iPhone hits the UK – and boosts Apple’s profits

Tonight at 6.02 pm

Its here.

And I gotta have it. Now. I got it. It truly is a thing of beauty. Super easy to set up and use. Seamless integration of your contacts and the phone. Built in iPod. And photos. Lovely.

So I’ve just cancelled my Vodafone contract, which cost me a lot as it has 12 months more to run (I really am an Apple-aholic). But there is no way I’m waiting a year to get my hands on this beauty.

The European launch looks set to add momentum to Apple’s already strong growth, who reported eye-popping 4th quarter results (Jul-Sep). These results suggest that the iPhone doomsayers, of which Laura Ries and her dad Al have been the most vocal, were way off the mark. And you, dear readers, were right. In our blogpoll, the majority of you predicted the iPhone would be a hit, with year 1 sales of 5 million+.

iPhone sales since June 29 launch are 1.3 million. Its already the 4th best selling phone in the USA. And the US wireless network AT&T reported record new subscriber additions of 2 million, up 47% vs. YAG! And get this…40% of the iPhone subscribers were NEW to AT&T.

The Ries duo may also have to eat a big slice of humble pie each when it comes to their predictions that the iPhone would damage the core iPod and Mac businesses: "The iPhone is a distraction not an opportunity for Apple. A novelty
product built on the technology whims of Jobs" Laura moaned. Well, total Q4 Apple brand sales were up + 28% to $6.22 billion. Mac sales were up 34% and iPod sales up 17%.

Now, damaging the core is a valid concern with extensions that are i) small, ii) not dramatising the core brand idea. But the iPhone is a "Hero extension": building the brand, and growing business. It also has a magnetic effect at drawing new people into the Apple store online and on the high street, including new Apple consumers. A whopping 50% of Mac buyers in Q4 were 1st time buyers.

A great example that the best way to build a brand is to build the business.

Now, I have to go and queue!