Networking, Supply Chain Issues Dull Apple's Shine

What, Apple, Worry?

Even with the highly public failings on the big launch on July 11, just three days later Apple boasted that it had sold more than 1 million 3G iPhones and customers downloaded 10 million applications from its new App Store during that first weekend. 3G iPhones were still running low or were completely out of stock in many locations in the United States and in the other 20 or so countries where the iPhone was on sale.

And while Apple might have taken a PR hit during the opening weekend considering all the setbacks, Apple reported record third-quarter earnings on July 21, which excluded any new revenues from the iPhone 3G, App Store or MobileMe (which, unlike G-Mail, users have to pay for). Apple's stock price dipped after the launch date but has rebounded to where it was on July 11.

A month after the launch in August, App Store users had downloaded more than 60 million programs for the iPhone, and Apple has sold an average of $1 million a day in applications for a total of about $30 million in sales during the month, Jobs told the Wall Street Journal. Though Apple would not confirm, one analyst stated that Apple had sold 3 million of the 3G iPhones.

On the physical supply chain side, Apple and its provider partner AT&T are struggling to keep up with demand, which could become even direr when Apple begins selling the 3Gs in 20 new countries starting on Aug. 22. AT&T stores, for instance, haven't been able to replenish in-store stocks since the July 11 launch and have a backlog on the devices that is running 13 to 14 days, Computerworld reported. And Apple just announced a new distribution partnership with Best Buy, beginning in early September.

To the CurrentAnalysis analysts, Avi Greengart and Kathryn Weldon, snafus like Apple's recent troubles do not usually have any long-term repercussions, they write in their report, "but this one may have some effects, thanks to the outsized press coverage [that] Apple launches typically command."

"Even the most ardent Appleophiles may choose to wait a week or two before purchasing new products the next time around," note Greengart and Weldon. "This would not only spread out sales, it could actually weaken them; the initial product rush would be less of an event, the PR impact and press coverage would be muted, and thus, Apple's brand would not enjoy quite the same status and some sales could be lost."