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New iPhones Rake in Revenue

New iPhones Rake in Revenue

Apple's latest iPhone launch may not have proven the company can still innovate, but it sure looks like it can still sell. Wall Street is rejoicing at the news that Apple's latest additions to the line smashed sales records for the first three days. Many as-yet unknowns will go into determining whether the handsets will be top sellers over the long term. The colorful iPhone 5c may quickly fade.

By Erika Morphy MacNewsWorld ECT News Network
09/24/13 5:00 AM PT

Just three days after its iPhone 5s and iPhone 5c models hit store shelves, Apple announced Monday that it had sold a record-breaking 9 million handsets.

In addition, more than 200 million devices were running iOS 7 as of Monday -- a mass upgrade that Apple called the fastest in its history.

Apple did not break down sales between the two devices. However, the iPhone 5s outsold its flashier counterpart by a factor of 3.4 times, according to Localytics.

After three days of sales, the iPhone 5s accounted for 1.05 percent of all iPhones in the United States, the firm said, while the iPhone 5c accounted for just 0.31 percent. Although the 5c was expected to do better in some markets outside the U.S., the iPhone 5s was preferred.

The 5s outpaced the 5c by a factor of 3.7 times in first weekend sales, Localytics noted, and in some cases -- such as in Japan -- the gulf between the two was even more pronounced.

Is the iPhone 5c a Dud?

The big question is whether these early trends will persist.

Wall Street expectations for opening weekend were more than met, which has fueled enthusiasm for the iPhone 5s, N. Venkat Venkatraman, a business professor at Boston University, told MacNewsWorld.

More time is needed for demand to unfold and customer behavior to develop before definite conclusions can be drawn about either device, he said.

During the first few days of sales, early adopters were bound to be out in force, skewing impressions about general customer demand for the devices, Venkatraman noted. It is impossible to know how China and Japan are reacting to the 5c for at least one quarter. More data further down the consumer pipeline will be needed to reach any conclusions about the 5c.

"The 5c is simply a lower price version of 5," he added. "I would be interested to see how many upgrade from 4S to 5c and how many upgrade from 4S to 5s on a global basis before we can declare 5c to be a dud."

For the Kids

A very important 5c constituency is parents, who are not likely to rush into a purchase in the early days, Trip Chowdhry, managing director of equity research at Global Equities Research, told MacNewsWorld.

"I think the 5c will be a formidable device for the younger set, and the chief purchasers will be parents. However, parents don't tend to just buy anything anytime for their children. For a device like this, they will research and think about it. Then, once they have made the decision to buy, they will do it," Chowdhry said.

The 5c will be a big gift item this holiday season, he predicted.

A potential major constituency for the 5s has not weighed in yet either, though. It could turn out that corporations become major buyers, which might mean the 5s will remain the better-selling device, SAP Senior Director of Mobile Product Marketing Adam Stein told MacNewsWorld. "Corporations are investing more rapidly in building out their mobile workforce by purchasing the newest, most powerful mobile devices with processing and performance."


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