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Apple could sell 12 million iPhones next year - analyst

post #1 of 40
Thread Starter 
Apple Computer could sell as many as 12 million iPod-enabled cell phones next year, potentially boosting earnings by as much as 10 percent above current Wall Street estimates, one analyst says.

While he does not expect Apple to announce a cell phone at its Showtime event this week, PiperJaffray analyst Gene Munster told clients on Monday that he continues to expect the company will ship an "iPhone" within the next 4 to 6 months.

"That said, we have not seen any concrete evidence that the product is near completion or launch," Munster wrote in a research note.

Still, the analyst notes that there have been several indicators that a cell phone project at Apple is underway, including the company's registration for the iPhone.org domain name and its "Mobile Me" trademark filing.

Munster, in his research note, also referred to recent comments from Japanese cell phone maker, Softbank, and Apple's own chief financial officer, Peter Oppenheimer.

"Also, given music enabled handsets are being introduced by potential handset maker competitors (ex: LG Chocolate), Apple will likely need to get in the game fairly soon to avoid missing the early adopters," he wrote.

Assuming Apple ships an iPhone early next year, at the Macworld 2007 trade show or a special event shortly thereafter, Munster expect the company will sell between 8 million and 12 million units in the full calendar year.

"We believe the most likely iPhone buyers would be those who have previously owned a higher average selling price hard disk drive iPod," he told clients. "We estimate that by the end of the December 2006 quarter, Apple will have shipped 34.5 million hard disk drive iPods at an average price of $323."

"Assuming 1.2 iPods per owner and assuming 33 percent of these higher average selling price iPod buyers buy an iPhone in 2007, we estimate approximately 10 million iPhones could be sold," the analyst added.

As part of his 2007 iPhone sensitivity, Munster is assuming an iPhone operating margin of 10 percent -- slightly less than the 12 to 15 percent achieved by major handset makers such as Nokia and Motorola.

"We are using a 10 percent operating margin in our sensitivity, which is more in line with the op margin of Palm," he wrote. "We believe Palm provides a better margin benchmark than Nokia and/or Motorola, given Palm is focused on high end devices and the devices are made with an ODM partner, which we would expect to be the case for the iPhone."

Apple currently has an overall company operating margin of 13 percent, so while the iPhone would add incremental revenue and earnings, it could have a slight negative margin impact, Munster said.

The analyst maintains an "Outperform" rating on shares of Apple with a price target of $99.

Last week, American Technology Research analyst Shaw Wu said his research indicated that an Apple-designed smart phone has moved from concept to prototype and recently has progressed to near completion as a production unit.

Wu later pointed to a recent Apple patent filing as proof that Apple holds ambitions to enter the cell phone market.
post #2 of 40
Well, I know one thing... I'll be a small percentage of that 10%. Assuming its a smart phone, of course. I have no need for just a regular cell phone.
post #3 of 40
Like many other people, I would never, ever buy an iPod. It just isn't my cup of tea. I'd prefer silence to music blaring directly into my ears. And I even enjoy hearing what's going on around me.

But I'd buy an Apple iPhone in a heartbeat. I think this analyst is greatly underestimating the number of potential buyers of the iPhone.
post #4 of 40
i just want a regular phone. i don't need all that extra b.s.
post #5 of 40
If Apple sold about 30 million iPod's in 2005, then I believe 12 million iPhones/iPod Phones® to be a conservative number. The reason he's being conservative is that fact that market-wise the device doesn't exist yet. Hovever if the iPhone has the cool factor, and the ease-of-use that the iPod has, then you can double those numbers straight away. Hell, you could even treble those numbers. It "must" be a regular phone though.
Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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post #6 of 40
will they have there own network or will you be able to use on your network?
if they have there own network they may see a lower sales then if you can use it more networks.
post #7 of 40
Quote:
"Also, given music enabled handsets are being introduced by potential handset maker competitors (ex: LG Chocolate), Apple will likely need to get in the game fairly soon to avoid missing the early adopters," he wrote.

Right, so he's supposed to be tracking Apple's market strategy?

Next.
post #8 of 40
12 million isn't conservative. If Apple sells 12 million next year, that's just slightly less than Sony Ericcsson's Walkman phone sales this year at current sales rates. SE sold 15 million phones last quarter worldwide of which about 25% were walkman branded.

Apple would be doing damned well to overtake SE or LG from no market to being the fifth or sixth biggest mobile handset company in the world. It would also mean they'd have to ship worldwide too as they aren't going to sell that many with just the US market or even the US AND European markets.

Source of figures: http://www.cellular-news.com/story/19008.php
post #9 of 40
I'm a minority but...I hate cell phones (how do you guys do it? I could never allow myself to make myself available to talk to anyone at anytime) and I don't particularly care for listening to music outside my house.
post #10 of 40
Quote:
Originally Posted by kim kap sol

I'm a minority but...I hate cell phones (how do you guys do it? I could never allow myself to make myself available to talk to anyone at anytime) and I don't particularly care for listening to music outside my house.

I hear what you're saying, most people have no control over their cellphones (or at least it seems that way). For me, I carry my cell absolutely everywhere. However, I am not available to everyone all the time and I do not use it everywhere. For instance in a restaurant. I think every cell nowadays has an silence/ignore button that most people need to learn how to use it. Also, before bed, I turn the phone off.

As for the music, I only use my iPod at home or at the gym. Plus, because I have my cell with me all the time, so it must fit nicely in my pocket. The only thing that is ever hanging off my belt is a security badge for work. Anything that's going to replace my current phone must be smaller or same size.
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post #11 of 40
Given the complete lock that most US phone providers have over their customers' handset choices, I just can't see a scenario in which my carrier (Sprint) would ever offer an Apple phone.
post #12 of 40
Quote:
Originally Posted by icibaqu

i just want a regular phone. i don't need all that extra b.s.

There are several of those currently available, so looks like you're in luck.
post #13 of 40
Quote:
Originally Posted by chabig

Given the complete lock that most US phone providers have over their customers' handset choices, I just can't see a scenario in which my carrier (Sprint) would ever offer an Apple phone.

I agree. That's why the micro-carrier approach makes the most sense for Apple. Additionally, Apple would like this model because it gives them end-to-end control of the sales and customer-service experience. They don't have to direct you to anyone for anything.
post #14 of 40
Apple, please, make it a SMART phone with built-in Mac OS X mobile inside and we will place large corporate orders to use it as the ultimate wireless comptuerless Keynote and PowerPoint presentatio remote tool! Thanks.
post #15 of 40
Quote:
Originally Posted by kim kap sol

I'm a minority but...I hate cell phones (how do you guys do it? I could never allow myself to make myself available to talk to anyone at anytime).

The more recent models have the capability of being turned off when you don't want to be reached.
post #16 of 40
Quote:
Originally Posted by wilco

The more recent models have the capability of being turned off when you don't want to be reached.

Yes, you can turn them off, but for the urgent matters,I always keep my phone on, depending of the situation I might turn it to silent however. Best way is to only give your private number to people who know when it's appropriate to call you, and try to avoid company paid phones, firms like to believe that if they give you a this marvelous asset they can call you when ever they want.
post #17 of 40
Quote:
Originally Posted by Project2501

Yes, you can turn them off, but for the urgent matters,I always keep my phone on, depending of the situation I might turn it to silent however. Best way is to only give your private number to people who know when it's appropriate to call you, and try to avoid company paid phones, firms like to believe that if they give you a this marvelous asset they can call you when ever they want.

My phone has two numbers. I've my business number which gets switched to answerphone when I'm not working and my personal number which is a closely guarded secret. Depending on which rings, I get a different ringtone.

Easy.
post #18 of 40
--Why would you want it to be a "regular" phone?
Considering how popular text messaging is now, Apple would be serving the needs of their users by providing more smart phone capabilities.

--Problems with carriers
Apple would be better off just selling a $300 GSM phone direct to consumer. People can then pop in a GSM chip to use with their existing GSM carrier or new carrier. Keep the same number, contacts... very easy.

Qwerty keyboard
GSM
wifi
bluetooth 2.0
USB 2.0
post #19 of 40
Quote:
Originally Posted by jacob1varghese

--Why would you want it to be a "regular" phone?
Considering how popular text messaging is now, Apple would be serving the needs of their users by providing more smart phone capabilities.

--Problems with carriers
Apple would be better off just selling a $300 GSM phone direct to consumer. People can then pop in a GSM chip to use with their existing GSM carrier or new carrier. Keep the same number, contacts... very easy.

Qwerty keyboard
GSM
wifi
bluetooth 2.0
USB 2.0

1000% Agree. Gimme that I'll call it a day.
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post #20 of 40
Quote:
Originally Posted by jacob1varghese

--Why would you want it to be a "regular" phone?
Considering how popular text messaging is now, Apple would be serving the needs of their users by providing more smart phone capabilities.

--Problems with carriers
Apple would be better off just selling a $300 GSM phone direct to consumer. People can then pop in a GSM chip to use with their existing GSM carrier or new carrier. Keep the same number, contacts... very easy.

Qwerty keyboard
GSM
wifi
bluetooth 2.0
USB 2.0

Cool, sign me up. As long as it's at or under 4.5" x 2" x 1".
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post #21 of 40
Quote:
Originally Posted by jacob1varghese

--Why would you want it to be a "regular" phone?
Considering how popular text messaging is now, Apple would be serving the needs of their users by providing more smart phone capabilities.

--Problems with carriers
Apple would be better off just selling a $300 GSM phone direct to consumer. People can then pop in a GSM chip to use with their existing GSM carrier or new carrier. Keep the same number, contacts... very easy.

Qwerty keyboard
GSM
wifi
bluetooth 2.0
USB 2.0

Text messaging is more popular in Europe where they have more expensive phone service. Beyond kids, not many people use "texting" in the US.

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post #22 of 40
Apple makes the phone.

And then what, Gene? Then what. Analyze that.
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post #23 of 40
Quote:
Originally Posted by SpamSandwich

Text messaging is more popular in Europe where they have more expensive phone service. Beyond kids, not many people use "texting" in the US.

I'm 29. Most of my friends are in their late 20s or early 30s. We all text message.
More people will text message once it becomes easier to do so - qwerty keypads.
To see how popular TXT messaging can get here, consider the range of people who IM at work. At the companies that I've worked at, it's been used actively by people in their 20-50s.
post #24 of 40
Quote:
Originally Posted by jacob1varghese

Apple would be better off just selling a $300 GSM phone direct to consumer. People can then pop in a GSM chip to use with their existing GSM carrier or new carrier. Keep the same number, contacts... very easy.

It's going to be doubly hard to compete against the carrier-subsidized phones if they do that.
post #25 of 40
Quote:
Originally Posted by Joe_the_dragon

will they have there own network or will you be able to use on your network?
if they have there own network they may see a lower sales then if you can use it more networks.

If they have their own nwtwork, and they get 3 million customers after, say conservatively, two years, at an average of $50 a month, it really adds up.

That would be more than from just selling phones. And if it became more popular still, the revenues would continue to go up. Do the numbers.
post #26 of 40
I think a new term needs to be created that defines a product that does not yet exist and that has been entirely created by the media, but that has already sold millions units, all in the minds of business analysts and industry pundits.

I propose 'steamvaporware'.
post #27 of 40
Quote:
Originally Posted by macinthe408

I think a new term needs to be created that defines a product that does not yet exist and that has been entirely created by the media, but that has already sold millions units, all in the minds of business analysts and industry pundits.

I propose 'steamvaporware'.

Welcome, that's a good beginning.
post #28 of 40
Quote:
Originally Posted by jacob1varghese

I'm 29. Most of my friends are in their late 20s or early 30s. We all text message.
More people will text message once it becomes easier to do so - qwerty keypads.
To see how popular TXT messaging can get here, consider the range of people who IM at work. At the companies that I've worked at, it's been used actively by people in their 20-50s.

Yep. I pointed this out in another thread yet despite hard facts certain argumentative sods on here still think texting is a fad and a dying one at that.
post #29 of 40
Quote:
Originally Posted by JeffDM

It's going to be doubly hard to compete against the carrier-subsidized phones if they do that.

Yup. It's $300 more than I pay for my current smart phone.
post #30 of 40
Quote:
Originally Posted by jacob1varghese

I'm 29. Most of my friends are in their late 20s or early 30s. We all text message.
More people will text message once it becomes easier to do so - qwerty keypads.
To see how popular TXT messaging can get here, consider the range of people who IM at work. At the companies that I've worked at, it's been used actively by people in their 20-50s.

Malus don't count. They are not your average consumer. : )
post #31 of 40
Quote:
Originally Posted by aegisdesign

Yep. I pointed this out in another thread yet despite hard facts certain argumentative sods on here still think texting is a fad and a dying one at that.

Heh heh. What exactly is a sod anyway? Be gentle.
post #32 of 40
lol what iphone? I love how they can make predictions like this for something that doesnt even exsist yet haha
post #33 of 40
Quote:
Originally Posted by Cato988

lol what iphone? I love how they can make predictions like this for something that doesnt even exsist yet haha

Uh, well. You can't make predictions about something that might come out, if it has already come out.
post #34 of 40
Quote:
Originally Posted by kim kap sol

I'm a minority but...I hate cell phones (how do you guys do it? I could never allow myself to make myself available to talk to anyone at anytime) and I don't particularly care for listening to music outside my house.

Currently, I hardly ever carry my cell phone with me. I usually just leave it in my car, and I turn it on only to make outgoing calls. No one is expecting to reach me on my cell unless I'm travelling.

But give me a cell phone that's easy to carry and does enough cool things to justify the burden of carrying it around, and I will carry it around with me. That doesn't mean I'll be handing out my mobile number to everyone -- I'll still encourage most people to call me on my land line most of the time.
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post #35 of 40
Quote:
Originally Posted by aegisdesign

12 million isn't conservative.

Is too!
Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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post #36 of 40
Quote:
Originally Posted by macinthe408

I think a new term needs to be created that defines a product that does not yet exist and that has been entirely created by the media, but that has already sold millions units, all in the minds of business analysts and industry pundits.

I propose 'steamvaporware'.

I love it! Now copyright it. NOW.
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post #37 of 40
Quote:
Originally Posted by melgross

Heh heh. What exactly is a sod anyway? Be gentle.

noun Chiefly British Slang.
1.\tsodomite; homosexual.
2.\tchap; fellow; guy.
3.\tchild; kid; brat. Compare bugger.
verb (used with object), sod?ded, sod?ding. Chiefly British Slang.
4.\tto damn: Sod the bloody bastard!
Verb phrase
5.\tsod off, to leave (usually as an imperative): Why don't you just sod off.


Take your pick but generally not the first one in polite conversation.
post #38 of 40
Quote:
Originally Posted by aegisdesign

noun Chiefly British Slang.
1.\tsodomite; homosexual.
2.\tchap; fellow; guy.
3.\tchild; kid; brat. Compare bugger.
verb (used with object), sod?ded, sod?ding. Chiefly British Slang.
4.\tto damn: Sod the bloody bastard!
Verb phrase
5.\tsod off, to leave (usually as an imperative): Why don't you just sod off.


Take your pick but generally not the first one in polite conversation.

Well, well, you don't mince words, do you?
post #39 of 40
Quote:
Originally Posted by melgross

Well, well, you don't mince words, do you?

dictionary.com definition.

I think Americans take offence a lot easier than Brits. Sod or Bugger off is quite a friendly term. On the other hand we'd take great offence at shit or crap used in normal conversation.
post #40 of 40
Quote:
Originally Posted by aegisdesign

dictionary.com definition.

I think Americans take offence a lot easier than Brits. Sod or Bugger off is quite a friendly term. On the other hand we'd take great offence at shit or crap used in normal conversation.

I've only heard the "sod off". Not the more direct use you seemed to prefer there.

But, "bloody" doesn't seem to be a big thing, but supposedly it means more there. Refering to Henery the 8th or some such thing, that I used to know but forgot.
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