Apple sells 9M new iPhone 5s, 5c models in debut weekend

As long lines and short supply of the new iPhone 5s seemed to indicate on Friday, Apple (NASDAQ:AAPL) said it sold a record 9 million units of the iPhone 5s and lower-priced iPhone 5c during the new models' debut weekend. Apple did not provide a breakdown of sales between the two new models.

Apple also said that more than 200 million devices are now running iOS 7, which the company said is "the fastest software upgrade in history." Apple released iOS 7 on Sept. 18.

After announcing the 9 million sales figure, Apple also slightly increased its financial expectations for its coming quarter. The company said it now expects total company revenue for the fourth fiscal quarter to be near the high end of the previously provided range of $34 billion to $37 billion. The company also said it expects gross margin to be near the high end of the previously provided range of 36 percent to 37 percent. The news sent the company's stock up slightly to $484 per share.

Apple had indicated Friday that demand for the new phones had been "incredible," and the sales figures seem to back that up. The figure easily surpasses the 5 million units the company sold on the debut weekend of the iPhone 5 in 2012. Having two new models likely helped, as did the fact that Apple launched the new iPhones in China at the same as it did other early markets, a first for the company. The weekend sales figures bested even the most optimistic estimates of financial analysts and suggested that despite the incremental improvements of the new models, demand is still extremely strong.

One of the most notable new features on the iPhone 5s is a fingerprint scanner built into the new phone's home button. The feature, which Apple calls Touch ID, scans a user's sub-epidermal skin layers and can read any orientation of the finger, according to Apple. Users can simply touch the iPhone 5s' home button to unlock the phone and make iTunes purchases. The iPhone 5s runs on Apple's new A7 processor, a 64-bit chipset. Apple said the chip will allow the phone to run more quickly, giving it the computing power of low-end desktop computers. The iPhone 5s will still run older, 32-bit apps.

Meanwhile, the 5c is made of a hard-coated polycarbonate material, with casings in green, white, blue, pink and yellow. Apple has said the battery on the iPhone 5c is slightly larger than the one on the previous iPhone 5.

In a statement Apple said that demand for its iPhone 5s model has exceeded the initial supply, and many online orders are scheduled to be shipped out in the coming weeks. The new iPhones are available in the United States, Australia, Canada, China, France, Germany, Hong Kong, Japan, Puerto Rico, Singapore and the United Kingdom. Apple has said the phones will be available in 100 countries and 270 carriers by the end of the year.

Apple is selling the 16 GB iPhone 5c for $99 and the 32 GB version for $199 when coupled with a two-year contract. On a no-contract basis, however, the phone costs $549 for the 16 GB model and $649 for the 32 GB model. Many analysts had expected the iPhone 5c to retail for $400 to $500 on an unsubsidized basis, and were shocked that the ultimate price was not lower.

"We never had an objective to sell a low-cost phone," Apple CEO Tim Cook told Bloomberg Businessweek last week in explaining the company's strategy. "Our primary objective is to sell a great phone and provide a great experience, and we figured out a way to do it at a lower cost."

The iPhone 5c prices are only $100 lower than the higher-end iPhone 5s, which retails for $199 for the 16 GB model, $299 for the 32 GB model and $399 for the 64 GB model, all with a two-year contract. On an unsubsidized basis, the iPhone 5s sells for $649 for the 16 GB model, $749 for the 32 GB model and $849 for the 64 GB model.

For more:
- see this release
- see this Apple SEC filing
- see this The Verge article

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