Apple iPhone Stumbles Out of the Gate

Apple (AAPL Quote) sank 4% in early trading after AT&T's (T Quote) early iPhone sales update underwhelmed investors.

Investors have been enthusiastic about Apple's prospects in the wake of the iPhone's introduction last month, and many on Wall Street were eagerly anticipating AT&T's update on activations of the new device. Apple introduced the iPhone the evening of June 29, so it was understood that AT&T's figures -- which cover the second quarter ended June 30 -- would reflect just a day and a half worth of sales.

Even so, the San Antonio telco's announcement Tuesday morning that it had activated a total of 146,000 iPhones on June 29 and 30 was met with something less than enthusiasm. Apple fans and industry analysts had been looking for about double that number.

Some iPhone customers did experience troubles activating their phones during the first few days of the debut. That may account for the some of the lower-than-expected tally from AT&T. ...