The "missing" iPhones

The cell phone business is a channel fill. When a company comes out with a new phone, they seed the channel so stores have the phones in inventory when a customer walks in and wants to sign up.

With all the glowing reviews the iPhone received, it's no wonder the channel would be full of product. I know a few people waiting for a 3G version -- the edge network is just slow. AT&T service is still spotty in New York somehow.

Personally, I had an iPhone for a few days. My thumbs are gigantic. Seriously. Just huge thumbs. The sleek keyboard just didn't work with my ogre-like digits. The web-page resizing feature is very cool but sooo annoying. I spent half the time surfing resizing the screen so I could fit what I wanted to see to the display. I had to return it. My wife has slim fingers and she loves her iPhone. I still look at it with some covetous discomfort but it's not for me yet.

I think Apple may have fallen prey to a lack of market knowledge in revealing too much about the sales of the product. They're not cell phone guys.

The pricing of the product in Europe is just astoundingly expensive -- it's a $700 phone there. That's just silly. Sales in Europe have been disappointing and it's no wonder. They need to cut the price there, same as they did here a couple of months into selling it.

As to the missing iPhones... they're not missing. They're right where they're supposed to be, in the stores... waiting to be bought. As the iPhone is an expensive ticket and so consumer-oriented, they're probably going to see seasonal softness in the post-holiday sales. They've been cutting back on component purchases across the board.

This creates a difficult environment for the stock. With half of the business tied to the iPod and iPhone, it's hard to make a case it's going anywhere anytime soon. The chart suggests $120 is the next possible bounce level.