Report: Apple places order for 24-25 million 3G iPhones
Long-time iPod manufacturer and current iPhone builder Foxconn Electronics has been selected by Apple to assemble the company's upcoming 3G iPhone handset, with volume shipments expected to begin this June, says a new report out of the Far East.
Citing sources at component suppliers as well as foreign institutional investors, the Chinese-language Commercial Times reports that the Taipei-based manufacturer was recently instructed by Apple to begin procuring component materials for the next-generation touch-screen handsets for an initial test build no later than the end of May.
Shipments of the 3G iPhone are expected to top three million units in June with the model likely to ship a total of 24-25 million units throughout its life-cycle, the paper added.
Since introducing its first-generation iPhone last June, Apple has managed to sell just shy of 6 million units with help from exclusive wireless partners in the US, UK, Germany, France, Austria and Ireland. However, a flurry of recent reports have suggested the Cupertino-based company will forgo exclusive carrier contracts as it expands distribution of the handsets to additional European nations and portions of Asia around the same time it unveils its 3G offering.
Specifically, Italian newspaper Repubblica reported last week that Apple had inked a deal with Telecom Italia Mobile (TIM) to begin selling a 3G iPhone through the carriers retail shops. The report added, however, that the exclusivity to TIM would last only a few months and that other Italian carriers would immediately be free to offer the handset, which would ship unlocked, to their own customers.
That report added to similar claims emerging out of Australia and was soon followed by an almost identical report out of Belgium. In the case of the latter, regional publication Astel.be. cited sources in saying that three Belgian carriers -- Proximus, Mobistar and BASE -- were each creating special data packages for the 3G iPhone, and that Mobistar would likely have a several month exclusive to market the handset through its retail shops like Italy's TIM.
Sales of iPhones have thus far been described as lackluster in Europe, as customers largely chose to forgo the existing model in favor of waiting for a version capable of taking advantage of third-generation wireless networks, which are most prevalent in the region.
As such, the iPhone currently stands as a relatively minor contributor to Apple's top line, generating only 2-3 percent of the company's revenue. However, analysts on Wall Street believe that sales of the device one day become as large as the the company's current Mac business, fueling approximately $15 - $20 billion in annualized revenue, as the iPhone capitalizes on a global handset market ten times the size of the worldwide PC market.
In March, Commercial Times reported that Foxconn was amongst those Taiwanese assemblers bidding on Apple's 3G iPhone contract, with DowJones claiming shortly thereafter that a deal between the two companies had been reached.
Citing sources at component suppliers as well as foreign institutional investors, the Chinese-language Commercial Times reports that the Taipei-based manufacturer was recently instructed by Apple to begin procuring component materials for the next-generation touch-screen handsets for an initial test build no later than the end of May.
Shipments of the 3G iPhone are expected to top three million units in June with the model likely to ship a total of 24-25 million units throughout its life-cycle, the paper added.
Since introducing its first-generation iPhone last June, Apple has managed to sell just shy of 6 million units with help from exclusive wireless partners in the US, UK, Germany, France, Austria and Ireland. However, a flurry of recent reports have suggested the Cupertino-based company will forgo exclusive carrier contracts as it expands distribution of the handsets to additional European nations and portions of Asia around the same time it unveils its 3G offering.
Specifically, Italian newspaper Repubblica reported last week that Apple had inked a deal with Telecom Italia Mobile (TIM) to begin selling a 3G iPhone through the carriers retail shops. The report added, however, that the exclusivity to TIM would last only a few months and that other Italian carriers would immediately be free to offer the handset, which would ship unlocked, to their own customers.
That report added to similar claims emerging out of Australia and was soon followed by an almost identical report out of Belgium. In the case of the latter, regional publication Astel.be. cited sources in saying that three Belgian carriers -- Proximus, Mobistar and BASE -- were each creating special data packages for the 3G iPhone, and that Mobistar would likely have a several month exclusive to market the handset through its retail shops like Italy's TIM.
Sales of iPhones have thus far been described as lackluster in Europe, as customers largely chose to forgo the existing model in favor of waiting for a version capable of taking advantage of third-generation wireless networks, which are most prevalent in the region.
As such, the iPhone currently stands as a relatively minor contributor to Apple's top line, generating only 2-3 percent of the company's revenue. However, analysts on Wall Street believe that sales of the device one day become as large as the the company's current Mac business, fueling approximately $15 - $20 billion in annualized revenue, as the iPhone capitalizes on a global handset market ten times the size of the worldwide PC market.
In March, Commercial Times reported that Foxconn was amongst those Taiwanese assemblers bidding on Apple's 3G iPhone contract, with DowJones claiming shortly thereafter that a deal between the two companies had been reached.
Comments
Sales of iPhones have thus far been described as lackluster in Europe, as customers largely chose to forgo the existing model in favor of waiting for a version capable of taking advantage of third-generation wireless networks, which are most prevalent in the region.
Sadly, yes. But come June...
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...a flurry of recent reports have suggested the Cupertino-based company will forgo exclusive carrier contracts as it expands distribution of the handsets to additional European nations and portions of Asia around the same time it unveils its 3G offering.
At this point, single carrier exclusives are holding Apple back. And an Asian launch around the same time as the 3G launch? VERY nice, if true.
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Report: Apple places order for 24-25 million 3G iPhones
I mean, really? The report only says that Apple expects to sell that many during the model's lifecycle. Have they really walked up to manufacturer and said, "Yes, we'd like 25 million of these ASAP, please."
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Assuming just 20 million over the life cycle of a year-and-a-half, $400 per phone, 17.5% operating margin (Apple's average for the last quarter), and a forward P/EBIT of 20 (it is currently in the mid-20s), that could mean an extra $28 billion in market cap - or, roughly an extra $31 per share.
But we don't know off of what base, since the market has, quite likely, factored some of this into the current price already.... i.e., it may not necessarily be on top of the $170 it's at today.
(This is all, of course, overly simplified analysis: one would have to subtract from it the impact on iPod sales, but consider offsetting factors such as sharing arrangements with carriers and such).
Btw, is this another famously inaccurate AI headline?:
Report: Apple places order for 24-25 million 3G iPhones
I mean, really? The report only says that Apple expects to sell that many during the model's lifecycle. Have they really walked up to manufacturer and said, "Yes, we'd like 25 million of these ASAP, please."
Or it may be that they placed the order but with staggered timetables of how many are needed when. I think Jobs said at a WWDC that they had to plan their production rate and quantities more than six months in advance. I think it's just to make sure there's enough capacity to keep up with demand.
Or it may be that they placed the order but with staggered timetables of how many are needed when. I think Jobs said at a WWDC that they had to plan their production rate and quantities more than six months in advance.
Yeah, but can you really predict with any accuracy how something's gonna sell a year or more out?
Because 25 million is one or two years of iPhones, in all likelihood. Will the hardware be the same in 2010?
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Nokia must be peeing in its proverbial pants. Of course, Apple isn't gunning for Nokia; it's got RIM in its sights. Terminate with extreme prejudice.
The Far East? Isn't that in the same region as the Mysterious Orient?
Yeah, it is not PC to refer to it as Far East or The Orient?
Nokia must be peeing in its proverbial pants. Of course, Apple isn't gunning for Nokia; it's got RIM in its sights. Terminate with extreme prejudice.
I wonder if their main focus is RiM or not a equal focus on both business and consumers. There is a lot of evidence to suggest that the majority of iPhone users are new to smartphones. While the millions sold are a drop in the bucket compared to the total worldwide sales of Nokia, Apple is taking the most desirable customers, just like they do with the Mac platform.
I stand by my 60 million iPhones over the next two years prediction; (which I still think is conservative).
3G, v2.0 w/ Exchange and 3rd-party app store, and unlocked in many new countries certainly will cause and explosion of sales. But by how much?
I'm predicting 10M in 6 months of 3G launch seem conservative. Which is 40M over 2 years if the sales stay stagnant. But they won't, so it looks like our estimates are about on par.
Yeah, but can you really predict with any accuracy how something's gonna sell a year or more out?
Because 25 million is one or two years of iPhones, in all likelihood. Will the hardware be the same in 2010?
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They're probably using the iPod model for predicting future sales. They believe the iPhone will be as popular as the iPod was and practically everyone in each family will own one. On a worldwide scale I'd hardly think that 25 million iPhones in a year would be too much of a stretch. Once the SDK is done and corporate e-mail becomes standard on the iPhone, sales should be boosted dramatically. It may even be well received as a gaming machine. I really think it will become an extremely versatile device. Windows Mobile and Palm handsets will be thrown away to be replaced with iPhones. Even the great RIM machine will lose market share to the iPhone.
As to your question about predicting future sales in reality. It can't be done with much accuracy. As an Apple investor, I just let my dreams run wild and pray the iPhone sells by the gazillions. I've already choreographed my victory dance when Apple's stock price reaches $250 this year.
Btw, is this another famously inaccurate AI headline?:
Report: Apple places order for 24-25 million 3G iPhones
I mean, really? The report only says that Apple expects to sell that many during the model's lifecycle. Have they really walked up to manufacturer and said, "Yes, we'd like 25 million of these ASAP, please."
.
Bet they do and bet the sell out
At this point, single carrier exclusives are holding Apple back. And an Asian launch around the same time as the 3G launch? VERY nice, if true.
If Apple came out with a world phone, both GSM & CDMA, then there would be no market they could not enter. I'm hopping that the AT&T contract ends no later than June 09 so Apple could sell into the Verizon market. That should be easy now that Verizon allows any phone on their network.
Apple will sell 27 Million iPhones in calendar year 2008.
three Belgian carriers -- Proximus, Mobistar and BASE -- were each creating special data packages for the 3G iPhone, and that Mobistar would likely have a several month exclusive to market the handset through its retail shops like Italy's TIM.
This is the biggest advantage that came from starting with exclusive deals. Apple has now set up an expectation of how the iPhone will be used and operated. Carriers will be expected to offer unlimited data packages and will have to compete on price.
24 - 25 million!?
Assuming just 20 million over the life cycle of a year-and-a-half, $400 per phone, 17.5% operating margin (Apple's average for the last quarter), and a forward P/EBIT of 20 (it is currently in the mid-20s), that could mean an extra $28 billion in market cap - or, roughly an extra $31 per share.
But we don't know off of what base, since the market has, quite likely, factored some of this into the current price already.... i.e., it may not necessarily be on top of the $170 it's at today.
(This is all, of course, overly simplified analysis: one would have to subtract from it the impact on iPod sales, but consider offsetting factors such as sharing arrangements with carriers and such).
Your numbers in the first paragraph though are low... $400 per phone is low, I think we might just see $700 unsubsidized iPhones, and $400 subsidized with contract. Either way Apple gets far more than $400. Also the current forward PE is 27. Finally yes, there's no way of telling how much of that is already baked in, probably a lot of it.
RIMM has no proven track record selling to the consumer market in a hotly contested product segment. It's a one trick pony. Yet people are willing to bet on them against Apple.
Shall we say Gentlemen, start shorting your RIMMs?
I wonder if RIMM valuations include the fact that Apple is about to eat their lunch in the consumer market? (Just their side salad in the enterprise market, though.)
RIMM has no proven track record selling to the consumer market in a hotly contested product segment. It's a one trick pony. Yet people are willing to bet on them against Apple.
Shall we say Gentlemen, start shorting your RIMMs?
Despite having to compete against the iPhone for 9 months out of the last fiscal year, as well as the announced but not shipping iPhone 5 months prior to that, RIMM still doubled their revenue.