On Monday, Apple (NASDAQ:AAPL) announced that it had sold 5 million units of the iPhone 5 over the device's launch weekend. That figure ended up disappointing investors, who were expecting the Mac maker to post sales upwards of 6 million to 8 million units.
Much of the optimism was related to the company's prior announcement that it had garnered up to 2 million pre-orders for the iPhone 5 within the first 24 hours alone. Bulls, myself included, shortsightedly figured that last year, Apple saw iPhone 4S launch weekend sales that were four times its pre-ordered number, so it stood to reason that the company could conceivably achieve another four times multiple, which would imply 8 million unit sales over the weekend.
The problem is that the 2 million pre-order figure wrongly boosted expectations, since the vast majority of those were simply never destined to be delivered on launch weekend. The batch of iPhone 5 units that Apple set aside for launch weekend delivery was exhausted just one hour after pre-orders began on its website. That means only one hour's worth of pre-orders would be included in the launch, while another allotment was reserved for retail distribution.
Of those 24 hours it took to grab 2 million pre-orders, 23 of those hours' worth of buyers wouldn't get their hands on the device for a week after launch, since shipping times almost immediately slipped. It's hard to know how many units we're talking about, unless you have a magic portal into Tim Cook's brain. Piper Jaffray's Gene Munster estimates that we could be talking about a million pre-ordered units -- half of the first 24-hour total -- that will be pushed into October and next fiscal quarter.
Supply constraints are naturally the real culprit here behind the iPhone shortages, specifically the in-cell touch display panels, but that distinct feeling of disappointment that led shares lower upon the announcement can absolutely be tied to lofty expectations that got ahead of investors.
Evan Niu, CFA, owns shares of Apple. The Motley Fool owns shares of Apple. Motley Fool newsletter services recommend Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.