iPhone 5 Sells Out in Under Two Hours
According to a recent report in AppleInsider, Apple (NASDAQ: AAPL) sold out of its initial batch of iPhone 5's in just over an hour, pushing shiping dates back two weeks. While this isn't a shock to analysts, the sheer speed with which the phones sold out caught investors' eyes, fueling further growth in Apple's share price.
As a comparison, it took a little over 22 hours for the iPhone 4S to sell out of its initial stock, while the iPhone 4 took about 20 hours to sell out. Neither of which even came close to the demand for Apple's newest smartphone offering.
The much anticipated iPhone 5 was announced on Wednesday to an eager media, and an even more eager customer base. Equipped with a 4.5 inch screen and LTE capability, the iPhone 5 brings Apple into the 4G arena for the first time. So powerful is the iPhone's effect on markets that JP morgan (NYSE: JPM) was quoted saying the iPhone release could boost U.S. GDP by as much as 0.5 percent, perhaps making it more effective than the Fed's quantitative easing.
In the same report, JP Morgan projected Apple to sell eight million iPhone 5's in the fourth quarter of 2012 alone. Going into 2013, analysts at JP Morgan expect China's smartphone market to surpass that of the U.S. in size, which holds interesting implications for the firm's strategy going forward.
While the report is great news for investors, Samsung may be seeking to rain on Apple's parade. Following its legal defeat to Apple in its widely publicized patent infringement case, reports have surfaced the Samsung plans to sue Apple using its arsenal of LTE patents and attempt to stop the shipment of the iPhone 5. The prospect of another legal battle has not affected share prices yet, but if Samsung effectively drags the company into another legal battle, one that it may not win, its possible Apple's share prices will take a tumble.
The iPhone is a must have product for carriers, but to make it affordable for their customers, they have to put a large subsidy on the phone. Companies like Verizon (NYSE: VZ) and AT&T (NYSE: T) bank on customers signing two year agreements in order to get the subsidies, and have included the cost into the pricing of their plans. Even so, some analysts worry about the burden that the subsidies place on carriers and wonder if there will be push back in the near future.
Apple has had a fantastic year so far. The company hit its 52-week low in December of 2011 when shares traded at $367.53, but shares have since increased in value over 75 percent.
Following Steve Jobs' passing in 2011, investors panicked that without its visionary leader, Apple would be unable to manage in such a competitive market. With companies like Google (NASDAQ; GOOG) overtaking its operating system in total market share, investors' fears were not unfounded. After delivering a series of excellent earnings reports and highly anticipated product releases, the company and its new CEO Tim Cook quickly managed to prove itself once again to the world.
Shares of Apple rose 0.94 percent in early trading to $689.38.
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