Apple sold its millionth iPhone over the weekend, days after it slashed the price by a third to spur sales. It took just 74 days for the combination cellphone-iPod to hit the 1 million mark, which Apple had said it would achieve by the end of September. By comparison, it took two years for the company to sell 1 million iPods.
The milestone was reached weeks earlier than expected and sent shares of Apple up $4.94, or 3.8 percent, to $136.71. The stock regained some of the ground it lost after the price cut spooked investors as a sign of weak demand and slimmer margins.
Last week, Apple knocked $200 off the price of the 8-gigabyte iPhone, bringing its price to $399, and discontinued the 4-gigabyte version. The price cut may have helped a bit, but Apple clearly was on track already to exceed its own expectations, analysts say.
The swift price cut — not surprising in the cellphone industry but rare behavior for Apple — angered hundreds of early buyers who bought the touch-screen gadget for top dollar. In response to the negative reaction, Apple issued an apology the next day and offered customers $100 credits.
Apple had said it was lowering the iPhone price to attract more customers, in time for the holiday season. The move, which many analysts had predicted -- but not quite so soon -- adds pressure to Apple's rivals, but it also was possibly part of a broader strategy for its entire product lineup.
On the same day Apple slashed the iPhone price to $399, it unveiled a new iPod, also for $399. The iPod Touch is basically the same as the iPhone but without the phone capability. Apple cut the price of the hybrid iPod-cellphone to prevent an onslaught of consumers from abandoning it in favor of the Touch, Tim Bajarin, analyst with Creative Strategies, speculated. "They solved the cannibalization problem with this," he said. (info from The Associated Press)