Initial iPhone sales

Apple's iPhone, which is due to launch in June, could fall short of heightened expectations in the near-term due to its small potential market, according to Forbes.com. The market for the iPhone is, at first glance, quite appealing with worldwide handset sales expected to top more than 1 billion in 2007, but Apple's goal of selling 10 million iPhones by the end of 2008 could prove to be wishful thinking. A closer look at the handset market shows the iPhone's price as too high for many customers, placing it right alongside other smartphones like the BlackBerry that account for just 10 percent of handset sales. Additionally, Apple's choice to offer the iPhone exclusively through Cingular further narrows its potential customer base, enabling only those users whose contracts are near expiration and die-hard fans willing to cancel current contracts for a penalty as likely customers. Nevertheless, Apple could create its own market as it did with the iPod in 2001, or generate enough buzz around the iPhone's features to create a "must have" mentality in the minds of customers who wouldn't have normally spent $499 or even $599 for a smartphone.

by MacNN Staff