Analysts Rain On Apple's iPhone Parade - InformationWeek

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5/28/2008
02:40 PM
Eric Ogren
Eric Ogren
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Analysts Rain On Apple's iPhone Parade

With iPhone sales petering out due to their growing unavailability, Apple may not sell 10 million iPhones in 2008, say analysts. What spurred Jobs to believe that Apple could attain that number, when to-date the iPhone has sold only 5.4 million? Discuss.

With iPhone sales petering out due to their growing unavailability, Apple may not sell 10 million iPhones in 2008, say analysts. What spurred Jobs to believe that Apple could attain that number, when to-date the iPhone has sold only 5.4 million? Discuss.Ars Technica has a nice write-up of the current state of iPhone sales and the probability that Apple will reach the 10 million unit mark sometime in the next seven months.

Here's the deal. Apple sold 3.7 million iPhones in 2007. That was far and above the initial target of 1 million devices by the end of the year. Back at Macworld 2007, Jobs said that the iPhone would sell 10 million units during the 2008 calendar year. Keep in mind, this figure doesn't include the 3.7 million phones it sold last year. So far, Apple has sold just 1.7 million iPhones in 2008 (through March). That leaves Apple with 8.3 million to go to reach Jobs' bold prediction. Some think Apple will do it, others don't.

Ars cites a New York Times prediction:

"They're going to have a difficult time" hitting that number, said Edward Snyder, an analyst at Charter Equity Research. He said that Nokia, the world's largest maker of cell phones, sells more phones every week than Apple has sold since the iPhone's introduction.

Nokia may indeed sell a lot more phones, but keep in mind that it is the No. 1 global player. It had better be outselling Apple by a mile.

Here's my take. I am sure you recall that the iPhone was initially sold only in the United States. Last November, it went on sale in the U.K., France, and Germany. Sales overseas in those countries haven't been stellar, though the network operators claim that sales are "within expectations." Even with this limited distribution, Apple has moved 5.4 million iPhones. But that is set to change.

If you've been paying attention to the news at all, you'll see that Apple is striking distribution deals with just about every major network operator on the planet to sell the 3G version of the iPhone.

If the 3G iPhone lives up to what the rumors purport it to be, it could very well be the hottest ticket of the year. Why? Because literally billions of people will have access to it, rather than the several hundred million in the United States and Western Europe. With a big feature set (3G, GPS, third-party apps, etc.) and global distribution, I think Apple has a chance of pushing those remaining 8.3 million iPhones out the door and into the hands of a mobile-hungry public.

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