146,000 iPhones Activated in First Two Days

Although Apple won't announce its quarterly earnings that will include the first two days of iPhone sales until Wednesday, AT&T said Tuesday that it had activated 146,000 iPhones on the 29th and 30th of June, far below analyst expectations.

Initial figures estimated weekend iPhone sales to range from 300,000 to upwards of 700,000 - with the majority falling around 500,000. Unless most activations came Sunday July 1 or Monday July 2, which is unlikely, those lofty expectations were not met. Apple's stock fell 5% in early trading Tuesday due to the news.

But Apple has yet to make any announcement on iPhone sales numbers, and investors who relied on such assumptions were doing so without any official guidance. Still, that didn't stop Apple's stock from surging after the iPhone's launch on June 29.

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Even with only 146,000 activations in two days, AT&T reported a 61% rise in net income and said 40% of iPhone customers were switchers from other wireless carriers. The company added 1.5 million subscribers in the quarter, up from first quarter growth of 1.2 million subscribers.

AT&T also said it has seen continued iPhone interest in July, with store traffic "above historical levels."

Apple will announce its quarterly earnings on Wednesday, which should include detailed iPhone sales figures and revenue stemming from the new product.

Many analysts reacted to the AT&T news with disappointment, but said said it was too early to read into the numbers with only two days of activation results reported. However, none has yet to explain how they could be so far off with their iPhone estimates.

"Piper Jaffrey initially estimated 200,00 would be sold. Monday after the launch, they raised the number to 500,000 (for no apparent reason). Other folks upped them reporting as high as 700,000," remarked JupiterResearch analyst Michael Gartenberg. "Well, if you called for 700,00, you were wrong but that doesn't mean Apple missed anything. There's a reason why making these types of calls is risky, this is what happens when you're wrong."

"The first two days mean nothing in the overall life of the product and the overall success of the iPhone won't rest on how well this particular model does," Gartenberg added. "The launch of the iPhone was the first move in what is likely to be a long game for Apple, trying to gauge the overall success based on two days of incomplete data is silly."

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