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iPhone 3G seen 'repeating history' with record 14m sales in 2008

post #1 of 46
Thread Starter 
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.
post #2 of 46
only 14m? I would hazard a guess slightly more than that. but who knows
post #3 of 46
Big difference between then and now and between iPod and iPhone.


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.
post #4 of 46
Quote:
Originally Posted by monstrosity View Post

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 pricessans the iPod Touch which seems inevitable for change come July 11thuntil 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?
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post #5 of 46
I don't think it's possible to underestimate how well the iPhone will sell. But the stock price is taking a well deserved breather considering that there are no iPhones to be sold and folks shopping for a phone will go to Palm centro or Blackberry because of the impulse buy. Apple made a huge blunder by not having product ready while it has got everyones attention. But soon July 11th will be here and all will be forgiven.
post #6 of 46
Quote:
Originally Posted by solipsism View Post

I think so too. Especially if Apple doesn't lower the price of iPods for awhile. For instance, if they keep iPod pricessans the iPod Touch which seems inevitable for change come July 11thuntil 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?

the way you ask those questions makes me think you got back in at around $170
post #7 of 46
Quote:
Originally Posted by quinney View Post

the way you ask those questions makes me think you got back in at around $170

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.
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post #8 of 46
Quote:
Originally Posted by solipsism View Post

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 would be set!
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post #9 of 46
Quote:
Originally Posted by JakePhone View Post

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.
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post #10 of 46
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)

=)
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post #11 of 46
Quote:
Originally Posted by iVlad View Post

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.
post #12 of 46
The iPhones sales in all foreign markets will be affected by the individual carriers price. In Ireland the initial launch had such a punitive pricing structure that the iPhone barely made a splash. I am waiting to see if O2 removes the 1Gb. monthly download limit on July 11th before I consider a purchase.
post #13 of 46
If you want a contract the iPhone is quite cheap in Ireland. At this price I can see them selling a few.

It's:
Quote:
€99 on the €65 tariff and €169 on the €45 tariff
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post #14 of 46
My wife lost her 8GB iPhone about a month ago. My iPhone is also an 8GB, both purchased on day 1. We have a family plan that runs $130/month incl tax and 700 min/month. We have 5000 rollover minutes available. I am not sure what the new charges will be if I give her my iPhone and buy an iPhone 3G for myself. The data rate for the new iPhone will be $30 with no SMS, the data for the old will be $20 with 200 SMS. I suppose the rate with be about $141 incl tax. I also assume that I can use some of the 200 SMS on my iPhone 3G, but that may not be the case. My two $100 rebates will pay for the new phone.
post #15 of 46
Quote:
Originally Posted by Bageljoey View Post

I think Apple will sell 17 iPhones in the next quarter.

I think you're wrong
- they'll only sell 12!
post #16 of 46
It's nice that ATT is giving you the option to upgrade and sign a new contract...every other carrier makes you sign an additional 2 yr contract if you try to upgrade before your contract expires, or you have to pay full retail price on the phone.

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?
post #17 of 46
Odd, because I don't know many people that don't send MMS.
Quote:
Originally Posted by irnchriz View Post

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.
post #18 of 46
Quote:
Originally Posted by BlackSummerNight View Post

...
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
post #19 of 46
Quote:
Originally Posted by boss1 View Post

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.
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post #20 of 46
Quote:
Originally Posted by Bageljoey View Post

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 would be set!

That was very funny!
post #21 of 46
Quote:
Originally Posted by Bageljoey View Post

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 would be set!

The mantra when I worked at Schwab was:

Bears make money,
Bulls make money,
Pigs lose money.
post #22 of 46
Quote:
Originally Posted by efithian@mac.com View Post

I also assume that I can use some of the 200 SMS on my iPhone 3G, but that may not be the case. My two $100 rebates will pay for the new phone.

The SMS's are tied to a particular phone number (ie - "line of service")

You can use the $100 rebates for anything in the Apple store, except for more iPhones. This may have changed, but it was the policy early on.
post #23 of 46
Quote:
Originally Posted by mh71;1266036Y

ou can use the $100 rebates for anything in the Apple store, except for more iPhones.

The best use of that $100 is for some decent headphones with a built in mic.
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post #24 of 46
Mike Abramsky is just being cautious, his reputation is at stake and nobody knows what will happen until it happens!

But since I got no rep to uphold, I would say that, as per another poster, there is indeed a comparison to be made with the iPod:
  1. the iPod was total novelty as this Apple well designed product that captivated the masses. What I'm saying is that the iPod has already set the stage, Apple is now a household name for a product such as the iPhone
  2. the iPod didn't have THIS international exposure, it was quietly launched through Apple's traditional sales channels. In my (European) country it didn't achieve significant sales and did NOT set the standard as people still refer to mp3 players as, well "mp3s". On the other hand, the iPhone is being heavily promoted by the cellphone networks, already setting pre-register lists and having huge front page ads in their web sites. So the iPhone is having new sales channels which are really power houses at that. I obviously refer to companies like Vodafone in Europe, not AT&T from what I've seen - when the iPhone was launched, mind you not announced, I searched through their web site and couldn't find it anywhere, it looked like they didn't want to sell it at all!
  3. iPod users will buy the iPhone in droves. The reason why Jobs didn't increase the iPhone capacity was 1) price and 2) they complement each other very well - I have my 30GB video iPod set in the glove compartment of my car connected to the Pioneer stereo.
  4. iPods are targeted by a much younger (statistical) population, iPhones are lusted after by elders, youth, professionals, housewives, rich wo/men + poor wo/men, just about EVERYBODY craves the iPhone
So indeed I expect the iPhone (sales) to explode (exponentially) and way much faster than with the iPod (the stage is set, there's no land to be cleared). The international enthusiasm is unbelievable, I have read posts from India natives that just can't wait for it. Actually, (I have posted in Google Finance a few times that) we'll see a much bigger explosion from developing countries like China, India and Russia than anywhere else because for them buying an iPhone is like an American buying a car - they will buy it on credit, spend half a year's salary on it, flash it around to get chicks etc!

Last but not least, the iPhone is Apple's answer to the poor man's computer, the iPhone is the EeePC/Wind killer, it is a computing platform and soon there will be many sales coming from its computing capabilities. Maybe in September we'll already have the 4" iPhone and the 7" mini-tablet to drive people crazy and AAPL through the roof.

Mike was very conservative, there are multiple driving forces pushing the iPhone sales to never before seen numbers. If there was an exponential iPod explosion pertaining to a single yet unset market - US - just extrapolate that to a global dimension when there's little name branding recognition work to be done and it's "been there, done that" time. You won't be able to, you'll get scared with the numbers you come up with and you will back off to a silent observing position and state conservative numbers like Mike.

I did some (not serious) number crunching - and that was before Telefonica's 10+ country announcement - and I was baffled with 100 million iPhones by end 2009. And we should expect the other Japan network, China (maybe both China Mobile and the other) and Russia to be added to the list

It's not that difficult to do some serious calculations, it can be done taking the iPod model (but after all, exponential is exponential!) and shortening it time wise and extrapolating for the current 75 country subscriber number list - many countries now have more than 2 networks, look at huge Brazil who's got Telefonica's Vivo and America Movil's Claro, the 2 biggest. Maybe I do it and post it when I have the time. Or maybe somebody else will
post #25 of 46
To those who want to upgrade from the original to iPhone 3G....it is quite possible that you can sell your original iPhone for higher than than $200 for the new phone.

There are a lot of wanna-be iPhone developers out there. Getting the used iPhone (without contract) will be the cheapest way for them to get into the iPhone game.
post #26 of 46
Looks like they'll sail right past their goal of 10M in 2008.

What are the latest on 2008 sales so far and total sales?
post #27 of 46
When I cruise down the street, malls, sitting in the movie theaters, even traveling to countries where iPhone is not available, I see a lot of iPhones, the ratio to other phones is just astonishing!

This is still a conservative measure given from the historical records Apple always beat the estimate. If people look around the phones offered by other vendors, what phone can people get for $199 that would offer similar kind of aesthetic, software support, power of computing, ease of use? It wouldn't be surprise iPhone is the next iPod for Apple, and probably even better!
post #28 of 46
China Unicom to sell 3G iPhone in August - Rumor Link

"A rumor has been going through the Chinese Web that China Unicom
(CHU), one of the major mobile service providers in China, has signed
with Apple (AAPL) and will introduce Apple's 3G iPhone to the Chinese
mainland in August this year."

That's 160 million subscribers to be (eventually) added to the list. Just to put it into context, it equals or exceeds the whole Telefonica or America Movil network. Check it out at wikipedia

And China Mobile will be eventually added too, that'll be another 370 million

Come on, who volunteers to do some number crunching?!
post #29 of 46
Quote:
Originally Posted by minderbinder View Post

What are the latest on 2008 sales so far and total sales?

I think they announced 4M units being sold. Even with the 2 months of no sales getting an additional 6M in just under 6 months which includes the holiday shopping season will be easy.
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post #30 of 46
Quote:
Originally Posted by solipsism View Post

I think so too. Especially if Apple doesn't lower the price of iPods for awhile. For instance, if they keep iPod pricessans the iPod Touch which seems inevitable for change come July 11thuntil 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?

What is being forgotten is that one doesn't need a monthly plan with an iPod. It's a one time price, other than buying songs and such.
Being that the lowest price for a 3G plan is now $70 a month, that may sinply be too much for some people who otherwise might do as you say.

If the iPhone could be bought the way the older model was, without needing to buy into a two year plan, it would be diofferent, esp. with the iTouch prices remaining where they were.

But for those intending to buy a smartphone, the story is different. It's interesting to note the comparison between Mac and PC buying, and iPhone, and other smartphone buying.

The Mac is often criticised as being more expensive than PC's in general, and that is given as one big reason why prople prefer PC's.

But now, the iPhone is either priced the same, or even lower than competing smartphones with competitive feature sets.

Of course, also now, the iPhone's plan is criticized as being too expensive.

This is interesting because for decades, IDC, and other organizations have shown that ROI for Macs in business, and the same is true at home, is much higher than the ROI from PCs, despite their lower initial cost. Yet, PCs sell in vastly greater numbers, and that goes back to the very beginning, when the PC had yet to secure its place.

So, the same thing holds true here, except perhaps in reverse order. If one buys another smartphone without a contract, that phone can now cost several times what an iPhone might cost. Even within contract, the top smartphones can cost more.

But, as we see with computers, people mostly care about that up front cost, not the long term costs. This is to the iPhones advantage.

Some evidence for my position comes from looking at credit card debt. People are (mostly) knowingly paying anywhere from 18% to 25% interest on their credit card debt, yet they continue to do so.

Why? Because they would rather have what they want, now, and pay through the nose over time.

With an esoteric, and expensive, device such as a computer, historically that hasn't been as true, esp. as the Mac, and Apple in general, wasn't as well known, and wasn't thought of as a safe choice. But, as that has changed, even the purchase of this, no longer as esoteric an object, has moved over to Apple. Naturally, prices of computers a category has dropped much over the years. Even the $2,200 for a top model iMac is cheap compared to the $5,000 for a mid line PC in the mid '80's.

But the $199 to $299 for an iPhone is almost a spot decision for many people, and that will certainly enhance its sales for people looking for a new phone.

I think that we might see Apple dropping the iTouch completely in favor of the iPhone. I don't know whether this would be a good idea, but unless Apple is willing to drop the iTouch to $149, $249, and $249, I don't see how they can survive long term. If they keep the price high, then people will almost be forced into buying the iPhone instead, almost as a defensive strategy, and perhaps that is Apple's intention.

Lastly, Apple will, I think, be forced into doing something drastic to the Nano as well. Apple simply can''t have a $199 8GB Nano out there. And if they do drop the 8GB iTouch to $149, or so, wither the Nano?
post #31 of 46
Quote:
Originally Posted by solipsism View Post

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.

When did you get back in, on the 13th?

You had a small window there. What did you pay?
post #32 of 46
Quote:
Originally Posted by XamaX View Post

"A rumor has been going through the Chinese Web that China Unicom
(CHU), one of the major mobile service providers in China, has signed
with Apple (AAPL) and will introduce Apple's 3G iPhone to the Chinese
mainland in August this year."

If true, AAPL will go above $250+ mark soon. The number of mobile phone subscribers in China is just unbelievable!
post #33 of 46
Quote:
Originally Posted by efithian@mac.com View Post

My wife lost her 8GB iPhone about a month ago. My iPhone is also an 8GB, both purchased on day 1. We have a family plan that runs $130/month incl tax and 700 min/month. We have 5000 rollover minutes available. I am not sure what the new charges will be if I give her my iPhone and buy an iPhone 3G for myself. The data rate for the new iPhone will be $30 with no SMS, the data for the old will be $20 with 200 SMS. I suppose the rate with be about $141 incl tax. I also assume that I can use some of the 200 SMS on my iPhone 3G, but that may not be the case. My two $100 rebates will pay for the new phone.

Why don't you give her the new one?
post #34 of 46


This is the iPod sales history. Here's the total sales graphic:


Notice the many years it took for the iPod to take off!

Well, guess what, it's NOT happening this time!

Whatever trick they pulled then, they are pulling again now only from upstart (selling to students in Uni Campuses?)

This time it's going to be way faster for the iPhone to jump start that lovely climbing curve.

And I believe it's going to be much steeper given all the factors in place this time:
  • known and conquered territory
  • broad age population adoption
  • international expansion with value allies (networks)
  • computing platform
  • most profitable product eva, cheapest on sale to date (1 in Germany)

If you account for all the lateral Mac sales coming from new iPhone adopters, it's a greenish future
post #35 of 46
Melgross, an all around brilliant post!

Quote:
Originally Posted by melgross View Post

I think that we might see Apple dropping the iTouch completely in favor of the iPhone. I don't know whether this would be a good idea, but unless Apple is willing to drop the iTouch to $149, $249, and $249, I don't see how they can survive long term. If they keep the price high, then people will almost be forced into buying the iPhone instead, almost as a defensive strategy, and perhaps that is Apple's intention.

Lastly, Apple will, I think, be forced into doing something drastic to the Nano as well. Apple simply can''t have a $199 8GB Nano out there. And if they do drop the 8GB iTouch to $149, or so, wither the Nano?

I believe Apple did not increase the capacity of the iPhone because they think it is not wise for now. If you want a device to carry all your tunes around, a heavy duty device, you buy an iPod.

The iPhone, on the other hand, is a generic device, i.e. a do-it-all device. So there are limitations imposed on it.

I think Jobs envisions a future with an Apple ecosystem where we'll have an iPod, an iPhone, an Apple TV, a MacBook (Air), an iMac, etc. and they all complement wonderfully.

They have the Flash memory pricing space to accommodate lowering the iPod prices.

But I agree the iPod line up will have to be worked on.

In time there will be only one model of phoneless iPod, if any. But that is a few years from now, maybe 2 or 3...

I believe everything will be air-connected in the future, even the fridge, and the iPhone or any other handheld computing device will control everything from a distance: cook dinner @ microwave, car lights & heating on, prepare wife for lovemaking, etc.
post #36 of 46
He's not mentioning one big factor- AT&T. I wonder why?
post #37 of 46
Quote:
Originally Posted by melgross View Post


I think that we might see Apple dropping the iTouch completely in favor of the iPhone. I don't know whether this would be a good idea, but unless Apple is willing to drop the iTouch to $149, $249, and $249, I don't see how they can survive long term. If they keep the price high, then people will almost be forced into buying the iPhone instead, almost as a defensive strategy, and perhaps that is Apple's intention.

Lastly, Apple will, I think, be forced into doing something drastic to the Nano as well. Apple simply can''t have a $199 8GB Nano out there. And if they do drop the 8GB iTouch to $149, or so, wither the Nano?

I agree that the wireless sibsidy game now complicates the iPod family's pricing structure. And yes, if the benchmark is the discounted iPhone prices out there (or even the full price version) than your predictions are something to consider. But it seems to me Apple will perhaps treat the pricing structure of iPhone as a seperate beast than rest of lineup. Too many complications (from at&t-only option to size of Nano to Touch's "mini-tablet" potential and so on) keep it from being a mass-consumer options (well, as limited as 14 million sales can be! But you know what I mean...).

I don't know, you might be right, but I hope they keep them all rolling. I will not be an iPhone customer for years (rather stick a fork in my eye than give up T-Mobile for at&t), love my Touch and can't wait for it to be the low-cost laptop alternative I've always dreamed of, use a Nano for the gym, bus, etc. when small and music-only are my needs, and even leave an "ancient" iPod w/ video in my alarm clock.

I'm more in the minority with so many of these little crack-like mp3s, but I think I do embody the potential for continued different platforms that will continue to exist.
post #38 of 46
It doesnt take much to figure dropping the price on a great phone, would cause the sales figures to go up.....duh!!!
post #39 of 46
Quote:
Originally Posted by melgross View Post

Why don't you give her the new one?


THAT was funny...
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post #40 of 46
Quote:
Originally Posted by XamaX View Post

[

Notice the many years it took for the iPod to take off!

Well, guess what, it's NOT happening this time!

Whatever trick they pulled then, they are pulling again now only from upstart (selling to students in Uni Campuses?)

This time it's going to be way faster for the iPhone to jump start that lovely climbing curve.

And I believe it's going to be much steeper given all the factors in place this time:
  • known and conquered territory
  • broad age population adoption
  • international expansion with value allies (networks)
  • computing platform
  • most profitable product eva, cheapest on sale to date (€1 in Germany)

If you account for all the lateral Mac sales coming from new iPhone adopters, it's a greenish future

Back when Apple started selling iPods, the industry was still new, and untested. Expensive memory, and few places to buy music didn't help sales much. Neither did the high prices of music.

Apple's iPod was also way ahead of all the other models, with their cryptic messages on the tiny LCDs.

The price of the iPod was also fair, within the context of what was selling. But, until Apple started the iTunes store, sales were pretty slow. Nevertheless, within that very small market, the iPod rose to about 40% of sales even before the store opened.

The chart really tracks the iTunes store, as that was what made the iPod what it is today. Once Apple opened both the iPod, and store to PC users, sales took off. Now, the market is getting near saturation, and phones are taking part i it.

The iPod has come into a fairly mature cell market where sales are vast. While the smartphone market is much smaller, it's still large. The iPhone hasn't has anything to offer people in programs as other smartphones have, which is why Jobs himself has eschewed the term "smartphone" for the iPhone. Now that it will finally become a real smartphone, that might change.

But, the iPhone has been far ahead of other phones in other areas, so it took off. If the phone market was still small, and new, it wouldn't have. It's really that simple. Nothing special about it.

With the new phones, and software, sales will jump again. But, that's within the context of a large network outside of Apple's control, which was, and is, not the case for itunes.
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AppleInsider › Forums › Mobile › iPhone › iPhone 3G seen 'repeating history' with record 14m sales in 2008