Apple's iPhone sales are good-not-great (updated)

Update: Appleinsider is saying that of the 6.9 million iPhones "sold", two million of them are in channel inventory.  The real sales figure is closer to 4.9 million iPhones.  Don't shoot the messenger!

This week's earnings call was exciting news for Apple's stockholders.  The iPhone had climbed past the Macintosh and iPod as the number one revenue generator across the board.  With almost 40% of all Apple revenues for Q4, the iPhone made Apple the third-largest global handset maker by revenue and pushed Apple past RIM in terms of units.  Steve Jobs even showed up at the earnings call and broke protocol of using non-GAAP accounting measures to illustrate these numbers.  

Pundits were ushering in the new Apple phone company and death of Apple Computer.  Apple would now be a handset maker first and foremost.  Apples' stock was up over 10% in after-hours trading, was responsible for 1/2 of AT&T's conversions, etc etc...

And certainly the iPhone is a phenomenal device and is doing well by any standard.  But the numbers are inflated. Yesterday I saw a graph that made me take pause to look at all of these numbers. 

Jordan Golson of the Industry Standard broke out the iPhone vs Blackberry numbers over the last six quarters.  If we look back at the previous two quarters we see a lot of pent up, unmet demand for the iPhone.  We also see that the Blackberry's demand has been steadily rising.

iphonevblackberry.jpg

If you remember back to last quarter, there were massive outages of the original iPhone.  Apple had made a finite (6 million) number of iPhones and it was sold out its few points of sale.  Even after Apple announced the 3G iPhone, there was a two-week wait until it was in anyone's hands.  

If Apple had a constant supply of iPhones over the last three quarters, would the graph have looked any different?  The best case scenario (I've added in light blue) is that Apple would have sold as many iPhones in Q4 that it had without stock in the previous quarters.  That would mean that Apple would have lost out on millions of sales in the pevious quarters.

Realistically, however, a lot of those people (everyone I know included) would have snapped up a 3G iPhone during the last quarter if it was made available then.  We waited like the good Apple customers do - according to Steve Jobs .  Additionally, there has been a great deal of pent up demand for the 3G iPhone in other countries.  When Apple opened the floodgates this quarter, everybody jumped in.  They'd been waiting.  Some over a year.

So, with that in mind, I think that Apple wouldn't have beat RIM this quarter had they had kept supplies up to snuff for the previous two quarters (Illustrated in Pink).  It also wouldn't have been the third-largest phone maker in the world.  While Apple's prospects will continue to accelerate, we shouldn't expect Apple to amaze us again next quarter (at least on the iPhone front - MacBooks may be another story)

That being said, the iPhone is transforming Apple and is the platform on which Apple will have the most opportunity for growth.  It has the secondary benefit of selling apps, movies and music for the company.  It is growing fast and is exciting.  But!

Let's just not get ahead of ourselves.

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