Daily Management Review

Strong Start to its New iPhone, Claims Apple


Strong Start to its New iPhone, Claims Apple
With high hopes that the record of sale of the 10 million units the previous versions of iPhone logged in their first weekend last year, Apple Inc announced on Monday that the advance orders of its new iPhones were on pace to beat the record.

Analysts attribute the sale of 10 million iPhones in the first week last year to the inclusion of sales from China. It can be recalled that regulatory approval delays significantly delayed the launch of the iPhone 6 and 6 Plus in the Chinese markets last year. Analysts are also of the view that very soon China would overtake the US as Apple’s largest market.

Investors were initially encouraged by the company's remarks but later tempered their enthusiasm as the company shares were up by just 0.7% in the afternoon trading after rising as much as 2.3 percent earlier in the session.

However Apple did not disclose the specific number of advance orders it received for the new iPhone 6S and 6S Plus. Compared with 4 million during the first day last year, analysts had expected about 4.5 million orders for the first 24 hours for the iPhnes.

Advance orders were accepted by Apple from Saturday for iPhones whose shipments would be made from September 25.

The demand for the iPhone 6S Plus had exceeded its forecasts for the preorder period and Apple said it was trying to catch up with the record.

"Preorders this weekend were very strong around the world," Apple spokeswoman Trudy Muller said in a statement.

Apple has been dogged by questions of whether it can sustain the momentum this year even after the company shattered sales records last year with the iPhone 6 and 6 Plus.

Die-hard fans and customers of Apple who are due for an upgrade are the primary drivers for the burst of sales of new phones, said BGC Partners analyst Colin Gillis.

"Will these phones have the same staying power as the iPhone 6?" he asked. "It’s still going to be a challenge," said Gillis.

He added that the exclusion of the Chinese market last year has set the bar lower this time for Apple.
Other analysts like John Jackson of IDC feels that the stock market has been assured about Apple’s performance based on the 6S and 6S Plus' strong early performance.

"Apple has this track record of outperforming its own outperformance, but the iPhone 6 looks like an extraordinarily tough act to follow. The fact that they are fast out of the gate with this refresh is a very encouraging sign," he said.

Modest updates are featured in the iPhone 6S and 6S Plus after their last year’s redesign. The features include improved cameras and 3D touch, a display technology that responds according to how hard users press their screens. Suggesting the company has ample room to grow, Apple executives have stated that only a fraction of users have upgraded to the iPhone 6.

In a much anticipated event last week, Apple had announced the phones, as well as a new TV set-top box that responds to voice commands.

Nearly two-thirds of Apple’s revenue in the latest quarter was generated from the sale of its flagship iPhones.