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Apple may sell 10 million iPhones in record debut

Customers lined up in Sydney, Tokyo and New York to pick up the latest model

Image Credit: AFP
Customers queue to enter the Apple Store in the southern German city of Munich on Friday as the iPhone 5 went on sale. Appleis introducing the iPhone across the world faster than any of the device’s five previous debuts.
01 Gulf News

San Francisco: Apple Inc is poised for a record iPhone 5 debut and may not be able to keep up with demand as customers lined up in Sydney, Tokyo and New York to pick up the latest model of its top-selling product.

Global sales started at the Apple Store in Sydney’s George Street at 8am, as about 500 people waited to buy the device. Besides Australia, the phone will debut in Japan, Hong Kong, Singapore, France, Germany, the UK, Canada and the US on Friday. With a new wireless contract, the device costs $199, $299 and $399 in the US, depending on the amount of memory.

“The longer people are in the Apple ecosystem, the harder it is for them to switch away”
-Giri Cherukuri, portfolio manager for Oakbrook Investments LLC
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Pedro Mendez, a 21-year-old student from Elmhurst, New York, got in line at Apple’s flagship store on Fifth Avenue in New York on September 18 to make sure he’d get the new phone.

“It’s something you have to do,” said Mendez, who plans to sell his iPhone 4S to a friend. “You stand in line, you see everyone the next day at school and talk about it.”

The crowds reinforce estimates from analysts that the iPhone 5 will be the largest consumer-electronics debut in history. Apple may sell as many as 10 million iPhones during the weekend sales rush, according to Gene Munster, an analyst at Piper Jaffray Cos. Because Apple generates about two-thirds of its profit from the iPhone, a successful introduction is critical to fuel growth that has led investors to catapult Cupertino, California-based Apple to the world’s most valuable company.

‘Cool Kids’

“We’ve never seen anything like this before,” said Andrew McAfee, principal research scientist at Massachusetts Institute of Technology’s Centre for Digital Business. “It used to be that with tech products the nerds got them, obsessed about them, and talked about them, and the cool kids wanted no part of that conversation. That’s just not true anymore.”

Apple may have trouble keeping up with initial demand because of supply shortages of components such as in-cell screen displays, according to Barclays Plc. Already, the company had to push out some deliveries to October after early online purchases topped 2 million in 24 hours, double the record set last year with the iPhone 4S.

Apple is introducing the iPhone across the world faster than any of the device’s five previous debuts. The iPhone will go on sale in 22 more countries on September 28, Apple said, and it will be in more than 100 countries by the end of the year.

Steve Wozniak, who co-founded Apple with Steve Jobs, was among those waiting at an Apple Store before the opening. He wrote on Twitter that he was in line in Australia to pick up the new iPhone.

Sydney, Tokyo

In Sydney, the first 11 places in line were taken up by companies using the sale to promote their own business. Some of them were there since September 18, and were paid as much as A$200 ($209) a day to stand and advertise for business. Apple employees in blue T-shirts applauded as the first shoppers got into the store while police tried to manage the crowd outside.

At the Apple Store in Tokyo’s shopping district Ginza, about 750 people had lined up by 8am.

“I’ve been taking time-offs since Saturday and waiting,” said Mitsuya Hirose, 37, who was the first in line. “When I bought the iPad, I was the third person in line, so I am happy now,” said Hirose, who bought his first iPhone three years ago.

In Hong Kong, hundreds of people jammed the entrance of the Apple Store in Hong Kong’s IFC mall, chanting and cheering as customers waited to be let in. Police and security guards were standing by as the store opened at 8am, two hours earlier than usual. Only those customers who registered online to reserve a handset were allowed in.

Stolen Phones

Among them was Michael Chan, a 29-year-old airline industry worker, who called in sick at work to be able to buy two 64 GB black-coloured iPhones. Chan said he had bought all previous versions of the iPhone, since they were introduced in 2007.

At three outlets in western Japan’s Osaka, 191 iPhone 5s were stolen earlier on Friday, Kyodo News reported, citing police at the prefecture. A resident near one of the outlets saw three men break into the store and then leave in a car, the news agency said. Thefts were also reported from Kobe City, Kyodo said, citing local police.

The new iPhone has a bigger screen, lightweight body design and faster microprocessor, and is compatible with speedier wireless networks. Software upgrades include new mapping and turn-by-turn navigation features.

Technology gadget reviewers mostly praised the new device, especially for its swifter wireless speeds that improve Web browsing and other data-hungry tasks. One criticism was the new mapping features, which don’t include details on how to navigate public transportation.

Android Competition

On September 19, two days before the introduction, about 17 people were lined up at Apple’s Fifth Avenue store in New York.

The lines around the world show how customers remain loyal to Apple once they buy one of its products, said Giri Cherukuri, a portfolio manager for Oakbrook Investments LLC, which owns Apple shares.

“The longer people are in the Apple ecosystem, the harder it is for them to switch away,” he said.

Apple shares fell less than 1 per cent to $698.70 at the close in New York. The stock has risen 73 per cent this year.

Apple is vying with rivals including Samsung Electronics Co., HTC Corp and Google Inc’s Motorola Mobility for dominance in a global smartphone market that reached $219.1 billion last year, according to data compiled by Bloomberg Industries. Those manufacturers primarily use Google’s Android operating system, which is the world’s most popular mobile software. Microsoft Corp, which has been working closely with Nokia Oyj, also is introducing a new mobile version of Windows later this year.

IPhone’s Popularity

The benefits of a successful iPhone debut extend beyond Apple. Suppliers including Qualcomm Inc, Broadcom Corp, LG Display and Hon Hai Precision Industry Co., the owner of Foxconn Technology Co., also will see a gain, according to Barclays.

To take advantage of the iPhone’s popularity, some of the first to get in line were there for the publicity.

In what may be the biggest consumer electronics debut in history, more than 200 people are expected to hold places in line for strangers at stores around New York and the San Francisco bay area for the iPhone 5, reported on its Tech Blog. These arrangements were made on the website TaskRabbit Inc, where a user can find workers to do odd jobs such as assembling Ikea furniture or waiting in long lines.

Joseph Cruz, 19, said offered to pay for his iPhone, along with four others in line in New York, if he agreed to wear the company’s T-shirts and wrist bands.

“I’ve just got to wear this stuff for the whole week and they’ll pay for my iPhone,” he said. “I was going to stand out here regardless.”