Can't Get a Clear Signal on iPhone Sales
Marek Fuchs
07/06/07 - 11:26 AM EDT
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The Business Press Maven has built his Street cred by telling investors what he has learned after reading the day's business media. So ... want me to tell you how the iPhone is doing? Lean in close, and I'll tell you. Ready?
Apple's (AAPL Quote) iPhone is underselling expectations. That's what I read. Actually, it's overselling expectations. I read that, too. Wait. Turns out, it's overselling stated expectations, but underselling whispered expectations. No, no, it's hitting the whispered number, but a week later, possibly. That's not right: It's already activated the million that was the whispered number! Actually, it doesn't even matter how it's selling, because margins are rich. But margins don't matter, either, because of some emerging iPhone partnerships in Europe. But margins must matter -- because the European release is going to be limited.
Read some of these clips for yourself if you want. But be advised that you probably want to take motion-sickness medication beforehand.
Together, we've seen some fathomlessly bad coverage from the business media. But this one might take the fathomlessly bad cake.
Forget about deciding whether the iPhone beat expectations. I think it might be easier to catch a moonbeam in a jar than figure out what expectations actually were. From
Bloomberg, we are told that expectations were for 200,000 and then again 350,000.
The headline that ran on July 3? No surprise there. "Apple's iPhone Sales Beat Expectations." The lead implied a happy Steve Jobs.
Now let's try to establish a pattern, do our best to build consensus. Did
another article, from that same July 3 (and from our own
TheStreet.com), side with the 200,000 or 300,000 guesstimate? Well, get your fingers and toes ready, boys and girls. This article talked about expectations in the million range. So the headline there? No surprise: "Apple's iPhone Misses Sales Targets." And forget a smiling Jobs. This lead had rivals breaking out the bubbly: "Apple's iPhone missed a 1 million unit sales target and rivals are rejoicing."
So it missed sales targets. So how much did it miss by?
This is what we are told: "Analysts estimate somewhere between 200,000 and 700,000 iPhones have been sold since the debut blitz started Friday evening." That narrows it down, huh?
As an aside, it reminds me of this fantasy I've long held of starting a firm called Financial Analysts Inc. We will all sleep the day away, with our feet up on our desks. The business media will call for a quote, jolting us awake long enough to answer, "Between a lot and a little." The next morning, we'll see ourselves quoted: "Analysts estimate somewhere between a lot and a little have been sold." A fantasy -- but not so far from the truth, huh?
Look, we can go on surveying this nonsense until our eyes are bleary and it actually begins to make sense. But by that time, real numbers will have actually been released.
The task for you, the savvy investor, is to tread oh-so-carefully in a situation like this.
First, when it comes to such a well-hyped product,
never base your decision on one article. If you do, The Business Press Maven will come to your house and put you in time-out.
You are never beholden to the one newspaper sitting on your desk or on the back of your sleeping dog. You can, for free, sample many different takes on the same charged issue. Do it. It will be abundantly clear when there are no easy answers -- even to basic numbers -- on an issue.
Second, be aware that there are different types of numbers. One is the number given for public consumption, generally known as the sucker's number. The other is the whispered number, the one a company might lean in and tell -- or even imply -- to analysts and investors.
Both numbers are essential to report, but some wet-behind-the-ear business journalists are not even aware of whispered numbers. You need to be aware of both numbers and make sure that who you are reading is, too.
Third, in our society, there is an infestation of analysts. As a result, the range of expectations for anything is broad enough for The Business Press Maven to fit his hips through. When we are talking expectations, you are always better off looking at those held by a couple of reputable sources than a range that includes everyone.
So what is the final, definitive answer? How, amid all this clatter and chaos, is the iPhone selling? The Business Press Maven has obviously built his Street cred on telling investors things no one else does, right? Well, right you are. And I'm not going to disappoint. So at this early, early stage, precisely how is the iPhone doing?
I have no blessed idea.
Nobody in the know is talking enough, and at this early point, things could change anyway. After the initial excitement, buzz about the product might be lame, killing sales in the crib. Or the opposite can happen and sales can build.
Days into the selling, I have no idea, and any investor playing this one is doing so on nothing better than a hunch.
