Sales of new iPhones on pace to beat last year's record

Reuters News
Posted: Sep 14, 2015 8:53 AM

By Julia Love

(Reuters) - Sales of Apple Inc's <AAPL.O> new iPhones are on pace to beat the 10 million units the previous versions logged in their first weekend last year, the company said on Monday, sending its shares up nearly 2 percent.

Apple did not disclose the specific number of advance orders it received. Analysts had expected about 4.5 million for the first 24 hours, compared with 4 million during the first day last year.

The company said it was working to catch up to demand for the iPhone 6S Plus, the larger of the two new phones, which exceeded its forecasts for the preorder period.

"Customer response to iPhone 6S and iPhone 6S Plus has been extremely positive, and preorders this weekend were very strong around the world," Apple spokeswoman Trudy Muller said in a statement. Apple began taking preorders on Saturday for the iPhone 6S and iPhone 6S Plus, which will begin shipping Sept. 25.

After shattering sales records last year with the iPhone 6, Apple has been dogged by questions of whether it can sustain the momentum this year.

Featuring larger screens, the iPhone 6 and iPhone 6 Plus touched off a sales frenzy that led to a 32.5 percent revenue increase in the latest quarter from a year earlier.

While some on Wall Street remain skeptical that the company can pull it off, John Jackson of IDC said Apple’s strong early progress dampened those concerns.

"Apple has this track record of outperforming its own outperformance, but the iPhone 6 looks like an extraordinarily tough act to follow," he said. "The fact that they are fast out of gates with this refresh is a very encouraging sign."

After last year’s redesign, the iPhone 6S and 6S Plus feature more modest updates, such as improved cameras and 3D touch, a display technology that responds according to how hard users press their screens. But Apple executives have stated that only a fraction of users have upgraded to the iPhone 6, suggesting the company has ample room to grow.

FBR Capital Markets senior analyst Daniel Ives said he was encouraged by the response in China, where Apple’s website showed particularly long wait times for the phones.

"It shows that they are off to a white-hot start, with China really being front and center as a main driver of initial demand," he said.

The company’s stock has sunk in recent weeks on concerns about how it will fare amid the downturn in the Chinese economy.

"Hopefully this can start to turn the negative tide that’s been overhanging the stock," Ives said.

Last week Apple announced the phones, as well as a new TV set-top box that responds to voice commands, but the new products underwhelmed many social media commentators and investors.

Apple relies heavily on the sale of its flagship iPhones, which generated nearly two-thirds of its revenue in the latest quarter.

Shares of Apple were up 1.8 percent at $116.24 in morning trading.

(Reporting by Julia Love; Editing by Alden Bentley and Lisa Von Ahn)