According to research studies and articles around the Web, the highly anticipated new iPhone, versions 5s and 5c, may fail to spike sales for Apple during their first week on the market. According to an article in Forbes magazine, the reasons are related to pre-ordered items and how the company measures sales. Apple may only consider an iPhone “sold” when the unit has been delivered.
“The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable. Product is considered delivered to the customer once it has been shipped and title and risk of loss have been transferred. For most of the Company’s product sales, these criteria are met at the time the product is shipped. For online sales to individuals, for some sales to education customers in the U.S., and for certain other sales, the Company defers revenue until the customer receives the product because the Company retains a portion of the risk of loss on these sales during transit.”
The article also highlights that the pre-order window and the limited availablity of phones at stores that are other than Apple, can trigger a dip in online sales.
“If Apple can’t make enough to have units in stores or be available on Internet sites to be shipped in the first few days, it would not surprise me to see the company announce on Monday sales below last year’s 5 million plus for the iPhone 5 and come in around 3 to 4 million,” said analyst Chuck Jones.
Besides, Wall Street is closely watching how the new device is received by consumers. There are many concerns regarding the rise in competitors and the company’s strategy around the new product.
“This launch is more important than the past couple because of the fall in Apple’s stock price,” During virtually every other launch, the outlook for the company has been more optimistic than what we see today.”
The article emphasises that “When Apple launched the iPhone 5 years ago, the stock was trading above $700. Since then, it has slumped by a third and closed at $472.30 on Thursday.”
As of now, reports show limited supplies and sellouts of certain units, depending on the version and the color.
According to Marketwatch.com, there is a strong demand of the iPhone 5s in its gold version, and they report rumors about production challenges related to the fingerprint-scanning feature of the new device.
Most analysts expect Apple to sell around six million iPhones during the launch weekend, compared to more than five million reported for the launch of the iPhone 5 in 2012.
Gene Munster, analyst at Piper Jaffray, said “As a reminder, the U.S. iPhone 5 supply largely lasted until midday Saturday. If supply sells out before midday Saturday, we believe there could be risk that the weekend sales figure ends closer to the 5 million in our 5-6 million range.”
Considering these insights, the future is shaping up as a battle of Apple vs. its competitors. But will Apple continue to innovate and succeed?