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Friday, September 28, 2007, 08:00 am PT (11:00 am ET)

Report: iPhone sales at AT&T stores remain higher than expected

Sales of Apple's slick touch-screen handset at AT&T retail stores, which saw an immediate spike following a $200 price cut earlier this month, appear to have stabilized at levels much higher than one analyst had anticipated.

In a report released to clients earlier this month, Piper Jaffray analyst Gene Munster said iPhone sales increased as much as threefold at most Apple and AT&T stores in the first five days that followed Apple's 33 percent price cut on Sept. 5th.

The analyst, as part of that same report, estimated that sales of the device would inevitably fall back to more sound levels, stabilizing at an approximate 50 percent increase to the rates witnessed before the price reduction. But in a brief bulletin issued to investors Friday morning, Munster happily conceded that a steadying of such magnitude has yet to kick in.

Instead, he said checks by fellow wireless analyst Mike Walkley indicate that iPhone demand at AT&T stores remains up at a sustained rate of anywhere between 70 and 100 percent since the price cut. Assuming a 70 percent increase in demand versus his previous 50 percent estimate would mean Apple is tracking to sell 40,000 more iPhones during the three-month period ending Saturday than previously anticipated.

"While 40,000 additional phones in the September quarter may seem irrelevant, keep in mind that this incremental change is the result of only 21 days in the quarter at the lower iPhone price point," the analyst informed clients. "If you assume that this +70 percent run rate is sustainable, it would add [approximately ]170,000 phones to a full quarter."

Since Walkley is a Piper Jaffray analyst covering only the wireless sector, the bulletin released by Munster on Friday included no new data on sales rates for Apple's own retail stores. Obviously, however, those rates would be similar if not substantially higher than those experienced by AT&T shops.

Munster, who is now modeling Apple to sell 1.05 million iPhones during the Sept. quarter (up from 1.01 million), maintained his industry-leading $211 price target and Outperform rating on shares of the Cupertino-based company.