Is the iPhone that gratifying? (and some revenue analysis of Apple and AT&T)

I the iPhone that appealing? Here’s some images of folks that just got theirs. For some it was like winning the lottery. Apple employees were clapping and congratulating users, some folks were more interested in their iPhones than meeting the real Steve Jobs.

The experience watching others get theirs was amazing, it was certainly a media frenzy. Everyone was trying to get their brand into the moment, and everything that was happening was mirroring online in mere minutes or seconds. Real time media is being created not just be the large TV station trucks, but also by the participants themselves.

I usually post more meaningful posts regarding the web, but the sheer amount of events this week has thrown me for a loop, there is just so much happening that I’ve a hard time keeping up with it all. You’ll notice that I’ve published several times a day, pictures and all.

How much revenue was generated?

Revenue for Apple? If there were 500 phones sold (we estimate from boxes) at this Palo Alto store, at the average cost of $500 (low end 4GB), plus any other sign up fees the store would have made $250,000 in a few hours.

Revenue for AT&T? Add the AT&T plan of $79.99 (second lowest out of five plans) times 500 phones would be $40,000 dollars for the first month, (plus any activation or switching fees) and then every month after. That’s $480,000 of service revenues from just that Palo Alto store.

iTunes: One of the smartest things was the forcing of users to iTunes homepage to activate, that basically forces users through ANOTHER store. Comscore reports that “The iTunes Store attracted 20.8 million unique visitors in November 2006, up 85 percent from November 2005”. I’ll guess the average users spends $200 a year on media, so $100,000.

Accessories: I’ll take a guess that the average amount of accessories spent on an iPhone are $100 over the next 1 year for the average user. So that’s $50,000.

Let’s not forget the Media and buzz that was created from this event, I don’t even know how to start to calculate that, all I know is that Paris Hilton is probably jealous. I just did a “google fight” and iPhone beat Paris Hilton. Or the man that tried to swipe Stephen Levy’s phone.

Total estimate of Palo Alto store revenue of 500 iPhones?
Keep in mind, this is just one store of many, and just on one day, there will be many other iPhones bought on other days.

+$250,000 (iPhone and activation with AT&T)
+$480,000 (At&T ongoing service of 12 months)
+$100,000 (iTunes estimate)
+$50,000 (accessories)

=$880,000 in total revenue for Apple and AT&T in 12 months from last night’s sales of the 500 phones sold.

This doesn’t include any media buzz that was created.


Video: Guess who was first and second in the store? This was just a glimpse of the hype, when people came outside of the store they were patted on the back, the media would swarm them, (Patrick Scoble had over a dozen cameras on him, he’s really turning out to be a media sensation) folks acted like they won the lottery. A lottery they paid for.

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  • It is certainly crazy. Wish i could have been there as well to witness this launch. And nice photos of the ladies there. 😉

  • This wasn’t a ‘geeks’ only event, there were all types.

  • Tim

    Monthly cost for plan of $79.99 times 500 phones is $40,000 dollars for the first month — not $400,000. Total revenue for PA store goes down accordingly. 😉

  • Jeremiah – thx for the constant coverage. I still get goose bumps watching the count down!

    Wow! so wish I was there. Even after watching about 10 hours of live stream from Zooomr is nothing compare to you all who were there.

    Scoble was on front page of SJ Mercury this morning!

  • Thanks for your great coverage Jeremiah.

  • Thanks, that great camera work was from Vera, who got ‘elbowed’ and that’s why the camera got shook.

    yes the energy level was HIGH!

  • Tim

    I’ve updated the numbers.

    I found out there were 1000 phones at the store, so this could easily have been doubled.

  • It was interesting to watch the streaming live on Friday, and then in contrast our local news media report that it will be a few years before the option is even available in the Midwest. (Saves us from the lines maybe?)

    Wouldn’t it seem prudent that if you’re going to market a product to make sure that it was possible for all to use it – everywhere? Although I’m trying to buy a Wii for my daughter & that’s a challenge all in it’s own too. Both are saving us $$$$’s though! 🙂

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  • Jeremiah, it was great having you at the Apple Store with us crazy iPhone fanatics. I’ve been loving my iPhone.

    With the $100 store credit early customers are getting, Apple Stores seem likely to get an even bigger boost really soon (perhaps just in time for Leopard).

  • Kevin, it was a pleasure being with you too, you were pretty hard core to sit in that line!

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