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AT&T, Apple differ on the iPhone gap
Written by Daniel   
Thursday, 26 July 2007 13:33
AT&T, Apple differ on the iPhone gap
By Tom Krazit
Staff Writer, CNET
Published: July 25, 2007, 6:40 PM PDT
 news analysis: The honeymoon might already be over between Apple and AT&T.

The two partners stood in stark contrast Wednesday evening following the results of Apple's third-quarter earnings, in which the company revealed it sold 270,000 iPhones in the first 30 hours the product was on sale. Earlier in the week, AT&T said it had activated only 146,000 iPhones during a similar period of time.

The innovative activation scheme that Apple and AT&T came up with for the iPhone launch made life much easier for many early iPhone customers, in that they could take their new purchase home and activate it from the comfort of their living room. It also made for a stressful weekend for those who ran into problems activating their iPhones.

Both Apple and AT&T initially said that a small number of customers ran into activation problems. AT&T said the "vast majority" of customers sailed through the activation process, and Apple said "a small percentage" of customers were affected by the activation delays.
"They deserved a lot to put up with AT&T. But Apple's not a big enough part of their business to get them to fix their problems."
--Gene Munster,
Piper Jaffray analyst

But what's to account for the 124,000 iPhones that were sold by Apple but not activated? Apple and AT&T were not on the same page in the early hours after Wednesday's conference call.

"We activated 146,000 iPhones from 6 p.m. on Friday until midnight on Saturday," said Mark Siegel, an AT&T spokesman. "Apple's results are what they are."

When asked to explain the discrepancy, Siegel initially cited three factors. First, he said that Apple counted sales of iPhone accessories along with the sales of the actual iPhones themselves, citing a footnote in Apple's earnings release with that language.

Apple spokesman Steve Dowling, however, said that footnote refers only to revenue from iPhone accessories, not unit shipments. The 270,000 shipment figure in Apple's earnings release is all iPhones, and doesn't include headsets, cases or other accessories, he said.

AT&T's second explanation was that Apple's 270,000 iPhones included sales of iPhones through Apple's online store, which obviously couldn't have been activated the first weekend since Apple is quoting two- to four-week lead times for iPhones ordered online.

But Apple Chief Financial Officer Peter Oppenheimer specifically said on the conference call that the 270,000 units reflected only iPhones that were sold to AT&T for distribution through its network of retail stores and iPhones sold through Apple's retail stores. No iPhones sold through Apple's online store were included as part of that 270,000 unit figure, the company later confirmed... More

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