Apple Sells 1 Million New iPhones

Apple Inc said on Monday it has sold 1 million new iPhones in its initial weekend, on par with estimates set by analysts, sending its stock rising more than 2 percent.

The original iPhone, introduced in late June 2007 in the United States only, sold about 270,000 units in its first two days. Sales topped 1 million by early September. The new device sells in 21 countries.

Apple executives were pleased with the early results.

“iPhone 3G had a stunning opening weekend,” Apple Chief Executive Steve Jobs said in a statement. “It took 74 days to sell the first 1 million original iPhones, so the new iPhone 3G is clearly off to a great start around the world.”

Steven Hodges, President for the Northeast region for AT&T Inc, Apple’s only U.S. carrier partner, would not disclose how many iPhones it sold but said it would be AT&T’s key device for the holiday shopping season this year.

“It’s definitely in the center of demand,” he said at the operator’s holiday phone showcase in New York.

Still, iPhone sales pale compared with those of established mobile phone makers, such as Nokia Oyj, which sells almost 10 million phones a week, or Samsung Electronics Co Ltd and LG Electronics Inc, which each ship more than 100 million a year.

While those phone makers often unveil dozens of models a year, Apple has only one, and its sales spark a retail frenzy as consumers around the world line up to grab one.

In addition to the phone sales, Apple’s new App Store, the online store for third-party iPhone applications, is also off to a rousing start, racking up 10 million downloads over the weekend.

Apple’s addition of support for corporate e-mail pits it more directly against Research In Motion, the maker of the wildly popular Blackberry e-mail devices. While big firms are not moving en masse from Blackberry so far, many are at least looking at the iPhone as an alternative, according to Damian Goldstein, an AT&T enterprise specialist.

“They’re more open to it,” he said, adding that most companies are at least getting a few iPhones to test.

The iPhone 3G still has the popular touch screen, but also offers a faster wireless network and the ability to download third-party applications such as games.

Perhaps more important, the new iPhone sells for about $200 in the United States, about one-half the price of its predecessor.

“We don’t yet know the breakdown of how many phones were sold to new customers and how many existing iPhone customers upgraded, but regardless, sales during the first weekend were very impressive,” said Jeff Kagan, an independent telecommunications analyst, in a note.

Analysts said iPhone sales may dent sales and profit margins at Samsung and LG this year.

Activation problems marred its U.S. launch on Friday, with many buyers leaving stores frustrated that they could not use the hotly anticipated gadget after waiting in line for hours.

AT&T Inc, the sole U.S. carrier for the iPhone, blamed problems synchronizing the phone with Apple’s iTunes online music and software store, saying it was probably caused by too many people trying to access iTunes at the same time.

Analysts expect Apple to exceed its original target of 10 million iPhones by the end of 2008.

“The iPhone 3G launch was clearly not as smooth as last year’s launch. However, demand was clearly strong across the U.S.,” said Morgan Keegan analyst Tavis McCourt in a note to investors.

Apple shares closed up $1.30, or less than 1 percent, at $173.88 after earlier hitting a session high of $179.30.

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