Apple sells a lot of iPhone 4s, AT&T Mobility braces for impact

Driven by an insatiable consumer demand for anything “i” related, and apparently overlooking some slight design flaws, Apple Inc. (AAPL) said it managed to sell more than 1.7 million iPhone 4 devices through its first three days of availability, becoming the “most successful product launch in Apple’s history,” according to heady quote from Apple CEO Steve Jobs.
The numbers were more than half the number of iPad’s Apple managed to sell during that device’s first 80 days of availability.
There was no word yet on the number of iPhone 4’s devices sold in the U.S. through exclusive carrier partner AT&T Mobility (T), though Piper Jaffray noted in a report that more than three-fourths of those sold in the U.S. were upgrades and thus would not bolster the carrier’s net customer addition results.
Apple noted that the device is currently available in the U.S., U.K., France, Germany and Japan, with plans to expand availability to Australia, Austria, Belgium, Canada, Denmark, Finland, Hong Kong, Ireland, Italy, Luxembourg, Netherlands, Norway, New Zealand, Singapore, South Korea, Spain, Sweden and Switzerland by the end of July.
RCR Wireless’ features editor Matt Kapko was one of those that braved the lines on launch day spending 10 hours in line at a southern California Apple retail outlet before finally getting his hands on an iPhone 4G.
While there have been widespread reports of device shortages, including the delayed availability of a white model until later next month, AT&T Mobility was set to begin offering the device through its retail locations beginning today. The exclusive domestic home of the device was not on the list of outlets deemed worthy to begin selling the device on launch day.
In support of the new iPhone’s flooding its network, AT&T Mobility said it had increased capacity of its 3G network in the New York City area. The updates included the addition of new carriers to “nearly all cell sites in Manhattan and in other areas as needed throughout the Bronx, Queens and Brooklyn,” as well as adding a “layer” of precious 850 MHz spectrum to support increased coverage. The carrier has been transitioning portions of its 850 MHz spectrum from its legacy 2G network to its 3G service over the past several years in an attempt to bolster the 3G network’s coverage and capacity. The 3G network originally launched using the carrier’s 1.9 GHz spectrum band.
The New York area along with San Francisco are areas where the carrier has acknowledged its 3G network has suffered in the wake of increased consumer demand for mobile data services.
AT&T Mobility recently launched a pilot Wi-Fi project in Times Square designed to alleviate network capacity issues on its 3G network.
Tear down
According to a tear-down report from iSuppli Inc. the iPhone 4 has a build of material cost of $187.51, placing it just ahead of the $166.31 BOM for the iPhone 3G that launched in 2008 and the $170. 80 for the 3GS model launched in 2009, but well below the $217.73 iSuppli reported for the original iPhone that launched in 2007. AT&T Mobility sells the iPhone 4 at a subsidized price of $199 for the 16 GB model and $299 for the 32 GB model.
iSuppli noted that the iPhone 4’s screen represented the single most expensive component of the device carrying a price tag of $28.50, or just over 15% of the total BOM. The firm noted that the screen was provided by either LG Display or Toshiba Mobile Display. The device’s embedded memory, which in the device torn apart by iSuppi was sourced from Samsung Electronics Co. Ltd., accounted for $27 of the BOM.
Other suppliers and costs noted in the tear down included $13.80 for the Samsung supplied 4 Gbits of mobile double data rate SDRAM; an Infineon Technologies AG supplied baseband integrated circuit valued at $11.72; and $10.75 for a Samsung manufactured A4 applications processor that uses Apple’s intellectual property.
Other companies with their names on components included Intel Corp., STMicrolectonics, Dialog Semiconductor, Broadcom Corp., Texas Instruments Inc., Cirrus Logic and AKM Semiconductor Inc.