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Summary:

After heavy promotion, including a little negative advertising, Verizon launched the Droid over the weekend, and two days later the first sales estimates are in: 100,000. Speaking with Bloomberg, Analyst Mark McKechnie of Broadpoint AmTech thinks that’s pretty good. Noting that Verizon had 200,000 Droids on […]

After heavy promotion, including a little negative advertising, Verizon launched the Droid over the weekend, and two days later the first sales estimates are in: 100,000.

smartphone_sales_launch

Speaking with Bloomberg, Analyst Mark McKechnie of Broadpoint AmTech thinks that’s pretty good. Noting that Verizon had 200,000 Droids on the shelves for launch, he said most stores sold at least half their inventory.

“I see the first few days as encouraging,” McKechnie said. “There seems to be pretty good demand — they’ve taken the right steps and picked a good partner with Google on the Android side.”

While that may be true, comparing the Droid to the iPhone and the Palm Pre during their launch weekends paints a different picture…or chart.

According to Apple, both the iPhone 3G and iPhone 3GS sold more than a million units during their first weekend. Some might argue that’s an unfair comparison, in that both iPhones were available in multiple countries. Both also benefited from the App Store, though that was far more of an advantage for the 3GS. When the iPhone 3G went on sale, there were only 500 apps available, compared to more than 10,000 for the Droid now.

Still, a more fair comparison might be found with the original iPhone, as it too was sold in the U.S. on a single network. However, it should also be pointed out that Verizon has more customers than AT&T, and that the original iPhone was not a 3G device, and that the 8GB model cost $599.

Nonetheless, Verizon’s 100,000 Droids looks pretty good next to Apple’s 270,000 iPhones, except for one thing. That number does not include Sunday sales, which fell on July 1 and were part of a new quarter. It’s very possible Apple sold as many as 400,000 iPhones during that first weekend of lines around the block.

Of course, lines aren’t everything. As Verizon spokesperson David Samberg said to CNET regarding Friday’s Droid launch, “long lines forming outside are flashy,” but the goal is a “a steady stream of people” over days and weeks. Perhaps the Droid would be better compared to Palm’s smartphone, which is estimated to have sold around 50,000 units during its launch weekend.

It’s looks like Verizon may have a “Pre killer” in the Droid.

  1. If Verizon only had 200,000 droids to sell then it was impossible to outsell the iphone. Seems like Verizon never had the intention to compete with the iphone when it comes to launch weekend sales.

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    1. While that’s true, one could also argue that Verizon expected to sell twice as many phones as were sold. Either way, that doesn’t alter the fact that the Droid is competing with the iPhone, and that competition started Friday. Thus far, the Droid appears to be taking a beating, not as bad as the Pre, but a beating nonetheless.

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    2. There is always a bull whip effect and companies stock more than what they estimate.

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  2. Just wanted to point out… neither the iPhone 3G nor 3GS were available in all 70 countries immediately. Both were rolled out week-by-week. The 3G was available in 22 countries upon release and the 3GS in 8.

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    1. Joey, you are correct. That sentence should have been changed to “multiple countries.” I thought I did change it after looking it up, but apparently not.

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    2. THE DROID WAS ONLY LAUNCHED IN 1 (ONE) COUNTRY………………..

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  3. No problemo! :)

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  4. “Verizon spokesperson David Samberg said regarding Friday’s Droid launch, “long lines forming outside are flashy,” but the goal is a “a steady stream of people” over days and weeks.”

    What a poo poo response! You get the “steady stream” of customers by having a fantastic first weekend! It’s called Momentum, but these guys at Verizon have been coddling themselves with excuses ever since they passed on the original iPhone. Verizon has a great network, but they need to reinvent their marketing efforts and the first step would be to let Mr. Samberg go and get someone with testicular fortitude who can deal with a disaster instead of just spinning it.

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  6. I stood in line for the iPhone, then a year later for the iPhone 3G, and returned them both.

    I think I agree with David Samberg. Android or WebOS could completely derail the iPhone’s dominince in the space, but it won’t be with a big flashy launch because they don’t have a huge fanbase that will line up to buy a new product based on speculation. Instead, people will see the phones in the wild, realize that the OS is much more refined than they had realized, get addicted to multi-tasking, then head over to the store to buy one.

    It’s going to be interesting to see smartphone market share by OS by this time next year.

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    1. Justa Notherguy Tuesday, November 10, 2009

      What’s really going to hurt Apple is the inevitable equilibration of price vs perceived quality.

      Android now has a few dozen major corporations on its side, all trying to make it a success. Whatever else is true, the effect of bringing such a wise range of agendas and huge mass of assets – time, brains, money – to bear will be, inevitably, to drive prices down. At some point, iPhone must either compete on price or be relegated to a niche, ‘status’ product…shades of the late 1980s.

      On the other side, we have Apple and AT&T. The latter trades heavily on its US exclusivity, which helps them to resist downward pricing pressures from Sprint & T-Mobile, etc. The former relies – perhaps even more heavily – on high wholesale margins, plus an enviable subsidy deal. Some analysts say that AT&T pays Apple @$20-$25/mo. through 17 of 24 months, in a typical contract.

      I find it hard to see how this profitable arrangement can survive, once customers have access to a ‘good enough’ Android-powered smart phones in the range of $50…maybe even free, with a 2-year plan. What will Apple do, once they can’t count on all that cash-flow. from AT&T? And will other carriers fork over anything similar? Jobs had better hope that his new tablet scores big.

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  7. It seems like the only people who really care about iPhone vs. Droid sales are Apple users who will never part with their brand loyalty. I wanted an iPhone but I didn’t want to switch to AT&T. Now that I have a droid I’m happy. I have a phone that does everything the iPhone does and I didn’t have to leave. If Apple makes a droid killer for Verizon I’ll think about changing phones in two years when it’s time to upgrade.

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  8. Justa Notherguy Tuesday, November 10, 2009

    100K to 200K units looks damn good, when you consider that Droid…

    (1) is manufactured by a faded, moribund hardware company
    (2) sold on a network that’s famous for both a ham-fisted control of handset features and a nickel-and-dime approach to fees
    (3) was promoted for only about 30 days, after Verizon Wireless abruptly switched ad firms in midstream
    (4) stands independent, as a product, with no boost from adjunct positioning within an existing line of products (e.g.: iPod, Mac)

    …plus, perhaps most importantly…

    (5) offers none of the cachet of Apple’s 40-odd year reputation for interesting consumer products.

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  9. I think that iphone is the greatest phone ever. I think that Apple would come out with a new generation of smartphones.

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  10. Does it Matter? Tuesday, November 10, 2009

    Comparing iPhone to Droid sales is like comparing Mac to Acer PC sales instead of Windows. Droid isn’t the iPhone’s competition- Google Android is.

    100,000 Droids sold instead of 1 million iPhones. Who cares?

    How many people went to a Verizon store to see the Droid only to walk out with the cheaper HTC-made Droid Eris? How many people went to a Best Buy and walked out with a Motorola Cliq on T Mobile or an HTC Hero on Sprint because they didn’t really want to change carriers? And how many people who have been thinking about getting their first smart phone now think it’s no longer “Apple or nothing?”

    Apple unfortunately is going into the holiday season without any buzz around their product. Whereas the Droid buzz of the past month is quietly creating sales for the cheaper, lesser Android phones AND on the other carriers.

    The Droid hype, despite who they’re taking shots at, isn’t about winning over iPhone users unhappy with AT&T its about making people about to buy their first smart phone in December know there are lots of options and they don’t have to go to AT&T to get it.

    Also, it doesn’t matter if the iPhone had originally gone to Verizon instead of AT&T. One carrier, no matter who it was, still forces users of the other carriers to switch and EVERY carrier has holes in it’s coverage somewhere.

    Yes people so far have been willing to do this to get the iPhone because it was so much better than anything else, but now that there are “close enough” options that allow users to stay with the carrier they are most happy with (or leave AT&T because they’re unhappy), expect that to change.

    In the past two months, Android has rolled out new phones on 3 of the 4 major carriers in the U.S. with AT&T rolling out Android in Q1 of next yer. Sure the “close enough” solution is still only on one carrier (Verizon) but in a matter of weeks phones that will speed past the Droid (and iPhone) will be on T Mobile, Sprint and even AT&T.

    Apple, however, is locked into just AT&T until Q3 of next year. That’s a long time in the cell phone space. By the time Apple is free to bring the iPhone to other carriers, the Droid will be an obsoleted phone and Motorola won’t even be the #1 Android hardware maker anyone cares about.

    And what Android brings to the table is the ability for users to get phones that meet their INDIVIDUAL lifestyle needs instead of saying, “this is our phone, and here’s how you can use it.”

    Motorola, with the Droid and Cliq, is catering to the people who say we love the iPhone but just want a keyboard.

    Just like Apple, Sony knows how to make elegant hardware and in a few months their 1ghz Android phone will process circles around Droid and the iPhone. Plus, it’s going to be the phone people who want serious camera functionality will buy- over the iPhone and Droid.

    Dell knows how to sell into corporate America far better than Apple or Motorola and they’ll be AT&T’s first partner for Android. If there’s anyone RIM and Windows Mobile should be worried about it’s Dell’s corporate sales force.

    Then you have Acer, who specializes in making consumer grade equipment on the cheap, rolling out a 1ghz Android phone. Do you think a happy Sprint/T Mobile customer is going to jump to AT&T for even a $99 iPhone when they can get a faster Acer phone for free?

    Now, all you Apple loyalist will want to say I’m stupid for daring to question the almightly Steve Jobs, but I sold Apple to the educational market in the 1990’s, so I’ve lived this battle before.

    The difference is Microsoft had no desire to bring anything new or cool to the table- they just made a crappy me-to solutions and sold it on the cheap. Google, on the other hand, has won every battle it’s ever fought through innovation and by being better than the competition.

    The Droid, in my opinion, suffers from being rushed to market to hit the holiday buying cycle, but Google phone, the GPS application, etc are all technologies that say, “innovation” which didn’t come from Cupertino- and that’s not something Apple’s ever had to contend with in the past. If Google continues to improve Android at the rate they have and continues to add in features Apple doesn’t offer, it’s going to be a lot uglier for Apple than the Apple vs. Microsoft battles.

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    1. ProfessionalGun Tuesday, November 10, 2009

      Absolutely 100% on the money with this comment! I’m surprised more people haven’t come to this realization.

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    2. Does It Matter - No Tuesday, November 10, 2009

      Making a lot of presumptions there Does It Matter – A lot of them probably wrong. It’s not the PC wars all over agai, Dell may not matter as the corp IT depts don’t control the new cell tech, individuals make their own choices. Jobs probab;y doesn’t care if Acer eventually enters the market, would rather have profits than pennies, that Android won’t fragment into incompatible hell, and finally that Apple will be standing still through all this.

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    3. ProfessionalGun Tuesday, November 10, 2009

      @”Does It Matter – No” – you’re suggesting some strange presumptions of our own, there. Dell & Acer and any other company that creates Android devices is contributing to the pool of Android users. It’s no question that “individuals make their own choices” – and the choices will be readily available as a result of all these companies stepping into the pool.

      Remember – more Android users leads to a larger developer community which leads to a more robust Android Market which leads to an even better value proposition for consumers.

      We’ve seen that happen in a HUGE way with the iPhone. The difference here is that Android won’t be confined to one device controlled by one company. That’s an important distinction.

      So yes, the logical next question is – how scalable IS the Android OS? Can it handle the huge technical burden posed by supporting a vast array of different devices? . . . That remains to be seen. It will be a very interesting thing to see unfold, that’s for certain.

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    4. …the iPhone doesn’t need to go into the holiday season with a lot of buzz — they just need to make sure there’s enough holiday staff on hand to process purchases in a timely manner ;)

      It’s not really a battle — the iPhone is the standard, it’s what new products are compared to. There’s plenty of market share left over for fringe-OS devices, whether it be Android or Windows mobile — we’ll never have a shortage of gadgetry to play with :)

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    5. @benjitek

      Fringe OS’s, eh? :) I think those are likely to be Nokia’s Maemo, Samsung’s Bada and the dying Symbian OS. It’s difficult to imagine Android & Windows Mobile not being major players right along with Apple.

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