After speculation earlier in the week that Apple had sold between 400-500,000 iPhones,
Based on the cost of manufacturing an iPhone (see post July 2), Apple would have made a profit of between $200million and $266 million in 3 days (not including marketing costs), on sales somewhere between $350million and $420million, significantly more than earlier estimates of Apple having a $300million weekend.
Saying the iPhone has been successful at this point would be matter of stating the blatantly obvious.
Update: corrected reference to figures. The 700,000 figure may be another analyst figure according to a comment, although other places are reporting the 700,000 as the actual figure.
(image credit: Engadget)
That’s one popular gadget, all right.
Btw, I’ve submitted this to Digg.
Happy Fourth of July everyone!
It would be interesting to know the R&D costs involved with the iPhone, this cost shouldn’t be ignored for the iPhone as it is one of the costs of construction too really. It wouldn’t exist without it.
I thought America was supposed to have lost its technical edge. My 360 and now this?
I don’t even like Apple, but I do like a success, and it shows what we need to do to compete on a global scale. So well done in Cupertino or wherever in Apple this happened.
This is NOT confirmed. The MacNN article is based on a Bloomberg article, in which a Goldman Sachs analyst ESTIMATED that Apple has shipped 700,000 phones.
IOW, you’re basically reporting rumors as facts. I expect better from you guys.
BTW, I’d estimate right at 300,000 myself.
Michael
First line of the referenced post at MacNN:
“Apple over the weekend sold more than 700,000 iPhones to rocket past analyst predictions”
If they are wrong then so be it, I’ve amended the post to reflect your question about the figures, but to be fair, that quote reads like the figures are real, and I’m sure you wouldn’t disagree…and MacNN is usually a good source for Apple related news
Also, the profit margins that you use and refer to in the previous post, is grossly amateurish, since it does not even include manufacturing costs, retailer margins (for AT&T), as well retail costs for apple. The real profit would be way lower than that, but still very ipressive for one weekend.
The iPhone gets cooler when you develop web apps for it:
I recently built an internal web app to interface with my entertainment system for the iPhone — check-out the video:
http://www.yout...h?v=L6vp_zuxyMM
Tux
true, but having said that I wouldn’t think that retailer margins for AT&T would be much at all, if anything. The model for phone companies has always been zero margin on the phone, profit from the plan. Perhaps I should have included AT&T’s new revenue: say half are new AT&T customers, 350,000, a minimum of $49.95 a month or something like that, and over two years….minimum of $419million over 2 years (based on the min plan)…which is pretty staggering for 3 days of sales.
those are a whole lotta numbers…lol, the evolution has begun – it’s begun.
What ever …… Let it b IPHONE has real mind blowing features — but its always HATSOFF to the unique marketting strategy of Steve JOBBS !!
… without which I dout this phone mite hav sold soo mch …. 
…. Creating a big MARKET expectation based on the previous product’s HIT and making consumers feel that owning an IPHONE is a prestigious factor … is a real gud marketting strategy … so HATS OFF to Mr.JOBBS 
In my opinion …. as Mike told about the new product of Kevin rose – ” People love Kevin and for sure they will check out his new product ( the twitter killer) ” ……. ” People love ‘APPLE’ ( to be more precise “IPOD”
) …. and we hav Mr.JOBBS burning speech – which will evn make people buy any product for any price – both together is the primary factor for IPHONE’s hype ” …. 
Heeeey .. there is somthing fishy …. the comment count on this page (13)…. and the comment count displayed on the top in figures (15 comments ») does not match …
……
cool .. I didnt count the top 2 …
…. sorry
The comments of the authors are not counted
http://techtheb...win-iphone.html
Win an iPhone by leaving a comment.
apple is not really in the electronics business
to me it seems more like they are in the fashion business
which is off course nice for them, but as it goes with all trends……
K. Kaviraj
the count includes trackbacks.
It’s amazing!
what happened to crunchgear – is it gone now that tc has taken over gadget coverage?
i feel bad for crunchgear dudes.
Neither Apple or ATT have released any numbers to market research firms (I work for one). If anyone is stating numbers, then they are strictly estimates. I’m also wondering if these estimates include apple.com sales. Apple reports seperate numbers for that. People also seem to be speculating as to Apple’s profit margin on the phone. It really isn’t as much as people are suggesting. Based on margins of previous items, they probably aren’t getting more than $100 per unit. I’ll try to give you guys a heads up on the numbers if I see them.
Enjoy the holiday.
America has not lost its edge – certainly not in innovation, Marketing. Both of which translate essentially to high margins for a period of time, at least.
Somebody said Apple is in the fashion business. That makes America a world leader in techno fashion.
Great!!! Unbeliveable
Unbelievable that so many customers buy a phone just because of the design. Finally they will only thing they do is to phone.
700,000 is just another guess, its really annoying that sites like MacNN are posting best guess as fact, then other sites start quoting it as real deal…
Not sure about those figures. Didn’t your July 2 post say Apple were making margins of “20-50%.. (probably closer to 20%)”? So what you’re really wanting to say is..
On sales of $350million..
Est. Profit of $70m (20%) to $175m (50%)
On sales of $420million..
Est. Profit of $84m (20%) to $210m (50%)
So the assumed profit is anywhere from $70m to $210m (based on what you’re saying) depending upon the number of iPhones sold and what margin you want to use?
Just wondering how you came up with the “between $200million and $266 million” est profit figures?
Either way to assume that with labour, marketing, etc. etc. you’d still be making 50% margin is rediculous, even 20% is ambitious.
(Per SJMN story) iSuppli took apart the iPhone and estimates the cost of manufacturing to be $265.83 for the $599 version – that translates to a 55% gross margin. Of course R&D and Marketing costs would reduce the overall margin but the 55% gross margin on an expensive consumer device is great!
This is a ridiculously simple way of looking at it.
To make the iPhone they had to:
Have a massive team of engineers (probably paid well)
Have computers for all those engineers
Have a llarge building for all those engineers to work in
Pay the power bill to run the building and the computers
They had to pay for many different prototypes through the design process
Had to pay testers (we hope!)
Had to pay marketing and PR people
Had to pay millions in advertising – online and offline
Had to pay manufacturing costs and tooling setups (not cheap)
Paid for shipping, distribution and logistics
Paid a sales group to take an fulfill orders
Leave margin for the dealers and their retail stores
When I see articles on the internet that make statements like “they are selling it for $600 and it only costs $250 to make!!! What a rip off”. It just tells me those people have no understanding of business whatsoever. A 55% margin is not great. It’s pretty average. You need to factor in all costs and expenses.
I hope that it arrive soon at Spain.
I would not want to be one of the Apple stores that did not sell out its stock. I bet Apple’s retail analyst will be scrutinizing their performance.
So lets see, 1.1 billion phones made last year / 700,000.
Keep on truckin’ Apple, you’ve only scratched the surface.
hmm… is the iphone available for Europe? if the price is 599$ with a 2 year contract… what’s the price without a contract???
And that’s for US alone…
Just wait until this thing is rolled out globally… Then do the maths… Apple will be swimming in profit, R&D costs will be organic and component costs / man power will scale very nicely.
Further, this is Apple’s first iphone – and much like the ipod there will be newer versions and refinements over time.
The iPhone is going to be like Nintendo’s Wii. Apple is going to be making tons of money off of it because they will not be able to meet the demand for a long time.
I imagine Microsoft must be shaking in their boots a little bit. If Microsoft can’t innovate on the consumer end more, even if they do have better development tools…They’ll lose to Apple.
lets not forget earlier reports that apple negotiated revenue-sharing from service charges as well. talk about a cash cow. now if only i could dig up $500…..
Noooooooo !
At least it’s just a rumor, not REAL DATA. Maybe they sold only 300,000. Who knows.
Hey Hino2k, your wrong, oh so very wrong haha! you notice how just over half of the US apple stores have stock left yea? that kinda means they’ve managed to keep on top of demand! Nintendo got caught short by their own success, twice in fact, whereas companies these days are waking up to the idea that having more than enough on day 1 is better than selling out cause that way their is more stock to sell therefore more money to be made. Look at the iPhone launch and also in a much more small scale the PS3 launch which is the most pre-ordered console ever and yet they still managed to have enough stock so people could walk off the streets and buy one on launch which means they have the ability to get more sales!
I’m getting lost in all that WOW!
LOOOOL
It’s amazing how quickly we forget that our friends at AT&T have agreed to participate in the governments illegal wiretap program. Hey, lets reward them with record sales !!!! Good job people !!!
You can get iPhone with out a 2 years contracts. You can get a pay as you go plan, usually for people with bad credit. The price of the iPhone is still the same $599 for the 8gig etc.
Thankfully, I’m one of those 700,000 who has an iPhone. It took about 4 days to activate, but it’s finally working
Who needs a real iphone, when you can have one of these??
http://www.frug...4life.com/?p=48
It is cheap, and gives you the same “social status boost” as long as you don’t get found out.
It costs as much as a PS3 and more than a Wii or an X360. Did it outsell (by total units sold) any, or all of these consoles?
I can see it now – #1 at the box office: iPhone. iPhone the blockbuster. More iPhone movie opening weekend puns…
The beginning of the end for the mouse and keyboard.
700 000 american idiots….
When (or if) Apple chooses to share sales figures, you’ll find they weren’t anywhere near 700,000. The basic math, using figures readily available, shows that pushing much over 500,000 in three days just wasn’t possible. My guess? 350,000 from Friday through Sunday.
Kajj, I can’t believe you’d call the people who have bought iphones idiots. Have you even tried one? It is incredible; I just brought it out to bars last night and people that hadn’t seen one before stopped drinking to check it out (and all were saying it’s worth the 600)
Good luck to MSFT with that crappy Zune; talk about being a decade late LOL
This success was expected. I think the iPhone was the most advertised tech-product on the web. Apple made a great campaign between internet users before the launch of this product.