01/23/apple_faces_new_lawsuit_over_iphone_concept.html

A story that MS software has been found to have fewer vulnerabilities than open source, but MS take a while longer to fix problems

http://www.techworld.com/security/news/index.cfm?RSS&NewsID=11154

None of these stories has made it onto El Reg, yet we have stories about 'the stunning MacBook Air laptop' despite it being a severely lacking over priced pile of crap.

http://www.reghardware.co.uk/2008/01/18/review_video_macbook_air/

How exactly are they being biased? Or is it just that you have one of the permanent 'Protect Apple Fields' than fanboys seem to come equipped with?

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Anonymous Coward

What about iPod Touch + Phone?

Forget the iPhone, look at the iPod Touch. THAT is one hell of a Wifi micro browser with email on that device. It's a damn site cheaper once you take into account the contract.

it has the same zooming browser, with two fingered touch zoom, now the maps too, video replay on a watchable screen, music of course, plus the usual stuff. i.e. it has all the sweet stuff the iPhone has.

Add a separate telephone and you have something comparable to an iPhone but without the lock-in and with the ability to split the two, e.g. lend your phone to your wife and hang on to your browser/movie viewer/MP3 player yourself.

I reckon iPod Touch is taking a huge chunk out of iPhone sales. (I have one).

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Stop

Everyone going on about Apple Stores

You just don't get it do you? --ALL-- iPhones sold in the US irrespective of where they are sold, are sold with an AT&T contract and consumer have the choice of activating the contract or not. So what is being said here is (and quite legitimately) AT&T are reporting significant differences in the number of consumer signed up to iPhone contracts compared to the number of phones Apple is claiming to have sold. Which is exactly why there is reference to the unlocked phone market in the article.

Secondly, the same is true in the UK. If you buy an iPhone you have one option; O2. You can buy from 3 different places (O2, Apple or CPW) but you can only use it on O2's network. However if the phone is unlocked and never activated on the O2 network then O2's figures won't tally with Apple's either.

The important thing here is Apple has signed deals with the network providers to take a fairly substantial cut of their revenue as a result of getting exclusive rights to iPhone customers. If a large portion of these phones are being unlocked this seriously undermines Apple's return and may even *potentially* turn the iPhone into a loss leader for Apple. I say loss leader because the phone is already failing to meet projected revenues which means only one thing; either stop producing it or cut the price.

I suspect rather a large number of UK iPhone sales are not real sales and have in fact either stayed in the storage room in O2/CPW stores or have been dished out to O2/CPW sales staff and managers to try and promote the gadget and increase sales through increased exposure. This is of course bad news for everyone involved in the deal, but great news for us Apple haters, of which I am proud to be one.

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@ heystoopid

Is this the same chinese iphone my brother bought in Dubai only for it to stop working before he got it out of the shop?

@ Malcolm Weir and others

Apple say 10 million by the whatever date it is - you all seem to forget that there are some other countries in the world (with rather large populations) where the iPhone will be going on sale in the next few months. They are obviously not planning to sell those additional phones into the current markets (Especially in those where the uptake has not been particularly good).

And finally. I now know 2 people that own the phone. One is hacked and other isn't. The hacked one will be unhacked when the lady's voda contract runs out next month.

Incidently, the hack is unusual - it involves a very skinny, flexible pcb with a single exceedingly tiny microchip on it. It is positioned in the sim card holder before the sim card is inserted into the phone. Without it the phone reports "invalid Sim card"

With it in place it reports "welcome to Voda" Anyone know how it works or where to get it?

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Jobs Horns

@Too expensive and too easy to unlock....

Let's also add "too useless to own" like the usual drivel that Steve-Airhead-Jobs feeds everyone.

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Stop

Forget about the June thing

Apple said 10m by the end of 2008, which they're (more than) on track for if you crunch the numbers. I bet unlocking rates are much higher than they're willing to let on, though.

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Dan
Jobs Horns

counting

I wouldn't be surprised if Apple has their own proprietary way of counting that differs from the base 10 system everyone else uses.

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Anonymous Coward

Splendid, what.

Good to see the Nerd Rage surrounding the eyeFone hasn't abated yet.

I bought one because it looks nice. I couldn't care less about the feature set. I'd wager your phone looks like it was squeezed out of a dog's arse. Bet you're dead proud of that, aintcher?

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iphone mistake made by Apple

Apple made a serious mistake sign the dead end contract with only sole provider in each continent and also shouldn't limited to GSM only. The delay produces lots of opportunities for competitors times to better products to compete before iPhone saturate the market. Remember Apple 1 & Apple ll vs IBM clone n microsoft DOS?

Steve Jobs and team probably let recent success over crowded their mind couldn't see straight.

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Linux

No sense of HUMOR! And a few silly assumptions.

"El Reg are equally cynical about everything, not just your Lord and Master, Mr Jobs.

This is a completely factual story. Would you like to show how it's biased?

Ruddy fangirls."

Seriously people, loosen UP! I was making a JOKE. I expect El Reg to slam Apple, they always do. Windows and Linux geeks hate Apple, no shock.

As to my "Lord and Master" I also run Linux, and unless Apple starts letting me buy PARTS, my next new machine will be another Linux box.

I didn't get a Mac because I though they were perfect, I got a Mac because after 15 years of crap I was sick of windows, and there is NO future in Vista. I didn't feel Linux was up to my needs at the time, this is changing rapidly.

I'm drifting back to my Linux box, my Mac is mostly for games and fun. My Linux box does the gruntwork. And my next PC will probably be another Laptop running Linux. You assume most Mac uses are technical incompetents, and that most are blind devotees. Want those? Go talk to Vista proponents. There is where the real "kool-aid" flavor is these days.

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Go

@Hold up @Version 2 & @Too expensive

I am tempted to say, do not get confused with truth in a marketing message.

However, only way for all these to be true is that

1. iPhone market is elastic (that is cheaper it is, more will buy)

2. iPhone version 2 is in the works that has both more desirable features (like 3G), and cheaper to manufacture to meet #1.

3. Business friendly (i.e. Blackberry Enterprise) to get additional subscribers who is already paying $100+ per month.

And if I were apple, why would not do all of the above? And since when did Apple pre-announced anything?

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Jobs Horns

Discrepancy is iPhones "sold" as "Product Placements"

Apple is the KING of "Product Placements" in TV shows, Cable shows, Movies, Commercials and of course all the THOUSANDS that they "sell" GIVE TO Media Hacks to BRIBE them to drop the Apple, iPhone, etc. name, every chance that they get. Guys like Walt Mossberg, Leo Laporte, the hacks at Barons, Wall Street Journal, CRN etc. are bribed whores for Apple PR in this way. I heard for a fact that Rush Limbaugh was given 50 iPhones to give away and use personally, so he constantly drops the iPhone name on the radio broadcasts.

It was too funny when one of those "Product Placements" iPhones on the Cable show "Nip Tuck" was being used UPSIDE DOWN through the whole show! The same thing happened on CSI Las Vegas.

I guess that all those "missing" phones are those "FreeBee" bribes. Apple ain't stupid ... just a Crooked Company

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Their in the rest of the world!

In Hong Kong their are two kids(13ish) in my class alone who have iPhones. My cousin has another. I have seen about 20 shops selling them, within a few shopping centres.

My guess is that although iPhones may not be so readily available in other parts of the world, I do not think they are that hard to get hold of.

1.3M is not so big if you remember that the world is larger than North America and a few countries in Europe.

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AJ
Stop

Apple Should Sell Handsets Only...

... Unlocked so we can use on any network!

If they are at a reasonable price I bet they will see their figures shoot up for the amount of phones sold. People do not like to be dictated to and told which network they must go with and we certainly dont like being ripped off.

This was apples BIGGEST mistake, if they sold contact phones at a decent & discounted price, and unlocked phones for the price they are now they would of sold millions more as customers want CHOICE!!

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Silver badge

Some real world figures

Sales in Germany (Europe's largest single market) since launch have been 70,000 units. Sales in France have been higher (70,000 in the first month) probably because it's the only place to buy an unlocked one legally. Apple probably prefers the sales in Germany because they're earning on the contract as well.

Somehow it's difficult to see those sales picking up without considerable drop in price of both phone and accompanying contract. We're moving towards € 25 for mobile flatrates (VoiP excluded) which is a reasonable price for UMTS and less than 50% of what Apple wishes people to pay.

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Jobs Horns

@Dana

"...my Mac is mostly for games ..."

Because there are so many games for Macs right?

A Mac would be the last thing i purchased if i wanted a games machine.

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Paris Hilton

apple user != fanboi

i'm getting slightly irritated by the opinion, oft-peddled here that anyone who uses apple products is some kind of vacant air-headed tech bimbo who's only interested in pose value or making fashion statements.

at the risk of sounding like the person who despairs when the obscure band they like 'sells out' and tops the charts, may i point out that many of us have been using apple computers since before they were 'fashionable'. i've personally been on the apple bandwaggon since way back in the system 6,5 days. it's been a long, bumpy, often frustrating ride and - whilst i'm no fanboi. there's plenty that's risible about apple, the corporation - i'm glad to see that apple's years in the doldrums seem to be over, at least for now.

so, just coz the rest of you have belatedly realised that 'computer' is not synonimous with 'plastic dell box', 'operating system' is not synonimous' with whatever bug-ridden version of windoze happens to be current and the term 'software' encompasses a wider field than that covered by microsoft-bloody-office, it doesn't really give you the right to disparage those of us who learned to think for ourselves long before you lifted your heads from mamma gates's saggy corporate nipples and looked around you for the first time.

and the iphone?... a beautiful piece of underpowered hardware with too much baggage (in the form of the tied contract) attached for me to be interested. which is why i'm typing this comment on the handy QWERTY keyboard of my sim free nokia E90. fanboi i ain't!

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Go

Locked/unlocked

Of course, if you live in France, they're available unlocked anyway - as it's a legal requirement. Subsequently,

I suspect a lot of people from the UK are sneaking over to France to buy unlocked ones to bring back to the UK to use on any network...

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Jobs Halo

Games

"Because there are so many games for Macs right?"

Believe it or not, four out of five games I play are out for Mac. Mac gaming actually exists now. Its been growing for a while. The few new PC games I can't get are of the "bang and splatter" type. Who cares? If I want to shoot a gun, I'll go to he range. Way more fun.

Yes, I miss the new Sam and Max, but I'm not going to run Windows to play ONE game. Games are not that big a part of my daily life. And these days thats about all PC's are good for. The geek switchers I know like to call PCs "Wintendos". If I want to game that bad I'll buy a console. My computer is a computer first and a toy second.

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Anonymous Coward

Most hyped phone in history and does not sell well

European sales figures are just too low. All that free advertising and they only sell 400,000 iPhones. How the hell are they going to sell the more expensive 3.5G version? The Nokia N95 without so much hype has sold in higher number in Europe, 1.5m units per quarter at the last count.

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Unhappy

between a rock and an iPhone

Apple are making life very difficult (for me, not themselves).

My Voda (UK) contract will shortly run out and I would LOVE an iPhone. Trouble is although the iPhone is very desirable it is a bit feature short, so what I really want is the iPhone 2 (thinner, with GPS, 7 MP camera, VGA screen). So instead I am found contemplating spending £250 for the 16Gb Touch..... but I know as soon as I buy one Jobs will release the iPhone 2...., so I can't bring myself to buy my Touch...

trouble is, I won't be able to bring myself to buy the iPhone 2 either, as it will undoubtedly be £400 on £35/month (x18) on non 3G (duh?) O2, I mean, c'mon Apple! Throw me an iBone.

So I will end up with nothing!

By choosing only 1 operator per country Apple prevent a price war and are able to keep the price inflated..... selling fewer more expensive units as opposed to lots of cheaper units. Thus making it more desirable, thus making me want one even more..... grr!

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Please people

Boy, people here talk about facts then proceed to get them all wrong. :-)

Apple plans to sell 10 million iPhones by the END of 2008.

That means 4 million so far is a good start.

Sales are sales. Keep in mind that sales are taking place world wide and some are not registered cause they are jail broke.

Apple just reported the BEST quarter ever. 22 million iPods, 4 million iPhones, 2.3ish million computers.

Complain, bitch, screw with numbers all you want, Apple is moving forward. Check back in again in another year and compare numbers now and then. That is all that matters. OH and one more thing, those of us who enjoy Apple products will continue to enjoy them over the next year. Enjoy Vista. :-)

en

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Linux

Don't give up Dana

There are a lot of assholes who comment on ELReg I have had to deal with them a few times myself they aren't reading what your writing they are only in it for the bashing, especially with Apple stories. On the other hand they are quite right Apple fanbois make them look like a bunch of philosophers if you haven't dealt with an Apple prick try it sometime it will open your eyes. Anonymous because I want to be.

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