Apple iPhone 4 Sales Unaffected by 'Antennagate': Company

 
 
By Nicholas Kolakowski  |  Posted 2010-07-21 Email Print this article Print
 
 
 
 
 
 
 

Apple's recent controversies with the iPhone 4 antenna rim have not translated into increased returns, Apple executives insist. Some analysts feel "antennagate" will not have a material effect on iPhone sales.

 

Apple's sales of the iPhone 4 have not taken a hit from recent controversy over the device's exterior antenna rim, asserted company executives during a July 20 earnings call. Those executives also tried to scuttle the notion that Apple deliberately creates shortfalls in supply of its newest products in hopes of generating buzz.

"We do not purposefully create a shortage for buzz," Tim Cook, Apple chief operating officer, told an audience of media and analysts during the company's earnings call. "I'm not sure where that comes from, but that is certainly not our objective. We would like to fill every customer's order as quickly as we can."

Analysts' questions during the call inevitably drifted towards Apple's recent issues with the iPhone 4's exterior antenna rim. Some customers and publications have complained that touching the rim can result in dampened reception, something that eWEEK was able to reproduce in limited in-office tests.

After weeks of what some outside pundits deemed a muddled PR response to the issue, Apple finally acted decisively on July 16, when Apple CEO Steve Jobs announced that customers who purchased an iPhone 4 through Sept. 30 would be eligible to receive a free rubber bumper that covers the rim.

Cook asserted that the antenna rim controversy-deemed "Antennagate" in some quarters-had in no way affected iPhone 4 sales.

"My phone is ringing off the hook for people that want more supply," Cook said. "Right now it is hard to address the real question you're asking, about is there an effect or not, because we're selling everything we can make. You can't run the experiment that way.

"The returns that we have seen on the iPhone 4 are less than the iPhone 3GS," he added, reemphasizing a point that Apple has made repeatedly in recent days, "and the ones for this specific issue are extremely small."

Peter Oppenheimer, Apple's chief financial officer, mentioned during the earnings call that the company expected to pay out roughly $175 million in free rubber bumpers for the iPhone 4.

Some analysts feel that the antenna issue will have little long-term effect on sales.

"We believe this topic has already garnered far too much attention," Brian Marshall, an analyst with Gleacher & Co., wrote in a July 16 research note. "If we are correct in our preliminary assessment above, we believe [Apple] will rebound materially in short order."

Apple sold some 8.4 million iPhones during the third fiscal quarter of 2010, a 61 percent increase, on its way to earning total revenues of $15.7 billion and a net quarterly profit of $3.25 billion. During that same quarter, Apple sold 3.47 million Macs, 3.27 million iPads, and 9.41 million iPods.

While much of the iPhone's focus has been on the consumer segment, the device is apparently seeing an increased adoption rate within the enterprise, according to Apple.

"If you look at the iPhone, we're now up to more than 80 percent of the Fortune 100 that are deploying or piloting the iPhone," Cook said. "We also see good momentum in the Fortune 500."

 
 
 
 
 
Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.
 
 
 
 
 
 
 

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