Apple Poised to Sell 10 Million IPhones in Record Debut

Apple Inc. (AAPL) is poised for a record iPhone 5 debut and may not be able to keep up with demand as customers lined up in Sydney, Tokyo, Paris and New York to pick up the latest model of its top-selling product.

Global sales started at the Apple Store in Sydney’s George Street at 8 a.m., as about 500 people waited to buy the device. Sales also began in Japan, Hong Kong, Singapore, Germany, France, the U.K., Canada and the U.S. today. With a new wireless contract, the device costs $199, $299 and $399 in the U.S., depending on the amount of memory.

Keenen Thompson, 22, waited in line for three days to be among the first to snag an iPhone at Apple’s flagship store on Fifth Avenue in New York.

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“It’s extremely exciting,” said Thompson, who works in fashion media. “It’s more about the experience and all the people I met and got to hang out with. We decided we might come stand in line even earlier next year.”

The crowds reinforce estimates from analysts that the iPhone 5 will be the largest consumer-electronics debut in history. Apple may sell as many as 10 million iPhones during the weekend sales rush, according to Gene Munster, an analyst at Piper Jaffray Cos. (PJC) Because Apple generates about two-thirds of its profit from the iPhone, a successful debut is critical to fuel growth that has led investors to catapult Cupertino, California-based Apple to the world’s most valuable company.

Apple climbed less than 1 percent to $700.10 at the close in New York. The stock has gained 73 percent this year.

‘Cool Kids’

“We’ve never seen anything like this before,” said Andrew McAfee, principal research scientist at Massachusetts Institute of Technology’s Center for Digital Business. “It used to be that with tech products the nerds got them, obsessed about them, and talked about them, and the cool kids wanted no part of that conversation. That’s just not true anymore.”

Apple may have trouble keeping up with initial demand because of supply shortages of components such as in-cell screen displays, according to Barclays Plc. (BARC) Already, the company had to push out some deliveries to October after early online purchases topped 2 million in 24 hours, double the record set last year with the iPhone 4S.

Apple is introducing the iPhone across the world faster than any of the device’s five previous debuts. The iPhone will go on sale in 22 more countries on Sept. 28, Apple said, and it will be in more than 100 countries by the end of the year.

Steve Wozniak, who co-founded Apple with Steve Jobs, was among those waiting at an Apple Store before the opening. He wrote on Twitter that he was in line in Australia to pick up the new iPhone.

Sydney, Tokyo

In Sydney, the first 11 places in line were taken up by companies using the sale to promote their own business. Some of them were there since Sept. 18, and were paid as much as A$200 ($210) a day to stand and advertise for business. Apple employees in blue T-shirts applauded as the first shoppers got into the store while police tried to manage the crowd outside.

At the Apple Store in Tokyo’s shopping district Ginza, about 750 people had lined up by 8 a.m.

“I’ve been taking time-offs since Saturday and waiting,” said Mitsuya Hirose, 37, who was the first in line. “When I bought the iPad, I was the third person in line, so I am happy now,” said Hirose, who bought his first iPhone three years ago.

In Hong Kong, hundreds of people jammed the entrance of the Apple Store in Hong Kong’s IFC mall, chanting and cheering as customers waited to be let in. Police and security guards were standing by as the store opened at 8 a.m., two hours earlier than usual. Only those customers who registered online to reserve a handset were allowed in.

Stolen Phones

Among them was Michael Chan, a 29-year-old airline industry worker, who called in sick at work to be able to buy two 64 GB black-colored iPhones. Chan said he had bought all previous versions of the iPhone, since they were introduced in 2007.

At three outlets in western Japan’s Osaka, 191 iPhone 5s were stolen earlier today, Kyodo News reported, citing police at the prefecture. A resident near one of the outlets saw three men break into the store and then leave in a car, the news agency said. Thefts were also reported from Kobe City, Kyodo said, citing local police.

In central Paris, the crowd of about 500 people in front of the Apple Store near the Garnier Opera included protesting Apple retail staff demanding better compensation, perks and work conditions.

‘Freezing Cold’

“We won’t block the sale of the iPhone and ruin the day,” said Thomas Bordage, a representative for the SUD union, which represents a minority of Apple Store employees in France. “We generate massive revenue for Apple and we’re just hoping for a gesture to show the company will share some of that with us.”

Jasmine Khounnala-Abécassis, an Apple spokeswoman in France, didn’t return a call seeking comment.

In London’s Covent Garden, a crowd of about 1,000 outside the local Apple store this morning received pastries from a local cafe chain and water bottles from Apple staff.

“The night was freezing cold,” said Tetchie Ann Flores, 28, a student who had been in line since 9 p.m. the previous night. “I’m probably going to buy two as I’ve been queuing for so long.”

London police said 252 iPhones were stolen from a store in Wimbledon. In New York, police were outside Apple’s store on Fifth Avenue to register phones in case they were stolen, said Jessica Mellow, who lined up there three days ago.

“I’m glad they’re there,” said Mellow, a 27-year-old model and artist. “I’ve had a 3, a 3S, a 4 and a 4S, and every one of them was stolen. My 4S was stolen out of my hand the month after I bought it.”

Faster Web

The new iPhone has a bigger screen, lightweight body design and faster microprocessor, and is compatible with speedier wireless networks. Software upgrades include new mapping and turn-by-turn navigation features.

Technology gadget reviewers mostly praised the new device, especially for its swifter wireless speeds that improve Web browsing and other data-hungry tasks. One criticism was the new mapping features, which don’t include details on how to navigate public transportation.

Zach Arrick was No. 42 in line outside the Verizon Wireless store near Bryant Park in New York to upgrade from an iPhone 4S to the new model.

“I’ve been waiting my whole life,” said Arrick, 28, who lives in Manhattan and works for a bank. “I grew up knowing it’s always something great from Apple.”

Android Competition

The lines around the world show how customers remain loyal to Apple once they buy one of its products, said Giri Cherukuri, a portfolio manager for Oakbrook Investments LLC, which owns Apple shares.

“The longer people are in the Apple ecosystem, the harder it is for them to switch away,” he said.

Apple is vying with rivals including Samsung Electronics Co. (005930), HTC Corp. (2498) and Google Inc. (GOOG)’s Motorola Mobility for dominance in a global smartphone market that reached $219.1 billion last year, according to data compiled by Bloomberg Industries. Those manufacturers primarily use Google’s Android operating system, which is the world’s most popular mobile software. Microsoft Corp. (MSFT), which has been working closely with Nokia Oyj (NOK1V), also is introducing a new mobile version of Windows later this year.

Line Arrangements

The benefits of a successful iPhone debut extend beyond Apple. Suppliers including Qualcomm Inc. (QCOM), Broadcom Corp. (BRCM), LG Display (034220) and Hon Hai Precision Industry Co. (2317), the owner of Foxconn Technology Co. (2354), also will see a gain, according to Barclays.

To take advantage of the iPhone’s popularity, some of the first to get in line were there for the publicity.

In what may be the biggest consumer electronics debut in history, more than 200 people are expected to hold places in line for strangers at stores around New York and the San Francisco bay area for the iPhone 5, Bloomberg.com reported on its Tech Blog. These arrangements were made on the website TaskRabbit Inc., where a user can find workers to do odd jobs such as assembling Ikea furniture or waiting in long lines.

Okan Yasin, a 19-year-old imitator who has performed in German TV shows, had stood in line for 17 hours outside the Apple store in Frankfurt’s financial district and was among about 1,000 people gathered at the shop for the opening.

“There is nothing cooler than being the first,” Yasin said. “Now I am gonna go home and unpack it slowly and with joy -- this is going to be better than sex.”

To contact the reporters on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net; Ryan Faughnder in New York at rfaughnder@bloomberg.net; Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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Photographer: Kiyoshi Ota/Bloomberg

Customers with Apple Inc. iPhone 5 smartphones after purchasing them at SoftBank Corp.'s flagship store in Tokyo on Sept. 21, 2012.

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Photographer: Kiyoshi Ota/Bloomberg

Customers with Apple Inc. iPhone 5 smartphones after purchasing them at SoftBank Corp.'s flagship store in Tokyo on Sept. 21, 2012. Close

Customers with Apple Inc. iPhone 5 smartphones after purchasing them at SoftBank Corp.'s flagship store in Tokyo on Sept. 21, 2012.

A staff member of Apple Inc. shows the iPhone 5 to customers at the Apple store in Hong Kong Friday, Sept. 21, 2012. Photograph: AP Photo/Kin Cheung Close

A staff member of Apple Inc. shows the iPhone 5 to customers at the Apple store in Hong Kong Friday, Sept. 21, 2012.... Read More

Photographer: Ian Waldie/Bloomberg

Apple is introducing the iPhone across the world faster than any of the device’s five previous debuts. Close

Apple is introducing the iPhone across the world faster than any of the device’s five previous debuts.

Photographer: Simon Dawson/Bloomberg

Customers queue in a holding area prior to entry into the Apple Inc. store on Covent Garden during the first day of sales for the Apple Inc. iPhone 5 smartphone in London. Close

Customers queue in a holding area prior to entry into the Apple Inc. store on Covent Garden during the first day of... Read More

Photographer: Simon Dawson/Bloomberg

Because Apple generates about two-thirds of its profit from the iPhone, a successful debut is critical to fuel growth that has led investors to catapult Apple to the world’s most valuable company. Close

Because Apple generates about two-thirds of its profit from the iPhone, a successful debut is critical to fuel growth... Read More

Photographer: Kiyoshi Ota/Bloomberg

A customer in an iPhone costume stands in line outside the Apple Store Ginza in Tokyo. Close

A customer in an iPhone costume stands in line outside the Apple Store Ginza in Tokyo.

Photographer: Simon Dawson/Bloomberg

A customer holds onto her Apple Inc. iPhone 5 order card before entering the company's Covent Garden store during the first day of sales for the smartphone in London. Close

A customer holds onto her Apple Inc. iPhone 5 order card before entering the company's Covent Garden store during the... Read More

Photographer: Simon Dawson/Bloomberg

The first customer in the queue to buy the new Apple Inc. iPhone 5 celebrates as he enters the company's Covent Garden store in London. Close

The first customer in the queue to buy the new Apple Inc. iPhone 5 celebrates as he enters the company's Covent Garden store in London.

Photographer: Daniel J. Groshong/Bloomberg

A customer purchases Apple Inc.'s iPhone 5 at the company's store in Hong Kong. Close

A customer purchases Apple Inc.'s iPhone 5 at the company's store in Hong Kong.

Photographer: Daniel J. Groshong/Bloomberg

Apple Inc. employees prepare to open the company's store in Hong Kong. Close

Apple Inc. employees prepare to open the company's store in Hong Kong.

Photographer: Ian Waldie/Bloomberg

People use their mobile phones to take photographs of their queue tickets as they wait in line outside the Apple Inc. store on George Street in Sydney. Close

People use their mobile phones to take photographs of their queue tickets as they wait in line outside the Apple Inc.... Read More

Photographer: Ian Waldie/Bloomberg

Apple Inc. employees cheer as the doors open at the company's store on George Street in Sydney. Close

Apple Inc. employees cheer as the doors open at the company's store on George Street in Sydney.

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