Entry-level iPhone could boost sales to 25m in 2008

[AppleInsider]

Although everyone's eyes are on the launch of a top-tier 3G iPhone next week, the release of a lower-cost entry phone could push Apple to ship more than twice as many phones as originally forecast this year, says RBC Capital Markets.

In a research note to investors, analyst Mike Abramsky of RBC estimates that either a secondary, entry iPhone model or an unusually low price for the near-certain 3G model could accelerate Apple's sales growth between 50 to 100 percent -- enough to boost the financial institution's earlier forecasts of 14 million units in calendar 2008 to between 20 and 25 million, doubling again in 2009 to as many as 40 to 50 million phones.

Such a climb could lead to between $2.7 billion and $5.4 billion in extra revenue for Apple over its fiscal 2009, Abramsky says.

In exchange, however, Apple also presents a short-term risk to investors, particularly if the Cupertino, Calif.-based company doesn't release expected products or disappoints its audience with high pricing or a lengthy delay between announcements and actual ship dates.

These concerns are softened by Apple's skill at maintaining demand, according to the analyst. North American demand for a new iPhone is particularly high, with roughly 70 percent of those in an RBC poll who are interested in the device describing themselves as potential first-time buyers rather than existing users.

Apple chief Steve Jobs is also expected to play a significant role by himself: rather than simply announce an updated iPhone, the company co-founder is predicted to fully flesh out iPhone 2.0's new features in his WWDC keynote speech, which Abramsky speculates could include video chat, GPS navigation, and browsing enhancements made possible through the faster 3G Internet connection of the touchscreen device.

The combined attention should also contribute to Mac marketshare outside of North America, the analyst says, as additional iPhone demand should further aid the "halo effect" created by exposure to Apple's lineup.

[ View this article at AppleInsider.com ]

[Walter Slocombe]

I really must look for a job in which I can state the obvious and get paid for it.

[Ireland]

Now Spam, what did I tell you? You remember when I said 27M? I wasn't actually joking!

[merdhead]

Here's how it works: release a premium product with a premium price tag so that its fixed in the mind of the consumer that's its premium. Later lower the price and release cheaper versions, while maintaining a premium version.

Also, someone should hit AI with a clue stick. They state things that a certain and 'near certain' and things that will never happen as 'certain'. The 3G phone has been confirmed by the fact that Japan is getting it, they only do 3G. Likewise, no Atom processor in Apple's handheld products.

[Bageljoey]

Originally Posted by merdhead

Here's how it works:... They state things that a certain and 'near certain' and things that will never happen as 'certain'.

Here is how it works: My brain slows down Friday in the PM and I can't make sense of what I read...

[SpamSandwich]

Originally Posted by Ireland

Now Spam, what did I tell you? You remember when I said 27M? I wasn't actually joking!

I look forward to the market being disappointed at whatever the news is, the stock dropping like a rock, and everyone buying more AAPL when it does... and of course we'll all buy whatever Steve tells us to buy.

[SpamSandwich]

Originally Posted by Bageljoey

Here is how it works: My brain slows down Friday in the PM and I can't make sense of what I read...

My brain's been doing that daily for years.

[Booga]

In summary, Apple could release expensive or cheap phones and might sell many or not that many, and they might be released immediately or after awhile. Brilliant analysis!

[RogerMostad]

How about:

2.8 inch screen 8Gig basic phone no GPS 2.5G No Web no apps

3.2 inch screen 16Gig revamp of the current 2.5G version (slimmer)

4 inch screen 16&32G 3G GPS a bit chunkier screen is longer not much wider...

[icfireball]

Originally Posted by RogerMostad

How about:

2.8 inch screen 8Gig basic phone no GPS 2.5G No Web no apps

3.2 inch screen 16Gig revamp of the current 2.5G version (slimmer)

4 inch screen 16&32G 3G GPS a bit chunkier screen is longer not much wider...

No web? That's the stupidest thing I've ever heard. What the hell is the point of a mobil platform with out the internet?

4 inch screen would probably be too big for comfort.

[Bageljoey]

Originally Posted by icfireball

No web? That's the stupidest thing I've ever heard. What the hell is the point of a mobil platform with out the internet?

4 inch screen would probably be too big for comfort.

Well, some people don't give a hoot about "mobil platform," they don't see the need for the internet in their pocket. I know people who would like to be able to combine their phone with their iPod. And they want to be able to do it cheep. Being able to double as a picture holder and video viewer would make it more apealing. Visual voicemail would be an added bonus. And games wouldn't hurt. All this could be done without a direct internet connection, and it might be just what satisfies a segment of the market.
Incidentally, it would also be good for the up-sell. People who would never consider a $200+ phone might come in for a $179 base model and get hooked on the true "mobile platform" when in the store...

[ktappe]

Originally Posted by Bageljoey

Well, some people don't give a hoot about "mobil platform," they don't see the need for the internet in their pocket.

Then why on earth would they get an iPhone?

[EagerDragon]

could, could could.
Not going to happen, they are releasing a GSM phone and all the could is not going to make Apple go in a different direction.
Geee.

[Bageljoey]

Originally Posted by ktappe

Then why on earth would they get an iPhone?

Did you read any of the rest of my post?

Originally Posted by Bageljoey

I know people who would like to be able to combine their phone with their iPod. And they want to be able to do it cheep. Being able to double as a picture holder and video viewer would make it more apealing. Visual voicemail would be an added bonus. And games wouldn't hurt. All this could be done without a direct internet connection, and it might be just what satisfies a segment of the market.

I'm not saying it is what I want or what you would want, but I believe that there are many people would be happy with this (if it was sufficiently cheep).

[JeffDM]

Originally Posted by Ireland

Now Spam, what did I tell you? You remember when I said 27M? I wasn't actually joking!

Maybe he did a search, found your numbers and ran with it.

[Ireland]

Originally Posted by RogerMostad

How about:

2.8 inch screen 8Gig basic phone no GPS 2.5G No Web no apps

No Apps? You have taken this too far!!! A phone app would be handy no?

[Ireland]

Originally Posted by JeffDM

Maybe he did a search, found your numbers and ran with it.

Unlikely cause the search here is too much work

[winterspan]

It's a *MUCH* better idea for Apple to let carriers subsidize the damn thing. They should launch the lowest iPhone 3G for $399 but have the carrier subsidize $200 off with a 2-year contract, so final price would be $199. Then in 3-5 months down the road, they can lower the price and get it down to $99. That would make the iphone go like crazy! Why make a smaller model when you can have the carriers pay for difference?

[Dunks]

Is anyone really surprised by this?

No doubt some Apps will be offered free and some will be offered at a cost. The App store gives every application an equal footing to be marketed to a consumer of the device which means consumers will choose one app over another mainly based on functionality and price. I'm sure the relevant market forces will sort the rest out.

I wonder if app upgrades will be handled as a new purchase or if they can be downloaded at a reduced rate by owners of the existing app.

I hope we see some super creative applications on the iPhone. It's going great to have a company like Apple responsible for quality control. It will certainly take the angst out of installing applications onto a device as intimately coupled personal details as the iPhone. You only have to look at Facebook's application retard rodeo to see what extent companies will go to farm your personal information.

[Walter Slocombe]

Originally Posted by RogerMostad

How about:

2.8 inch screen 8Gig basic phone no GPS 2.5G No Web no apps

and everyone will complain about how underpowered/crap it is

Originally Posted by RogerMostad

3.2 inch screen 16Gig revamp of the current 2.5G version (slimmer)

and everyone will complain about how it isnt REALLY an improvement (smaller screen and "still only 16GB")

Originally Posted by RogerMostad

4 inch screen 16&32G 3G GPS a bit chunkier screen is longer not much wider...

and everyone will complain how EXPENSIVE it is.


get ready for the wave of moaning unimpressed whingers, steve will show a new iPhone, and they will come

[Walter Slocombe]

Originally Posted by JeffDM

Maybe he did a search, found your numbers and ran with it.

you REALLY think an analyst would do something, SO obvious??????????

[ncee]

Originally Posted by icfireball

No web? That's the stupidest thing I've ever heard. What the hell is the point of a mobil platform with out the internet?

4 inch screen would probably be too big for comfort.

Unless the new iPhone, can be turned sideways like the iPod Touch, or can it already do this?

Skip

[Ireland]

Originally Posted by Dunks

Is anyone really surprised by this?

Someone will be, but I predicted it!

[JeffDM]

Originally Posted by Walter Slocombe

you REALLY think an analyst would do something, SO obvious??????????

No, but people here already think that of the usual suspects.

[icfireball]

Originally Posted by ncee

Unless the new iPhone, can be turned sideways like the iPod Touch, or can it already do this?

Skip

The iPhone can already be turned sideways. The iPod Touch is essentially exactly like the iPhone except a cheaper body and no camera and no phone features.

[disillusion]

Actually, I would be strongly interested in an iPhone nano - as I already have an iPod touch and find it quite useful to have a dedicated mobile phone.

However, the real dificulty is the differentiation: Which part of the iPhone may be considered expendable? Most features of the iPhone are already offered by entry-level mobile phones, thus reducing the features (iPod-capabilities, internet, 3G, camera or bluetooth) is not a viable alternative. And I doubt that Apple will remove the WiFi components for an iPhone nano. At best, Apple decides to create a slimmer, smaller version of the current iPhone (without GPS, sub-par camera, no videoconferencing) and brands it as iPhone nano, while introducing the spiced-up iPhone 2.0 with enhanced capabilities as the premium device.

I am sure for some readers the question remains: Why the heck does he need an iPhone then? Plain simple: I love the user interface, the general possibilities of the touch-screen and most importantly the perfect integration within the Mac-OS-X-platform. The iPod nano is currently my all-encompassing digital assistant, storing my tasks, appointments, e-mails, contacts, photos and music. I would not mind a smaller screen, I just want a quality phone made by Apple with all its „appl-ey“ magic. For the iPhone nano, please don't sacrifice the WiFi/EDGE capabilities, for most tasks it is easily sufficient!

These are my fancy ideas, partly based on logical and wishful thinking, as well as under commercial and marketing aspects.

[piot]

For all those complaining about "no apps" and " no web"... you are missing the larger picture.

Which is .... that one day soon sales of iPods (particularly Nanos) and other brands of mp3 players are going to dwindle as more and more folk just use their simple music phone to consume their mobile media.

Why shouldn't Apple grab a slice of that pie (which they virtually created) and keep a customer for their 'mobile platform' when they are ready for it?

NOTE. I see a lot of evidence of this in the UK already. Groups of kids annoyingly 'sharing' their tunes through tinny cell phone speakers while the rest of us yearn for the good old days of .... (insert favourite 60 year old rocker here).

[nvidia2008]

iPhone nano won't come out until Christmas frenzy, I think... maybe Sep 2008. The new 3G model will need its premiere time for a few months, particularly with all the iPhone 2.0, 3G, AppStore, GPS stuff... A base line would sell like crazy, but distract Apple and resellers too much, I think. I think Apple is going to go for the jugular with just one main model, maybe a few colours, and fairly balanced price points of 16GB/ 32GB/ carrier incentives/ etc/ etc.

[Ireland]

Originally Posted by nvidia2008

iPhone nano won't come out until Christmas frenzy, I think... maybe Sep 2008.

I'm sticking with my October '08 bet from last year.

[zeasar]

Originally Posted by Ireland

I'm sticking with my October '08 bet from last year.

Im betting iphone "lite" is the "one more thing" in tomorrow's WWDC, which comes in white.

[icfireball]

Originally Posted by zeasar

Im betting iphone "lite" is the "one more thing" in tomorrow's WWDC, which comes in white.

No. I'm going to have to go with Ireland here. No iPhone "lite" or iPhone nano of any kind tomorrow. I would expect that pre-holiday shopping season... so September/October.

[macarena]

I am with Ireland here --

I think something real cheap - like 179 USD - with 4GB Flash card, no Safari, no WiFi, no 3G, no GPS, no fancy apps - just a simple, easy to use, sleek, iPod that can also make phone calls - something they can sell unlocked and capture the lower end of the market - in places like India and China. This wont be a smartphone - just a phone, with music. And it will still offer Apple's ease of use, well thought out user interface, etc.

There is a lot of demand for the Apple Kool-aid, and I am sure people will lap it up. The question isnt if Apple can do - of course they can - the question is of why they should do it - And the reason for that is very simple - give people something else to spend their money on - most people have an iPod - and this is the kind of stuff people could easily look to get.

They can sell "basic" apps and Games for this phone, tie it up with iTunes for ringtones, etc. Can get a lot of revenue from this phone. This will be a great way to get the masses prepped up to buy the bigger better iPhone in due course. Can also make a lot of money off accessories for this phone.

Of course, a lot of people would find it pointless - but I think there will still be a lot of buyers for a device like this.

Apple could also be very cruel, and sell a cheap phone that will work in a basic way out of the box, but if you want any goodies - like Ringtones, games, apps, etc., then it will work only with iTunes running on a Mac - will not work with iTunes on Windows for at least 1-2 years. This will create additional impetus for people to start looking at Macs.

It is hightime there is something that is feasible on a Mac, but not on a PC. For way too long, things have been possible on PCs, but either later, or never on Macs. High time Apple starts changing the pattern here.

[Bageljoey]

Originally Posted by macarena

Apple could also be very cruel, and sell a cheap phone that will work in a basic way out of the box, but if you want any goodies - like Ringtones, games, apps, etc., then it will work only with iTunes running on a Mac - will not work with iTunes on Windows for at least 1-2 years. This will create additional impetus for people to start looking at Macs.

It is hightime there is something that is feasible on a Mac, but not on a PC. For way too long, things have been possible on PCs, but either later, or never on Macs. High time Apple starts changing the pattern here.

Of course this would be satisfying to the Mac faithful and would seem to be due payback for years of slights going the other way.
BUT I think that Apple has been very careful (and smart) not to go down this road. All of the things that Apple has done cross platform from QuickTime, the iPod and iTunes in the old days to, of course, the iPhone and even Bootcamp lately have helped to foster Apple's image as a maker of products that work. This is why the Halo has been so effective. They didn't make the iPod tie in to a Mac *better* than to a PC--they just made the iPod work very well and that left people with PCs wishing there computer was as well thought out.
If you start forcing people to switch to get full functionality you will have annoyed and passive agressive switchers just waiting to complain instead of excited and hopeful ones who may become evangelists. If you have to force people to switch that is a sign of weakness--the perfect switcher comes willingly and with the fervor or a convert.

[icfireball]

Originally Posted by macarena

I am with Ireland here --

I think something real cheap - like 179 USD - with 4GB Flash card, no Safari, no WiFi, no 3G, no GPS, no fancy apps - just a simple, easy to use, sleek, iPod that can also make phone calls - something they can sell unlocked and capture the lower end of the market - in places like India and China. This wont be a smartphone - just a phone, with music. And it will still offer Apple's ease of use, well thought out user interface, etc.

There is a lot of demand for the Apple Kool-aid, and I am sure people will lap it up. The question isnt if Apple can do - of course they can - the question is of why they should do it - And the reason for that is very simple - give people something else to spend their money on - most people have an iPod - and this is the kind of stuff people could easily look to get.

They can sell "basic" apps and Games for this phone, tie it up with iTunes for ringtones, etc. Can get a lot of revenue from this phone. This will be a great way to get the masses prepped up to buy the bigger better iPhone in due course. Can also make a lot of money off accessories for this phone.

Of course, a lot of people would find it pointless - but I think there will still be a lot of buyers for a device like this.

Apple could also be very cruel, and sell a cheap phone that will work in a basic way out of the box, but if you want any goodies - like Ringtones, games, apps, etc., then it will work only with iTunes running on a Mac - will not work with iTunes on Windows for at least 1-2 years. This will create additional impetus for people to start looking at Macs.

It is hightime there is something that is feasible on a Mac, but not on a PC. For way too long, things have been possible on PCs, but either later, or never on Macs. High time Apple starts changing the pattern here.

A lower-end iPhone model may not have WiFi (although I think it will), but it will have internet and Safari of some kind, even if it's just over the cell network. All recent (within the past few years) cell phones have some internet capability, even if they are not smart phones.