Apple Inc. (AAPL) stockholders have reason to be excited about the impending release of the iPhone 4, the latest model in Apple’s line of popular smartphones. AT&T (ATT) released a statement on Wednesday afternoon revealing that they were completely sold out of preorders for the device and that any further preorders would not be filled until after the June 24 release date. While some iPhone 4 units will be available for walk-in customers at select retailers, any preorders made after June 15 will not be honored until anywhere between June 25 and July 14.
While this is bad news for tech gluttons looking to guarantee they have an iPhone 4 come next Thursday, it’s great news for Apple investors. AAPL stock is cruising above $271 a share as of this writing, just shy of a new 52-week high. This is a good indicator of investor faith in the iPhone 4′s momentum going into the increasingly competitive smartphone market.
Over 600,000 preorders were filled by AT&T before the smartphone service provider ceased taking more. Preorders surged not only because of interest in the new tech revision, but also the incentivized pricing structure for existing AT&T customers. Previous iPhone users with AT&T contracts set to expire in the next twelve months can pick up an iPhone 4 for $199 or $299 for the 32GB model.
Demand for the device was so high that the traffic to the iPhone 4 preorder page crashed AT&T’s servers. Disgruntled customers also reported experiencing some disturbing glitches on AT&T’s preorder website, namely their personal information could be seen by others visiting the preorder page. AT&T quickly responded that they could not replicate the reported glitch themselves. Apple assured customers they would still be able to walk into Apple’s own line of retail outlets to purchase an iPhone 4 on June 24th, as well as at RadioShack (RSH), Best Buy (BBY), and Walmart (WMT) stores. (Read more about how the Walmart iPhone launch is the first ever of its kind)
Apple’s iPhone line of smartphones has been losing some ground to competitors in the past year, particularly Motorola‘s (MOT) Droid phone, which runs on Google‘s (GOOG) Android operating system. Smartphone users have flocked to Droid phones for specific features not featured in the iPhone, particularly Google-based cloud computing features that link owners’ Google calendars, documents, and Gmail accounts easily into their Android-based devices. Apple received some criticism when the iPhone 4 was announced earlier this month as it failed to match these features. Apple has also come under fire for maintaining its exclusivity agreement with AT&T as a service provider for iPhones. AT&T has notoriously spotty coverage in urban centers where the majority of iPhone users are located. Many consumers are holding off on purchasing iPhones in hopes of support for service providers like Sprint (S), Verizon (VZ), and Deutsche Telekom’s (DT) T-Mobile.
Apple’s new iPhone looks to be a sales success from these preorders. Investors would do well to keep both eyes on Apple stock this summer.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.