A Few More Words on All Those iPhones · Feb 19, 06:24 AM

Last month we mentioned that we were not too concerned about the 1.4 million “missing” iPhones. One analyst, who we dubbed Toni Sacc went so far as to say that Apple might have stuffed the channel with phones to pump up its sales numbers, much like console makers do. The press, who apparently couldn’t sit back and think about this issue for more than 30 seconds, picked up on this, and suddenly the iPhone was a big disappointment. We have always maintained that there are areas where the iPhone can improve, but we still believe it is a very strong product overall.

Over the last few weeks, news outlets have changed memes. No longer is Apple stuffing some Area 51 warehouse with half a million iPhones. Instead, people talk about the iPhone black market. BusinessWeek interviewed the creator of TurboSIM and even the New York Times wrote an article about it.

Suddenly, 1.4 million bootleg iPhones is not really a stretch of the imagination. Of course, the story doesn’t stop there. Over at Seeking Alpha, Todd Sullivan describes the “real” problem with unlocked iPhones, namely that Apple is not receiving any revenue from AT&T or other official carriers when they are purchased to be unlocked. We have no real problem with Todd. It is troubling that he mentions that Apple cut component orders, not because it is a sign of slowed growth, but because the article he links to states Apple’s reduction in component is largely expected because they don’t expect to sell as many products after the holiday quarter.

While Apple’s loss of AT&T revenue might hurt the bottom line initially, the success of the iPhone is partly based on how large of an ecosystem Apple can form around the product. Apple really only loses when nobody is buying iPhones at all.

— Joe Fahs

Spew

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