Despite the massive hype, only 146,000 Apple iPhones were activated by exclusive carrier AT&T on the first weekend the device went on sale. That number was much fewer than touted expectations, which ranged from 200,000 to as many as 500,000.
And investment bank CIBC's research showed sales of the handset have slowed considerably in the last 10 days, and that there was plenty of stock left in stores. The research also stated that most visitors to Apple stores were not looking at the device and only a very small subset bought it.
CIBC analyst Ittai Kidron said customers were disappointed with Apple's connection speed to AT&T's 2G Edge Network and speculated that a newer 3G version would be on the market by November in time for the Christmas rush.
"Our recent survey of iPhone buyers suggested that the key shortcoming of the current device is its poor data connectivity," Mr Kidron told Dow Jones Newswires. "This isn't a surprise and Apple's CEO Steve Jobs admitted the iPhone's cellular connectivity can use an improvement. We now believe the 'improvement' could come soon."
In its press release AT&T appeared to contradict CIBC and said: "Sales of the iPhone continue to be strong in July with store traffic above historical levels."
For its part Apple is in a quiet period before Wednesday's release of its financial results. Its share price took around a 4% hit after the initial news broke on Tuesday to trade just above $140 (£67.88).