The huge gap between units sold and iPhone buyers signed to AT&T may mean there are a lot more hacked iPhones out there than anyone expectedIt's been dubbed the Mystery of the Missing iPhones. On Jan. 22, Apple reported that it sold 3.7 million units of its smartphones worldwide through the end of 2007. But AT&T, the exclusive U.S. iPhone reseller and by far the largest buyer of the devices, reported that its subscribers activated fewer than 2 million units last year. The big question on the minds of Apple watchers is: Where have the other 1.7 million iPhones gone?
The uncertainty has helped sink Apple's (AAPL) stock price to $130 a share, down 34% since the beginning of the year. That is far worse than the 13% drop for the tech-heavy Nasdaq index. Apple shares were already under pressure over concerns about how weakening consumer spending would affect the company's shipments of iPod music players and notebook computers. Now the worries about iPhone sales have entered the mix. "In the past week the stock has fallen further because of potentially lower iPhone shipments," says Shebly Seyrafi, an analyst at Caris & Co.. A story that recently surfaced in a Chinese newspaper claimed that Apple's iPhone component suppliers are cutting back on production in anticipation of lower U.S. demand.
A January falloff isn't unusual in the cell-phone industry; the holidays are typically when sales peak. But investors who examined the discrepancy between Apple's and AT&T's (T) numbers figured that, with handset sales to European carriers Orange, O2, and T-Mobile Germany (DT) just ramping up, many of the missing iPhones may be languishing in inventory. And an inventory buildup is always dangerous, particularly amid slowing demand. Toni Sacconaghi, an analyst at Sanford C. Bernstein, figures Apple's first-quarter iPhone sales could be down as much as 30% compared with daily sales rates last year.
Read More
