Stakes high as Apple debuts new iPhones

San Jose Mercury NewsSeptember 20, 2013 

For the first time, Apple released not just one, but two iPhones on Friday, giving fans double the choice and Wall Street double the heartburn.

Apple’s dual phone launch closed out a tumultuous couple of weeks for the tech giant, which took a hit on the stock market after announcing its newest smartphones, rebuffed backlash over the not-so-low-cost of its low-cost iPhone option and discovered a security glitch in its new operating system. The pressure was on for Apple to post big sales of new iPhone 5C and iPhone 5S, and assure consumers and investors that the Cupertino, Calif., company still had something revolutionary up its sleeve.

The two phones to choose from are the iPhone 5S, the company’s new flagship device loaded with Apple’s latest and greatest, and the lower-cost, heavier but colorful iPhone 5C. Along with the U.S., Australia, Canada, China, France, Germany, Hong Kong, Japan, Puerto Rico, Singapore and the U.K. also launched the iPhone 5S and 5C on Friday.

Apple did not say how many units of the iPhone 5S it had in stock, but it was clear that demand would exceed supply.

“Demand for the new iPhones has been incredible, and we are currently sold out or have limited supply of certain iPhone 5S models in some stores,” Apple spokesman Bill Evans said Friday.

Piper Jaffray analyst Gene Munster said in a note to investors he expected Apple would sell 5 million to 6 million iPhones, including pre-sale orders that started Sept. 13. GI Securities analyst Ming-Chi Kuo was more optimistic, estimating weekend sales would hit 6 million to 8 million.

But investors, like fan boys and girls, may have to brace for disappointment.

Tech news site reported that one U.S. network said it had a “grotesquely unavailable inventory” ahead of launch day, and things weren’t looking much better in the U.K., where networks told the BBC there was a severe shortage of the iPhone 5S. The 5S is listed on Apple’s UK website as being unavailable for seven to 10 business days.

Some customers in Asia and Australia have been told they’ll have to wait at least a week and as far out as October.

Some analysts speculated that Apple was trying to foster demand for the cheaper 5C by slowing the supply of the 5S to stores.

Apple sold more than 4 million units of the iPhone 4S during launch weekend in 2011, and sales topped 5 million for the iPhone 5 during its first weekend in stores almost exactly a year ago. But last year Apple stock was trading above $700, a record high; since then, it has slumped by about a third.

The 5S features more processing power, upgraded camera features, and improved graphics quality that some reviews have pegged better than Samsung’s Galaxy S 4. And there’s a gold color, which may alone be a selling point for some. It starts at $199 with a two-year contact.

The iPhone 5C is a heavier model that comes in a spectrum of candy-coated colors, and boasts some improvements including added camera features. But some critics have said it’s little more than last year’s model wrapped in cheerful-colored plastic.

It’s also considered too expensive for the average Chinese consumer, a market where some experts were hoping for big sales.

Both phones will ship with Apple’s newest operating system preinstalled. IOS 7 was made available for download Wednesday and has been widely praised for its multitasking interface and software additions such as GarageBand. But Apple is now working to fix a security glitch that was discovered, and some critics say the system shortens the iPhone’s already too-short battery life.

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