Sales posts

According to MacDailyNews, shoppers who placed iPad pre-orders this morning are being told by Apple Store employees that demand could affect their plans for in-store pickup.

It seems that several customers ordered iPads this morning, opting for at-home delivery. For whatever reason, they later changed their minds and opted for in-store pickup. That's when things got tricky.

When requesting the switch, those customers are being told that their existing orders will have to be cancelled and new in-store orders placed. However, the employees warn, demand for the iPad has been so "overwhelming" today that they can no longer guarantee that an in-store pickup order will be available on April 3rd if placed at this late hour.

As of this writing, the online Apple Store notes that Wi-Fi iPads ordered today will be able for pickup at Apple Retail Store "...between 9:00 a.m. and 3:00 p.m. on April 3."

In other words: Selling like hotcakes.

For the last panel of GDC 2010 day two, David Whatley of Critical Thought took the stage to talk about the App Store success he found with his games geoDefense and geoDefense Swarm, and almost dared other iPhone developers to follow his "guaranteed plan" to go from "zero to Time Magazine." He's got quite a background in the trenches of coding and game development, having designed and run online mulitplayer games for over a decade with his "day job" at a company called Simutronics, but he decided to take to the iPhone in his spare time both to learn the platform and see what he could do with it.

First things first, he said, to make an iPhone game, you've got to figure out your goals as a business. He talked about the potential on the iPhone in terms of millions of dollars, but of course, since "99.9% of businesses on the App Store make no money," it's much more likely that if something goes wrong during development or something doesn't click right, the money will drop down to just "a few bucks." It's a balance of costs (which he relabeled as "risks") vs. revenue -- it's very easy, he said, to make money on the App Store, but the issue most developers have is that they let costs get away from them by having too big a team or by investing too much development time, and that comes straight out of their bottom line.

Julian Farrior hosted a panel here on day two of the 2010 Game Developers' Conference here in San Francisco, and he told a room of press and developers about his last year in the App Store. He had attended last year's conference with a partner while considering starting up an iPhone company, and that idea became Backflip Studios. Since the company was founded in April of 2009, they've gotten five apps in the top five, and made (Farrior said he'd be honest, because it was more interesting) $2.5 million in revenue so far.

He revealed that a full $1m in that actually came straight from ad sales -- he's made deals with AdMob and other companies to put ads in his popular Paper Toss app, and he uses those ads both for straight revenue, as well as to promote his own games (more on that later in the talk). Farrior offered up a frank and honest look at what it was like to run an iPhone app company for a year.

Sure, Apple will sell about a gajillion iPads when the device finally releases on April 3rd, but analysts are saying that's not all -- apparently 30% of the revenue from the device itself is expected to be from the sale of content read, listened to, watched, or otherwise consumed on the iPad.

Brian Marshall with Broadpoint.AmTech calls the touch tablet's media strategy "sticky," and says that the App Store is nothing compared to the kind of market for media that the iPad will create. He says that we might even see 7 million iPads sold in the first year, which is a number that's much higher than other estimates. But Marshall also says that when people actually get their hands on the device, they'll be sold -- there's a lot of "naysaying" going around that will be answered, he believes, with a hands-on test.

As I said on the talkcast, I agree -- I think the iPad's real selling point will be how it actually feels and works in your hands, and considering that very, very few people have had that experience so far, it's no wonder there's still so many doubters. I do think that content will be huge on the device, though that's a no-brainer -- even Apple has pointed out that it's basically a device designed to let you sit on your couch and consume media.

At the same time, playing with the iPad won't make it magically grow a camera or lower the price, or fix any of the other objections that people have had. Marshall's guessing big numbers, but then again, that's his job. The rest of us will have to wait and see what the usage (not to mention the actual content deal Apple gets) is actually like.

At long last, Apple and China Unicom Ltd. are working to introduce Wi-Fi-enabled iPhones to China.

The iPhone has failed to thrive in China, due in part to an active black market and the Golden Shield Project (GSP), which censors certain Internet content. To comply with the GSP, devices that include wireless Internet have been required to use China's own WAPI standard. Meeting that requirement forced Apple to re-design the iPhone for China.

In the meantime, a change in policy permitted devices to have both WAPI and Wi-Fi, but by then it was too late, and the 1st round of re-designed iPhones were released in China without Wi-Fi.

Now, Unicom Chief Executive Chang Xiaobing says that iPhones with Wi-Fi will be made available to his company's customers. He didn't announce when that will happen, but did suggest that existing customers (without Wi-Fi) will be compensated, perhaps with expanded use of Unicom's high-speed 3G network.

Unfortunately, this probably won't send iPhone sales soaring. There's still a powerful black market to contend with and less expensive iPhones in Hong Kong.

[Via Silicon Alley Insider]

The latest MacHeist countdown has finished and, after a few tense moments as they got their ducks in a row last night, the new bundle is ready for sale.

This year's "nano bundle" includes the following apps at an incredible discount:

1. MacJournal
2. RipIt
3. Clips
4. CoverScout
5. Flow
6. Tales of Monkey Island
7. Rapidweaver

That's more than US$260 worth of software for a mere twenty bucks. Note that Tales of Monkey Island and Rapidweaver are the "Unlock Apps." That is to say, they'll become available once certain sales milestones have been reached; Monkey Island will go on sale once 50,000 bundles have been sold, and Rapidweaver after that.

I tend to buy software as I need it or as I realize that I've been using it for a while without sending off some cash to the developer. When participating in these "event" sales, I tend to forget that I ever downloaded the stuff, often being surprised at finding the software thus acquired in my /Applications folder. Your mileage will, of course, vary. For some of you out there in reader-land, this bundle may turn out to be the best thing since, I dunno, sliced bread or Wheatabix or citizen band radios or whatever, for you.

So if you're a bundle kind of person, Woo Hoo! The stuff is here (or at least, nearly here.) Here's hoping there are some goodies for you, this go 'round that will enhance your day-to-day Mac use and bring some joy into your software life.

Via our Christina W., whom we miss

Obama Pacman has done the math, and they claim that the 10 billionth song download on iTunes (which Apple is paying out a $10k gift card for) is going to happen today, February 24th. So if you've been waiting to buy some music, today's the day to do it -- go pick up some songs in the early to late evening, and you might end up being the lucky winner.

Plus, contest aside, this means Apple will have sold 10 billion songs on their store. That's an incredible number, and it's a number that has changed this industry for sure. Fortune's Brainstorm Tech blog has a nice short look at just what that means for the store itself, including the fact that the store is now making over $520 million a quarter (even though Apple says that it's only slightly profitable for them, as they're more interested in hardware than content) and that the Black Eyed Peas have two of the top 20 best-selling songs of all time, the first and the third.

Pretty incredible achievement for Apple, and with the iPad on the way, I'll bet the iTunes store will only get busier. We'll keep an eye open for the official announcement this evening. Good luck if you're trying for the prize!

Using an iPhone in the cold presents a quandry. You don't want to freeze your fingers, but gloves make the touchscreen difficult to use. Unless you've got Dots Gloves.

Or sausages.

In South Korea, CJ Corporation noticed a sharp increase in sales of their frozen sausages. Not because they're especially tasty, because cold commuters have discovered that they make an effective iPod stylus. It seems that they're electrostatically compatible with the iPod's touch screen, and nearly as effective as using a human finger.

Here's a Google-translated story on the phenomenon from a Korean newspaper (the translation into English is quite poor, but you'll get the idea).

I don't know about you, but i'll be buying a box of Jimmy Deans this weekend.

[Via Daring Fireball]

Market research firm NPD Group has published its annual report profiling the consumer retail sector for 2009, and guess who made the list of top five electronics retailers? Hint: If you guessed the Microsoft Store, you would be wrong, and everyone would be pointing and laughing at you right now. No, I'm talking of course about Apple, who came in at a respectable number five, alongside such industry stalwarts as Best Buy, Walmart, Target, Amazon, and Dell, to name a few.

While the report primarily details consumer spending trends throughout 2009, as well as other dry and boring data interesting only to bean counters and TUAW's own Mike Rose (because he loves numbers and cheats at poker), NPD's study does show some growth in Apple's favor, lifted no doubt on the back of iPhone's popularity. Especially when you consider that their competitors sell many, many brands, and Apple sells just their own product line, their achievement is that much more impressive.

In other news, 98% of people surveyed in my own study find Apple to be awesome. And lest you question my sample source, I will reply that the TUAW staff are an excellent focus group for conducting such studies.

Warner Music revealed on Tuesday something we've all long suspected: music sales have witnessed a growth slump on iTunes since the record labels pushed Apple to implement a variable or tiered pricing model. As a result, consumers have slowed their spending habits of media on iTunes, making fewer purchases and fewer Miley Cyrus downloads -- I'm ok with that part in fact.

The cause of decelerating sales can be attributed the associated price hike in new or premium content, which received an unpopular 30% cost of living increase from $.99 to a more salty $1.29 price point. It turns out that people are reluctant to pay thirty cents more today for something that cost a buck yesterday. What is it with you crazy people and your fickle spending habits?

This decline in spending is beginning to eat into Warner's bottom line, where iTunes makes up the majority of its digital revenues. The company saw a 50% decline in revenue in their December quarter, at just 5% growth -- down from 10% in the previous quarter. Ouch! Note to businesses everywhere: This is what happens when you issue a price increase in the middle of a recession. We'll have to see if the record companies take a hint and reconsider their pricing at all.

Apple is now the world's third largest smartphone producer, coming in behind Nokia and Research in Motion. IDC's latest report from its Worldwide Quarterly Mobile Phone Tracker cites continued interest in the iPhone and Apple starting to offer the device in China as major driving forces behind the growing dominance in the smartphone world.

Apple shipped 25.1 million iPhone units in 2009, 8.7 million of those in the fourth quarter. By comparison, Nokia shipped 67.7 million device units throughout the year with 20.8 million in the fourth quarter alone. Manufacturers Motorola and HTC round out the top five smartphone makers. It's worth noting that while Apple still trails RIM and Nokia by unit sales, by some estimates the company already surpassed Nokia in Q3 of 2009 by generating more profit from handset sales than any other manufacturer.

A similar report released by AdMob at the end of January also shows the increasing use of the iPhone around the world. The amazing thing is that Nokia, RIM, Motorola and HTC all produce multiple devices while Apple has leapfrogged over into its position with just a single flagship phone, the 3GS. Motorola, which had fallen off the top five list in the past year, scrambled back onto it with the introduction of the Droid. Google's now entering the market, and Symbian is still very strong in Africa and Asia. It'll be interesting to see how Apple fares against these smartphone competitors in the next year.

[Via Wired]

Looks like they might. That's the opinion of a note out last night from Credit Suisse quoting meetings with Apple executives. The Wall Street Journal this morning quotes Senior Analyst Bill Shope as saying "While it remains to be seen how much traction the iPad gets initially, management noted that it will remain nimble (pricing could change if the company is not attracting as many customers as anticipated)."

This is a similar situation to the original iPhone launch in 2007, where the original price quickly dropped US $200 from the original $599 retail. Agitated early adopters got a $100 Apple store credit from Apple.

Apple will be watching sales of the device carefully in the early days, and the company appears to have enough margin built into the iPad to take some hits if it is slow moving.

On the other hand, if the iPad blows the doors off Apple stores in sales, don't expect any discounts soon.

In addition to their Quattro Wireless buy last month, Apple has picked up two more new employees that seems like additions to an incoming mobile advertising business. Theo Theodorou was picked up from Microsoft's mobile advertising sales department and will head sales in Europe, the Middle East, and Africa. And Todd Tran, from mobile ad agency Joule, will serve as general manager in Europe.

Apple hasn't announced exact details of what they plan to do with all of this mobile advertising, but they did say in the conference call last week that they plan to use their Quattro Wireless acquisition to help app developers make money, especially on free apps. We don't yet know the exact specifics of that plan ("iAds," coming soon to an App Store near you?), but it looks like Apple is making a significant investment in putting mobile ads on their devices.

Some people hate it, some people love it and some people attempt to predict its future.* Members of the last group include Shaw Wu of Kaufman Brothers and Needham's Charlie Wolf, both of whom are cautions about the iPad's performance.

Wu brandishes the obvious like broadsword, noting that the Wi-Fi iPad will probably sell better than those with a data plan because it will cost less and that 3G users can expect slower speeds that those with Wi-Fi. He feels that Apple's prediction of 10 million units sold in 2010 won't be realized. Instead, Wu surmises, they'll sell about 5 million.

Kaufman holds that the iPad is "...not a revolutionary product" that won't take off without certain 3rd-party solutions, like books and customized iPad apps. His sales prediction is even more conservative than Wu's at 4 million units sold.

They both like the entry price however, and we agree with them there. When the pundits were saying $1,000 before the announcement, we knew that wouldn't jibe with Steve's ambition to get one in as many homes as possible. Wu notes that the displays alone may be costing Apple $100 each, yet they've been very aggressive with the pricing.

Here's my prediction: Apple will sell a mountain of these things and by this time next year, the nay-sayers will be downloading Humble Pie 1.0.

*But none have USED it, so let's keep that in mind.

I thought Apple sounded a tad bit defensive about China on the conference call Monday, but Morgan Stanley analyst Katy Huberty says there's nothing to worry about: she expects Apple to sell up to four or five million iPhones in China per year. Apple told us on Monday that they've activated about 200,000 iPhones in China so far, but Huberty claims that there's a market for maybe 50 million iPhones over there, and echoes Tim Cook's assertion that price is the main issue. "Hardware pricing, service plan pricing and the large up-front payment," she says in her report, "were cited by 85%, 66% and 56% of respondents respectively, as reasons they were not likely to purchase an iPhone."

Keep in mind that the four to five million figure is a top end -- in the first year, Apple has said that they're aiming for more like one or two million. But there is definitely a solid market to be found in China, and significant sales there could help buoy Apple earnings reports over here for sure.