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Thursday, October 04, 2007, 08:00 am PT (11:00 am ET)

Report: 10 percent of September iPhones sold to unlocking teams

Analysts for investment bank Piper Jaffray recently spent more time tracking unit sales at Apple Inc.'s retail stores and reported Thursday that their observations indicate that as many as 10 percent of the iPhones sold by the stores during the month of September were being purchased with the intention to be resold unlocked.

"In late September we spent 12 hours counting iPhone, iPod and Mac sales in Apple stores across the country," analyst Gene Munster wrote in a research note to clients. "During our store checks we noticed many people buying iPhones in the maximum 5 per customer allotments, which we believe were being purchased to be unlocked and operated on carriers other than AT&T."

The analyst said this trend was especially noticeable in the New York City stores, where one Apple employee acknowledged that customers were buying five iPhones per store visit in order to turn around and resell them unlocked.

"At one point during the visit, the store sold out of iPhones," he added. "Judging from our checks, as much as 10 percent of the iPhones sold in September were purchased with the intention to be resold unlocked."

Munster went on to note that on September 27th Apple released iPhone software version 1.1.1, which rendered most of the unlocked phones inoperable and in doing so effectively minimized the market for unlocked iPhones. Just prior to this move, however, he said that iPhone sales at Apple retail stores had stabilized at an approximate 56 percent increase to the rates witnessed just prior to the handset's significant $200 price cut on September 5th.

Meanwhile, the analyst and his team were also tracking unit sales of Macs and iPods at the company-owned stores.

Since his last round of checks in the July and August timeframe, Mac momentum appeared to have slowed some 39 percent. But this "makes sense," he said, given the passing of the strong education-related shopping season in August. He continues to expect Apple to report September quarter Mac sales of approximately 2.0 million to 2.1 million versus the Street's consensus of 1.95 million.

While Munster did not have data from August with which to compare his September iPod checks, he was able to provide some observations on the breakdown models.

"Of the iPods we counted, 39 percent were nanos, 36 percent touches, 16 percent shuffles, and 9 percent classics," he wrote. "We continue to believe iPods are tracking to the Street consensus in September of 10.6 million [units]."

The Piper Jaffray analyst maintained his "Outperform" rating and $211 price target on shares of Apple.