An old expression states that once someone has tasted fine grapes, why should he go back to raisins? Same holds true for Apple (NASDAQ: AAPL) and its iPod and iPhone sales. Investors have been spoiled by the overwhelming success of the iPod and naturally expect the same with the iPhone.
Seventy-four days after the launch of the revolutionary iPhone, Apple has announced it has sold its one-millionth unit! For some perspective here, it took Apple almost two years to sell its one-millionth iPod unit. Currently, Apple has sold over 110 million iPods globally since the official launch in 2002. If it took Apple two years to sell the first million, that mean that it is only since 2004 that Apple has sold 109 million units of iPod.
iPhone has accomplished in 74 days what took the iPod two years, albeit, the massive marketing and media hype did not surround the initial launch of the iPod. The normal first reaction to iPod was "what in the heck is this thing?!"
Steve Jobs, Apple's CEO and minimalist cheerleader has built a brilliant reputation for under-promising and over-delivering on results. The man is obsessed with corporate secrecy and giving the media only kernels of information when and only when it is absolutely necessary. Frankly, investors have come to prefer his methods of quiet, strength versus a CEO who is out selling and hyping his story.
Apple has become both an individual investor and institutional investor darling. With major new legs of growth from Mac computers and the beginnings of iPhone, not to mention a whole new line up of iPods, the stock has become a revenue and earnings visibility story, and an absolute leader in both the technology space as well as the consumer-retail space. This feat has never been replicated in the past. Other tech companies sell their products for consumers through regular retailing channels, while Apple has established an incredible stable of stores that cement customer relationships and loyalty.
Apple has maintained a conservative approach to the iPhone in spite of all the hype surrounding it. With the news of its one-millionth sale here so early in September, it's Steve Jobs way of saying to the naysayers that all is well and on plan. Apple stock is reacting well, up $3-4 but the best is yet to come over the next 2-5 years.
Georges Yared is the CIO of Yared Investment Research and the author of "Baby Boomer Investing...Where do we go from here?"
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Reader Comments (Page 1 of 1)
9-10-2007 @ 3:46PM
august said...
I'm thrilled it's becoming undeniably apparent that advanced technologies work their way to the top of the CONSUMER market in spite of endless naysaying by many in the analysis and investment communities. This is great news, because sometimes, even a revolutionary new product can't get an even break in the (stock) market until public demand steps in and forces the attention it deserves. You'd think more industry insiders would "get it."
Then again... You're always on the money Georges. Thanks & keep watching the horizon for us all!
Thanks for listening,
August
9-10-2007 @ 7:15PM
Alvin Jones said...
I was doubtful at first that apple would make their sales, but after actually using one of these devices it doesn't surprise me that the iphone was able to reach this mark as quickly as it did.
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