Stocks soar for Apple with iPhone 4 release

iPhone 4 is in huge demand

Today, thousands of people around the world are queuing up to buy Apple's latest gadget - the iPhone 4 - and as a result, Steve Jobs' company saw its shares shoot up to as much as 2.1 percent.

The iPhone 4 was released first in Japan and is currently being sold in the US, UK, France and Germany. By September, it will be sold in a massive 88 countries. This will be the fastest roll-out of any product Apple has ever made and analysts are predicting huge growth in sales and profits for the company.

Barclays Capital have forecasted that Apple will sell 8.1 million iPhones in the fiscal third quarter ending 29 June and that this will be boosted to 12.1 million in the fiscal fourth quarter as production of the iPhone 4 catches up with demand for the latest Apple product, reported Reuters. 

"We're thrilled to be launching iPhone 4" said Natalie Harrison, a spokeswoman for Apple. "We've seen incredible customer excitement in the US and around the world."

Indeed, queues started forming outside Apple stores in the US and Japan many days before the iPhone 4 went on sale, reflecting the huge demand for the product.

Initial setbacks

Pre-orders for the iPhone 4 began on June 15, and on the first day alone 600,000 devices were ordered. However, Apple and carrier AT&T struggled to meet demand and said their inventory was depleted. According to PC World, the "big rush caused online ordering systems to collapse, leaving potential buyers frustrated and angry."

Pre-ordering then had to be halted, with Apple apologising and claimed that demand for the iPhone 4 was "far higher than we anticipated."

Analysts have cited inventory shortages and overwhelming demand for the product as the two main reasons that sales of the iPhone 4 may not achieve the predicted profits.

In a research note, Barclays Capital analyst Ben Reitzes issued warning words: "Some in the investment community may not grasp the magnitude of these initial iPhone 4 shortages. Supply is likely to be the limiting issue for Q3."

Mr. Reitzes did say, however, that "we believe Apple's production ramp for the September and December quarters is very significant."

Apple's future profits

The first iPhone was launched in 2007 and the four iPhones on the market now represent Apple's main growth driver, accounting for 40 percent of the company's overall revenue, and is Apple's best selling product.

However, although the iPad is still a relatively new addition to Apple's collection of products, the company announced that three million iPads have been sold in the three months since it was launched. It is thought that these huge and largely unanticipated sales contributed to Apple overtaking Microsoft last month to become the world's largest technology company. 
      
The iPad is currently available in the US and six other countries but will be rolled out in a further nine countries next month.

Yesterday, shares in Apple closed up at $3.68, or 1.36 percent.

Related links:

Apple's Steve Jobs defends conditions at Foxconn | Apple is the world's largest technology company | Is the iPad good for business? | iPad delay for wider release | Is Nokia finished in US market? | Is the battle heating up in Silicon Valley?

Like this article? Get the RSS feed: