iPhone 3G seen 'repeating history' with record 14m sales in 2008
The impact of the iPhone 3G's faster Internet access, new markets, third-party apps, and very low pricing should trigger a new sales rush that does for the iPhone what 2005 accomplished for the iPod, according to a new report from RBC Capital Markets.
Analyst Mike Abramsky of the bank makes the historical connection by noting that Apple's careful management of the iPhone could once again lead to a "breakout" in shipments, which the analyst predicts will triple in the summer to 5.1 million and nearly double last year's holiday volume to 6.5 million, pushing the Cupertino, Calif.-based company well past its official 10 million-unit goal for the year to as many as 14 million phones.
"We believe investors are underestimating the upside to Apple from lower iPhone pricing, 3G speeds and expanded global distribution," Abramsky says.
The researcher notes that late 2005 was a watershed moment for Apple and saw the firm more than double its holiday iPod sales at the time to 14 million units, cementing the player's position in the marketplace.
Abramsky in particular sees the iPhone 3G's price as doubling sales momentum by itself. The $199 subsidized price is labeled a "sweet spot" for most buyers and should still put the iPhone on par with other pay-as-you-go smartphones in Europe, which often near or exceed the iPhone's €499 price in Italy and other countries that will offer a non-subscription alternative.
The low price may also create an unusual upgrade path for iPod owners, the analyst says: with the device cost in line with many iPods, a "massive" amount of the 150 million existing iPod owners may trade up to an iPhone rather than simply replace their iPods with newer equivalents.
That success is only expected by Abramsky to continue into next year. Apple's total potential user base for the iPhone will expand by at least five times by the end of 2008 and, barring shortages or launch problems, is estimated to lead to as many as 24 million iPhones shipped over the course of 2009.
Shares of Apple rose $4.47 or more than 2.5 percent to close at $176.84 on the Nasdaq stock market.
Analyst Mike Abramsky of the bank makes the historical connection by noting that Apple's careful management of the iPhone could once again lead to a "breakout" in shipments, which the analyst predicts will triple in the summer to 5.1 million and nearly double last year's holiday volume to 6.5 million, pushing the Cupertino, Calif.-based company well past its official 10 million-unit goal for the year to as many as 14 million phones.
"We believe investors are underestimating the upside to Apple from lower iPhone pricing, 3G speeds and expanded global distribution," Abramsky says.
The researcher notes that late 2005 was a watershed moment for Apple and saw the firm more than double its holiday iPod sales at the time to 14 million units, cementing the player's position in the marketplace.
Abramsky in particular sees the iPhone 3G's price as doubling sales momentum by itself. The $199 subsidized price is labeled a "sweet spot" for most buyers and should still put the iPhone on par with other pay-as-you-go smartphones in Europe, which often near or exceed the iPhone's €499 price in Italy and other countries that will offer a non-subscription alternative.
The low price may also create an unusual upgrade path for iPod owners, the analyst says: with the device cost in line with many iPods, a "massive" amount of the 150 million existing iPod owners may trade up to an iPhone rather than simply replace their iPods with newer equivalents.
That success is only expected by Abramsky to continue into next year. Apple's total potential user base for the iPhone will expand by at least five times by the end of 2008 and, barring shortages or launch problems, is estimated to lead to as many as 24 million iPhones shipped over the course of 2009.
Shares of Apple rose $4.47 or more than 2.5 percent to close at $176.84 on the Nasdaq stock market.
Comments
iPod:
At the time 75% of the country didn't know what the heck an iPod was. That was part of the potential for so much growth since.
iPhone:
Today , iPhone is a household name, and the sales numbers are what they are. The 3G version will sell to a broader market and a fraction of current iPhone owners.
only 14m? I would hazard a guess slightly more than that. but who knows
I think so too. Especially if Apple doesn't lower the price of iPods for awhile. For instance, if they keep iPod prices?sans the iPod Touch which seems inevitable for change come July 11th?until the fall when they refresh at or near the end of the Back To School period we may see a lot of people buying iPhones with the idea that it consolidates their iPod and phone, while offering greater functionality. Can we see 15 Million from July 11th to December 31st with sales in an upcoming 75 countries? What will the stock be as the new pricepoint and number of countries with official retailers has not been factored into the current value?
I think so too. Especially if Apple doesn't lower the price of iPods for awhile. For instance, if they keep iPod prices?sans the iPod Touch which seems inevitable for change come July 11th?until the fall when they refresh at or near the end of the Back To School period we may see a lot of people buying iPhones with the idea that it consolidates their iPod and phone, while offering greater functionality. Can we see 15 Million from July 11th to December 31st with sales in an upcoming 75 countries? What will the stock be as the new pricepoint and number of countries with official retailers has not been factored into the current value?
Actually, I did. I sold prior to the WWDC in the high 180s. I had planned to get in after teh drop that day but forget to setup the auto-purchase when the stock hit a certain point. Luckily for me, that drop which appears to have been foolishly based on Job's health get me in many points lower than I had intended. My stupidity worked in my favour this time.
Actually, I did. I sold prior to the WWDC in the high 180s. I had planned to get in after teh drop that day but forget to setup the auto-purchase when the stock hit a certain point. Luckily for me, that drop which appears to have been foolishly based on Job's health get me in many points lower than I had intended. My stupidity worked in my favour this time.
I was wondering when you bought back in. I saw you said you were going to sell pre-event. Sounds like it worked out well for you.
I promised myself when I bought that I would take a long position. I'm afraid if I start buying and selling I will either drive myself crazy or get greedy and take a beating. But if I knew I could make money by being stupid...
I don't think it's possible to underestimate how well the iPhone will sell.
I think Apple will sell 17 iPhones in the next quarter.
I think apple will attract 60% new customers and 40% of the older owners. Maybe 13-Million is a reasonable point.
Remember that some people base their phone buy on features like MMS and Copy&Paste, which we all use SOOO MUUCHH! (sarcasm)
well its kinda weird with new iPhone. Im still thinking to buy or not to buy. The whole ATT deal and the price drop is a trick.
I think apple will attract 60% new customers and 40% of the older owners. Maybe 13-Million is a reasonable point.
Remember that some people base their phone buy on features like MMS and Copy&Paste, which we all use SOOO MUUCHH! (sarcasm)
its true. I don't know anyone who uses MMS. I hardly ever sent pictures from my phone but since I got my iPhone I sent loads using email. (mms costs 30-50p per message)
The only single thing I want is the ability to forward SMS messages. I get sent loads of jokes but I can't forward them to my mates without having to retype the whole message.
Not a major issue any its certainly not stopping me from upgrading my iPhone on the 11th of July.
It's:
€99 on the €65 tariff and €169 on the €45 tariff
I think Apple will sell 17 iPhones in the next quarter.
I think you're wrong
- they'll only sell 12!
How do I sell my old iphone? Will someone be able to take my iphone and sim to an ATT store to get it activated? Will the revenue sharing plans still be available to 2.5G iphone owners post July 11th?
its true. I don't know anyone who uses MMS. I hardly ever sent pictures from my phone but since I got my iPhone I sent loads using email. (mms costs 30-50p per message)
The only single thing I want is the ability to forward SMS messages. I get sent loads of jokes but I can't forward them to my mates without having to retype the whole message.
Not a major issue any its certainly not stopping me from upgrading my iPhone on the 11th of July.
I'm pretty sure the iPhone will sell well, despite some of the features it lacks.
...
I'm pretty sure the iPhone will sell well, despite some of the features it lacks.
And probably a lot more when Apple announces the 32GB version in time for the Christmas shopping season
And probably a lot more when Apple announces the 32GB version in time for the Christmas shopping season
If las year was an indicator the Flash update will occur after the holidays in January.
I was wondering when you bought back in. I saw you said you were going to sell pre-event. Sounds like it worked out well for you.
I promised myself when I bought that I would take a long position. I'm afraid if I start buying and selling I will either drive myself crazy or get greedy and take a beating. But if I knew I could make money by being stupid...
That was very funny!
I was wondering when you bought back in. I saw you said you were going to sell pre-event. Sounds like it worked out well for you.
I promised myself when I bought that I would take a long position. I'm afraid if I start buying and selling I will either drive myself crazy or get greedy and take a beating. But if I knew I could make money by being stupid...
The mantra when I worked at Schwab was:
Bears make money,
Bulls make money,
Pigs lose money.