Apple Sells 5 Million iPhones This Weekend: 3 Reasons It Should Have Sold More – And Will Break More Records
This weekend was big for Apple and it was the first since the introduction of the new iPhone 5 that has been the center of mobile media attention. Apple sold over 5 million units and it was a record weekend for the company although some analysts were a bit disappointed with the overall number. We still believe Apple will sell more than 35 million units in the first quarter of sales for the new product but this was less than the 8 – 10 million we thought Apple could sell this weekend. The big problem? Apple ran out of iPhone 5s to sell and may have underestimated demand. Here are the top 3 reasons we believe Apple sold 5 million this weekend.
- Apple underestimated consumer demand for smartphones: the demand for smartphones has decreased but more people in the U.S. will have 2 smartphones or more soon – one from the job and one for personal use. Apple didn’t predict how many phones they would need based on some evidence that most people have a smartphone now.
- The demand for the iPhone 4S: sales of the iPhone 5 were twice as large this weekend as sales of the iPhone 4S when it was introduced so Apple may have looked at a phone that wasn’t revolutionary to gauge sales of a phone that was. Apple sales strategists should have looked more at comparisons between the iPhone 3 and iPhone 4 to gauge how many new sales could be possible.
- The economy: the overall U.S. economy is still relatively in shambles with 8 percent unemployment for the last 43 consecutive months but since the iPhone 4S was introduced, unemployment has hit the lower range of 8 percent. The iPhone 4S was released in the U.S. on October 14, 2011 when unemployment was at 9.9 percent. Unemployment is now down to 8.1 percent. Although the labor force participation rate is at a 30 year low – there are still more people who could be in the market for a new phone now that they are more likely to have a job compared to 2011.
The Apple iPhone 5 is a revolutionary product created in a better environment economically compared to the iPhone 4S which had no physical dimension changes and lacked the all-important…. “let me see your new iPhone” factor. Sales will continue to jump and Apple knows this. The company has data on just how many pre-orders they received this weekend and admitted they were “blown away” by pre-order demand which clearly they didn’t anticipate. Using the iPhone 5 it’s easy to see that more people will be making the upgrade and it will be a hit with the holidays coming up.