AT&T's iPhone Report Pushes Down Apple Stock

The day before Apple Inc. is to report quarterly earnings, the company's stock price slipped by about 3 percent after partner AT&T Inc. revealed that it had activated only 146,000 iPhones in the first two days the device was for sale.

As of midday Tuesday, Apple's share price was down US$3.97, or 2.76 percent, to $139.73.

In its second fiscal quarter, which ended June 30, AT&T said it had activated 146,000 iPhones. The Apple smart phone went on sale Friday, June 29.

That number differs dramatically from estimates posted by financial analysts the week after the iPhone debut. Piper Jaffray & Co. analyst Gene Munster, for example, pegged sales at 500,000 units during the opening three-day weekend, more than triple what AT&T said had been activated. Other analysts have more recently said that Apple probably sold 450,000 to 500,000 iPhones in the quarter that ended June 30.

AT&T characterized sales of the iPhone as "robust" and said that store traffic remained at historically high levels into July. More than 40 percent of the first wave of iPhones were sold to new AT&T subscribers, the company added.

Although some iPhone buyers reported major delays in activating their new phones over the debut weekend, most were able to switch on almost immediately. Still, some analysts continued to speculate that the activation muck-up could explain the difference between the number AT&T reported and the more-optimistic sales estimates.

"While some have suggested disappointment with the iPhone number, we note that there were significant activation problems for the first couple of days postlaunch, which may have held the number down artificially through quarter-end," Christopher King, an analyst at Stifel Nicolaus & Co., told Forbes.com Tuesday.

Apple will release its third-quarter earnings report on Wednesday at 5 p.m. Eastern time, and it will presumably spell out its own iPhone sales figures at that time.