1M iPhone 4S pre-orders prove naysayers wrong, say analysts

Computerworld - Critics who last week lambasted Apple's new iPhone 4S as a lukewarm upgrade have been proved wrong, analysts said today.

Earlier Monday, Apple announced iPhone 4S pre-orders had topped 1 million in the first 24 hours, a 66% increase over the first-day sales of the iPhone 4 in the summer of 2010.

Over the weekend, Apple, AT&T and Verizon Wireless all said that they had exhausted supplies for delivery to customers on Friday, Oct. 14. Sprint had run through its inventory of the lowest-priced model, the 16GB iPhone 4S, but on Monday still had some 32GB and 64GB phones available.

"Amazing," said Ezra Gottheil, an analyst with Technology Business Research, of the iPhone 4S' sales in the light of the negative welcome the smartphone received last Tuesday when Apple executives, including new CEO Tim Cook, unveiled the device.

"It shows that the iPhone 4S is not necessarily for the leading edgers," said Gottheil. "Apple has become very, very mainstream."

Last week, social media monitoring company Visible Technologies said that 69% of the iPhone 4S comments it tracked on launch day were negative, a turn-about from what the company said were usually "rave" reviews for Apple and its product introductions.

Visible's findings echoed an undercurrent of disappointment from bloggers, news reports and some analysts last week, who were most dissatisfied by Apple's decision not to bump up the screen size of the iPhone or support the faster LTE networks being built in the U.S. by AT&T and Verizon.

"This was a great upgrade if people weren't waiting for a rabbit to come out of the hat," said Gottheil.

Brian White, an analyst with Ticonderoga Securities, agreed that the sales numbers put to rest the idea that the iPhone 4S wasn't up to snuff.

"While the unveiling of the iPhone 4S received a muted response, both from the market and tech blogs, the customers have the final word, in our view, and they have spoken with resounding enthusiasm for the iPhone 4S," said White in a note to clients.

Last week, White had called the initial thumbs-down take on the iPhone 4S "superficial" and a "knee-jerk reaction" by the market and Apple advocates.

"People who were disappointed are the ones who are always very interested in being surprised" by the latest Apple move, said Gottheil. "They're always looking for that 'I never would have thought of that' moment."

The boost in pre-sales over last year didn't surprise Gottheil, who cited a number of factors, including a larger pool of iPhone owners and a pent-up demand because of Apple's decision to delay the iPhone 4S roll-out to October.

And the iPhone 4S may have a bigger upside than the iPhone 4, added White, because of moves he expects later this year.

"There has been lots of buzz in China surrounding last week's unveiling of the iPhone 4S and we believe the product will be available in China during December," said White, who is currently in that country on business. "We believe the iPhone 4S will take Apple fever to the next level in China."

Apple has not announced when it will start selling the iPhone 4S in China -- a market that accounted for more than one-eighth of the company's revenues in the last reported quarter -- but has said that the new smartphone will be available in 70 countries by the end of 2011.

After meeting today with two of the leading Chinese telecommunications providers, White came away convinced that China Unicom -- currently the only carrier there authorized to sell the iPhone -- and China Mobile, the country's largest mobile operator, will both sell the iPhone 4S this year.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His e-mail address is gkeizer@computerworld.com.

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