RBC report weighs in on Apple's iPhone, iPod roadmaps

[AppleInsider]

Apple Inc. may be planning to manufacture as many as 8 million iPhones before the end of the 2007 calendar year, ahead of second-generation models that will reportedly include more storage capacity and brandish higher-resolution displays, according to researchers at RBC Capital.

In a research report issued to clients on Thursday, analyst Mike Abramsky said his checks suggest Apple will handily meet its stated iPhone sales goal of 10 million units in the first 18 months, with a plan to produce 8 million units in 2007 and at least 12-14 million unit in total before the end of 2008.

"Consistent with its iPod product cycles, Apple’s 2007 plans may include offering higher memory (e.g. 16GB) iPhones, while refreshing existing models at lower cost (possibly a refreshed 8GB version at $349 - $399) to expand demand," the analyst wrote.

Abramsky said the Cupertino-based firm's build plans appear to include inventory for both Canadian and European launches between the fourth quarter of 2007 and the second quarter of 2008, as well as inventory for an iPhone roll-out in Asia by mid-2008.

By the Spring of 2008, the analyst also see "a 3G/HSDPA iPhone" and says Apple appears to be planning a larger display (480x720, vs. 480x320 currently) for that specific model, or others.

"The higher definition version could be compelling, able to replay content in near HD as well as splay resolution of digital cameras and video recorders," he wrote. "Additionally, given 480x720 is the lowest resolution Apple TV supports, this higher resolution iPhone may also offer some form of personal entertainment integration to Apple TV."

At the same time that Apple launches iPhone in Europe and Asia, the company may also upgrade its existing iPhone to UMTS/HSDPA (3G) and possibly bump storage capacities as high as 16GB, Abramsky added.

However, the analyst advised clients that "UMTS/HSDPA is newer, more complex technology (unlike EDGE which is more proven) and poses battery consumption and other challenges, thus it may take more time for Apple to stabilize and complete carrier testing and certification a 3G iPhone, hence our view of a Spring 08 launch."

Meanwhile, the RBC analyst said iPod-related checks indicate that Apple is planning an iPod line refresh during the fourth quarter of this year that would include an updated iPod Nano and new video iPod.

"Some or all are of these iPods are expected to include larger displays, more memory and integrated wireless (Wi-Fi)," he wrote. "The most significant update may be a new iPod Video, which could include iPhone- like features including widescreen, touchscreen, WiFi, Mac OS X, and possibly larger flash memory capacity (16GB) or HDD (30/80GB)."

Contrary to recent speculation of a ‘Nano’ phone, Abramsky said Apple is likely to maintain clear distinction between lower priced media devices (iPods) and more expensive devices with communications (iPhones) that also require a service commitment.

Thus far, the analyst believes Apple has sold somewhere between 850,000 and 950,000 iPhones, but expects that number to balloon to 1.1 million to 1.5 million by the time the company reports fiscal third quarter results on July 25th.

"From checks we estimate iPhone sell-through at 850- 950k to date (we est. 450-500k 1st weekend)," he told clients. "Supply constraints caused stock-outs at most AT&T stores and some Apple stores, but most are replenishing this week, and checks indicate sustained demand."

Based on his checks, Abramsky raised his iPhone sales outlook to 13.5 million units by the end of 2008. He said first weekend sales of the device are likely to contribute $10 million in revenue to the company's recently-ended June quarter, ultimately boosting the firm's total annual sales to $32.2 billion in fiscal 2008.

RBC maintains an Outperform rating on shares of Apple with a $160 price target.

[ View this article at AppleInsider.com ]

[BRussell]

Wow, that analysis of the screen resolution really makes no sense.

By the Spring of 2008, the analyst also see "a 3G/HSDPA iPhone" and says Apple appears to be planning a larger display (480x720, vs. 480x320 currently) for that specific model, or others.

"The higher definition version could be compelling, able to replay content in near HD as well as splay resolution of digital cameras and video recorders," he wrote. "Additionally, given 480x720 is the lowest resolution Apple TV supports, this higher resolution iPhone may also offer some form of personal entertainment integration to Apple TV."

Let's count the incorrect and/or bizarre statements in those few sentences.

[nagromme]

Originally Posted by BRussell

Wow, that analysis of the screen resolution really makes no sense.

Let's count the incorrect and/or bizarre statements in those few sentences.

Agreed. Who needs more res on that (relatively) tiny screen? In PPI, the iPhone is the highest res of any Apple device! Adding cost and complicating UI programming to pack in MORE than 160 PPI makes no sense in a 2"x3" screen. Comparing it to a computer makes no sense. Nor does discussion of high-def viewing.

[McHuman]

Many people don't know that you don't need to reformat AppleTV-res videos for iPhone. I put my 1:1 dvd rips into itunes, and the iPhone played them perfectly. It can downres on the fly, so no need for duplicates in your media library.

[Obelix]

Originally Posted by BRussell

Wow, that analysis of the screen resolution really makes no sense.

Let's count the incorrect and/or bizarre statements in those few sentences.

720 x 480 is the resolution of NTSC DVD movies.

The main fault of this report is that the analyst implies 8M iPhones sold on CY 2007 and 5.5M in CY 2008, for a total of 13.5M. He expects iPhone demand to decrease globally...go figure.

[AISI]

Originally Posted by AppleInsider

In a research report issued to clients on Thursday, analyst Mike Abramsky said his checks suggest Apple will handily meet its stated iPhone sales goal of 10 million units in the first 18 months.

The stated goal was 10 million units in 2008, the first full year of iPhone availability, not in the first 18 months.

Originally Posted by Engadget Live from Macworld 2007

1% market share is 10 million phones. "Exactly what we're trying to do, 1% market share in 2008, 10 million units and we'll go from there."

[Rolo]

Originally Posted by AISI

The stated goal was 10 million units in 2008, the first full year of iPhone availability, not in the first 18 months.

CORRECT! It drives me nuts when so many media morons and analysts get this wrong. I always thought the goal was 10m iPhones by June 30, 2008. I think that'll happen by February or March.

BTW, my price target for AAPL for October, 2008, is 215. For January, about 165. All analysts are going to give very conservative guidance.

[emig647]

The ipod stuff is starting to get to me. I really need a new ipod for my new kenwood Exelon kdc-x791 deck. It doesn't work with 4g ipods. Speculation for new iPods goes from August 07 -> Jan 08. That's a 6 month variable. IPods haven't been updated in over 300 days. I think they are very due for an update.

Reading the rest of this article tends to tell me this analyst doesn't know wtf he's talking about. So I'll pass on using this article as a basis for anything.

But god damn apple, hurry the f*ck up with the iPod updates.

[aegisdesign]

480x720 is the resolution of the Meizu miniOne iPhone clone btw, so the screen is a possibility at least.

http://www.macnn.com/articles/07/03/...clone.pricing/

The analyst also isn't stating a decrease in sales, he's stating only what he knows Apple have currently planned to produce. ie. they've a contract in place to manufacture 8m before the end of the year and a further 6-8m next year in place. If they're replacing the iPhone with a 3G iPhone sometime in spring 2008, they're obviously not going to manufacture more v1 iPhones after that.

[ChevalierMalFet]

240 ppi seems a bit far fetched for the near future, if only from a hardware availability standpoint.

[melgross]

Originally Posted by nagromme

Agreed. Who needs more res on that (relatively) tiny screen? In PPI, the iPhone is the highest res of any Apple device! Adding cost and complicating UI programming to pack in MORE than 160 PPI makes no sense in a 2"x3" screen. Comparing it to a computer makes no sense. Nor does discussion of high-def viewing.

Well, there are guys here who INSIST that they need 300 ppi on their monitors. If they think that, why wouldn't they also want it on their handhelds as well?

The report is here:

http://notablecalls.blogspot.com/200...ecks-show.html

[melgross]

Originally Posted by Obelix

720 x 480 is the resolution of NTSC DVD movies.

The main fault of this report is that the analyst implies 8M iPhones sold on CY 2007 and 5.5M in CY 2008, for a total of 13.5M. He expects iPhone demand to decrease globally...go figure.

No, they mean 8M phones in 2007 and 13.5 in 2008.

[melgross]

Originally Posted by AISI

The stated goal was 10 million units in 2008, the first full year of iPhone availability, not in the first 18 months.

No, Jobs said, quite clearly, 10 million THROUGH 2008. This was said in interviews. He meant by the end of 2008.

But that was a conservative number, no doubt, I'm sure they mean to break it.

[Rolo]

Originally Posted by melgross

No, Jobs said, quite clearly, 10 million THROUGH 2008. This was said in interviews. He meant by the end of 2008.

But that was a conservative number, no doubt, I'm sure they mean to break it.

Here's what Jobs said at MWSF: "Exactly what we're trying to do, 1% market share in 2008, 10 million units and we'll go from there."

He said in, not through, not the end of, not in 18 months. In. That means during. If anyone has any other quote from Jobs, please post it.

[melgross]

Originally Posted by Rolo

Here's what Jobs said at MWSF: "Exactly what we're trying to do, 1% market share in 2008, 10 million units and we'll go from there."

He said in, not through, not the end of, not in 18 months. In. That means during. If anyone has any other quote from Jobs, please post it.

He's spoken several times since then, mostly in interviews.

There's a wide understanding that he meant end of 2008. This statement that he meant otherwise is the oddball one.

But, as I said, it's probably conservative, and will likely be met before the end of the year.

It really doesn't matter anywayt what it was that he said. Sales will be what they are, and no matter what Apple's estimates are, investors will look at the actual numbers, and the effect they have on the bottom line, when all factors are taken into consideration.

This is what we should be interested in.

[AISI]

Originally Posted by melgross

He's spoken several times since then, mostly in interviews.

Here is another statement from Apple's Chief Operating Officer during a recent conference call.

Gene Munster - Piper Jaffray: Good afternoon. First in terms of the iPhone, Steve Jobs talked about 10 million units. Is that for fiscal '08 or calendar '08? Where did that number come from? Maybe just a little bit of logic behind that number.

Tim Cook: Gene, calendar year '08 is what Steve referenced in his keynote. The point that he made was that the worldwide market for total cell phones is somewhere around 1 billion and our objective of getting 1% of it would yield 10 million units across the calendar year.

Edit: During the keynote (extract on YouTube) he said: "this is exactly what we're gonna try to do… in 2008, our first full year in the market." Case closed.

[mrpiddly]

I dont gave a **** about any of this. Just open the iPhone up to developers to make "true" mobile applications that will work anywhere. Is that too much to ask ( i know it is too much to ask for)

[JimDreamworx]

Originally Posted by mrpiddly

I dont gave a **** about any of this. Just open the iPhone up to developers to make "true" mobile applications that will work anywhere. Is that too much to ask ( i know it is too much to ask for)

From a geek perspective, not too much to ask.

From a shareholder perspective, yes! If the share prices continue to rise because Apple is selling them well, and they continue to work well for those who demand them as is, there is no reason to offer opening them up until Apple feels they are ready.

One negative story about these things failing en masse, and the shares will tank. Can't have that happen just yet...

[TBaggins]

Meh. 70% of the article was stuff that people on the AI forums predicted weeks ago.

Way ta go, 'analysts'.

.

[techno]

Originally Posted by AppleInsider

Abramsky said the Cupertino-based firm's build plans appear to include inventory for both Canadian and European launches between the fourth quarter of 2007 and the second quarter of 2008, as well as inventory for an iPhone roll-out in Asia by mid-2008.

I wonder if this is any indication of a Canadian release in the works? Or is it just preparation in case of a deal.

[melgross]

Originally Posted by AISI

Here is another statement from Apple's Chief Operating Officer during a recent conference call.



Edit: During the keynote (extract on YouTube) he said: "this is exactly what we're gonna try to do… in 2008, our first full year in the market." Case closed.

Fiscal year means Sept. 30, '08.

Calender year means through Dec.31, '08.

Before you try to close your case, you first have to understand what was said. You have a ways to go.

[solipsism]

Originally Posted by AppleInsider

By the Spring of 2008, the analyst also see "a 3G/HSDPA iPhone" and says Apple appears to be planning a larger display (480x720, vs. 480x320 currently) for that specific model, or others.

That should be higher resolution display, not larger display.

The iPhone screen is excellent as it is. Anything more would just suck battery life. The Meizu iPhone-clone doesn't even exist yet. They are just building hype by releasing a mockup and a geek's tech spec fantasy.

[TBaggins]

Originally Posted by solipsism

That should be higher resolution display, not larger display.

The iPhone screen is excellent as it is. Anything more would just suck battery life. The Meizu iPhone-clone doesn't even exist yet. They are just building hype by releasing a mockup and a geek's tech spec fantasy.

To save time, the Meizu phone should simply be referred to as the iClone from here on out.

Its sad that they're such parasites.

.

[Thelonius]

Originally Posted by aegisdesign

The analyst also isn't stating a decrease in sales, he's stating only what he knows Apple have currently planned to produce. ie. they've a contract in place to manufacture 8m before the end of the year and a further 6-8m next year in place. If they're replacing the iPhone with a 3G iPhone sometime in spring 2008, they're obviously not going to manufacture more v1 iPhones after that.

I don't see that being so obvious. I can see Apple working to get a 3g iPhone out as quickly as possible based on statements and speculation, but by completely dropping v1 edge phones at the same time they in turn eliminate potential sales to large parts of the country that aren't in 3g coverage.

Now an iPhone that can switch edge/3g/wifi, hmm I wonder if that cramped little space can handle more circuitry. While I am off dreaming let's add a GPS chip too. A guy can dream.

[melgross]

Originally Posted by Thelonius

I don't see that being so obvious. I can see Apple working to get a 3g iPhone out as quickly as possible based on statements and speculation, but by completely dropping v1 edge phones at the same time they in turn eliminate potential sales to large parts of the country that aren't in 3g coverage.

Now an iPhone that can switch edge/3g/wifi, hmm I wonder if that cramped little space can handle more circuitry. While I am off dreaming let's add a GPS chip too. A guy can dream.

There are chips that contain much of the circuitry right now. Apple merely has to choose to use them.

http://www.extremetech.com/article2/...2089889,00.asp

Also, advanced GPS functions are available:

http://www.u-blox.com/news/3GSM.html

There are others.

[anantksundaram]

Originally Posted by aegisdesign

480x720 is the resolution of the Meizu miniOne iPhone clone btw, so the screen is a possibility at least.

http://www.macnn.com/articles/07/03/...clone.pricing/

Do you know anyone who owns (and uses) one? Also, you might find it interesting to check out the company's website -- esp. their "discussion" forums.

[bspears]

Originally Posted by McHuman

Many people don't know that you don't need to reformat AppleTV-res videos for iPhone. I put my 1:1 dvd rips into itunes, and the iPhone played them perfectly. It can downres on the fly, so no need for duplicates in your media library.

This is certainly not true in my case. My iPhone does not "down res on the fly". All of the DVD's that I ripped for AppleTV using MediaFork will NOT play on my iPhone. They will not even sync. Only when I go back and re-rip using iPod settings and not iPhone settings will they sync and play on my iPhone.

[melgross]

Originally Posted by bspears

This is certainly not true in my case. My iPhone does not "down res on the fly". All of the DVD's that I ripped for AppleTV using MediaFork will NOT play on my iPhone. They will not even sync. Only when I go back and re-rip using iPod settings and not iPhone settings will they sync and play on my iPhone.

If you buy a video, or movie, from itunes, at that rez, 640 x 480, they will play. If the rez is native DVD, 720 x 480, they must be re-ripped to 640 x 480.

[bwik]

AAPL 200 -- I've been saying this for several years now. People used to think I was smoking crack.

Now I can afford to!!