Monday, September 24, 2012 at 10:34 am.

What Apple’s ‘5 Million’ iPhone 5 Sales Really Mean: Not That Much

iPhone 5 MillionApple sold 5 million iPhone 5s in its first weekend, up from 4 million iPhone 4Ss last year.

This number isn’t 10 million or even 8 million or 6 million, so some are saying that it’s “WORSE THAN EXPECTED” or “very disappointing”.

Five million sales may be, perhaps, below some estimates. But that really doesn’t say much.

  • For the real story, you need to think about supply and demand, and once again, demand surpassed supply. Apple stopped taking launch weekend pre-orders after only a short period of time, and many stores were sold out of various iPhone models throughout the weekend. We still don’t know how many iPhones Apple could have sold over the first weekend if supply weren’t a constraint, and we may never.
  • Mobile is a complicated industry where 2-year contracts often dictate purchase decisions. Apple sold almost twice as many phones over the past four quarters than the four quarters before that, and few of those people are already eligible to buy an iPhone 5 at a subsidized rate. Anecdotally, I’ve also seen mentions that AT&T was being stingier about early upgrades this year than last year.
  • First-weekend sales just aren’t that important relative to an iPhone’s lifetime sales. For example, the 4 million iPhone 4Ss Apple sold on launch weekend last year represent just 3.5% of all iPhone shipments over the past four quarters. The 1.7 million iPhone 4s Apple sold opening weekend represented just 2.2% of the phones it would sell over five quarters before launching the iPhone 4S.

Long story short: It’s a fun press release to see from Apple every year, but the iPhone 5’s real sales performance will be measured in months, quarters, and years, not weekends. It’s still crucial for Apple to sell a lot of them, but late-December sales will be a lot more important than mid-September sales.