When I tried to get a Nintendo Wii last year, it was not an experience I would wish on anyone else. Every store I could think of was sold out: Wal-Mart, Best Buy, Circuit City, GameStop, Toys R Us, and many more. You couldn’t find a Wii online; you couldn’t find a Wii in person. It took 18 months for supply to catch up with demand for Nintendo’s wildly popular entertainment system. As a matter of fact, I was at Target yesterday and saw two Wiis on the shelves ready to be purchased. The iPhone 3G is a little over one week old and, already, it’s sold out nationwide in the United States after going on sale to over 20 countries on July 18th. The IDG News Service recently published an article that was featured on Yahoo! discussing the market that’s unfolded for the popular new gadget on eBay.
You’ve all heard of eBay. After all, where else can you find autographed Brett Favre jerseys auctioned off right alongside of people’s souls? From toys to gift certificates to tickets, eBay has become the center of the live auction universe. Lately, the website has hosted a flurry of sellers trying to unload iPhones and buyers looking to cough up unheard of amounts of money for a telephone. In the first weekend, the 3G sold one million units, prompting a worldwide shortage of it. Apple simply can’t produce enough iPhones to keep pace with its incredibly high demand, similar to how Nintendo struggled for a year and a half to roll out enough Wiis to satiate the market’s appetite.
The article notes that the 16 GB iPhone is selling for four figures, on average, on eBay. One bid, it notes, was $2,300 for just one iPhone (and that doesn’t even include the cell phone provider service or any other bells and whistles). Last year, Apple sold just over 250,000 iPhones when they first went on sale, so it’s easy to see why demand estimates might have been a little low.
The article notes, “The sellers are advertising the iPhones as ‘unlocked’ to work with any carrier, also providing a link to a recent hack issued to unlock the iPhone.” Meanwhile, Apple’s stock took a beating on Monday, with shares falling by over 10%. Why, you ask, would shares of Apple be plummeting despite the company selling one million iPhones? It’s because Apple predicted slower revenue growth in the fourth quarter of 2008, projecting $1 per share in earnings and $7.8 billion in sales. Yahoo! Finance notes that this is well short of the $1.24 per share and $8.32 billion in sales that Apple was predicting.
An analyst for American Technology Research, Shaw Wu, stated in an interview with the Associated Press that “The stock is plagued by high expectations. Looking at the numbers by themselves, they are actually quite strong.” Third quarter earnings skyrocketed by 31%, leaving investors happy for the short-term, but questioning Apple’s slow sales growth in the fourth quarter and in the long-term. Questions surrounding CEO Steve Jobs’ health have also come into question. However, Chief Financial Officer Peter Oppenheimer told the AP, “He has no plan to leave Apple. Steve’s health is a private matter.”
Looking at eBay right now, prices range between $700 and $1,000 for iPhone 3G units. Those offering “Buy it Now” options are anticipating receiving $1,000 for each iPhone.