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Street: Apple has hard road to 10 million iPhones

updated 11:05 am EST, Wed January 30, 2008

Street: 10M iPhones hard

Apple may have a difficult time reaching its 2008 sales goal of 10 million iPhones, says market publication The Street. The publication notes that while Apple has sold over four million iPhones to date, to reach 10 million by the end of this year, it will have to average 2.5 million phones per quarter, which is 200,000 more than what was sold during the last, holiday-driven December quarter. The company is also facing a number of financial obstacles, internal and external.

The latter may be the most significant, as a $400 smartphone, ignoring accessories or monthly fees, may now be too expensive for some due to a failing US economy. Over a quarter of American iPhones are now also said to be unlocked, which may continue to provide some income to Apple, but deprives the company of the 10 percent in monthly fees it receives from AT&T.

To reach the 10 million mark, some analysts suggest that Apple may need to make some significant shifts in its iPhone plans. Ezra Gottheil of Technology Business Research, for example, argues that Apple may already be planning to cut $50 off the 8GB iPhone by the middle of the year. When Apple dropped the price by $200 in September, sales rose 20 to 25 percent. "There is room in the iPhone margin to cut price now," Gottheil says.

Analyst Mike Abramsky of RBC Capital contends that instead, Apple will likely introduce new models, and/or upgrade the existing phone. 3G is guaranteed at some point this year, but Apple could also decide to introduce components such as a built-in GPS receiver, according to Abramsky.

Regardless of the average sales it has to meet, Gottheil says Apple is determined. "The number is a challenge, but unless the global economy slows down profoundly, Apple will make it happen."




by MacNN Staff

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Comments

  1. climacs

    Joined: Dec 1969

    0

    agreed

    Apple will make it happen.

    They'll intro a new iPhone about mid-year and cut prices on 1st gen iPhones.

    Will they make 10 million? It will be close but I think they'll do it.

  1. factorguy

    Joined: Dec 1969

    0

    Bogus Information

    Apple will not have to avg 2.5 mil phones a quarter to reach their goals. Their goal wasn't 10 mil phones sold in 2008 - it was 10 mil phones sold by the end 2008. They have already sold 4 mil. That leaves 6 million more to reach the goal, with a year. That is 1.5 mil per quarter, not 2.5 mil.

    Additionally, Apple makes such good money on the contract, that they can afford to (if needed) drop the price $50 or $100 on the phone to increase sales. I'm sure they will probably do that anyway once the 3G version intros later this year.

    Jeesh. These people deal with numbers all day. You think they could get something as simple as this right.

  1. bleee

    Joined: Dec 1969

    0

    Carrier Free iPhones?

    They'd have more luck if they just released an unlocked version of the iPhone for counties that they don't have a carrier for FOR EXAMPLE China??? Hello one of the largest markets in the world 1.6 Billion people. Apple controls the updates for the phone through the iTunes anyways... and to be honest visual voice mail isn't that great. I'd take an SMS or email over voicemail any day saves me from having to 30 seconds of people trying to compose themselves.

  1. AsiaLV

    Joined: Dec 1969

    0

    AT&T is the real problem

    I bought an iphone and within 24 hours returned it. AT&T vs Tmobile rate plans are an $80 a month difference. If everyone of my friends transferred to AT&T then I could see this as feasible, but with my-faves - Tmobile is just a better plan for people who rely on their cell phones on a regular basis.

    I utilize near 1200 minutes a month on regular time on My-Faves, that's ridiculous to give up just to sport an iphone.

  1. testudo

    Joined: Dec 1969

    0

    Re: bogus information

    Keep in mind the only thing of importance is what the analysts think, not anything else (fact, reality, etc).

    So if analysts are thinking Apple said 10 mil in 2008, the price of the stock was adjusted accordingly, and, as such, concerns over that would re-adjust it accordingly.

    Plus, by now, they've pretty much learned not to pay attention to Apple's own expectation numbers, for they've proven to live by releasing low expectations so they can 'blow past them' when releasing actual numbers. You can do this once or twice, but then they catch on. That's why the analysts expectations, let alone the whisper numbers, are always higher.

    So when Apple says "We expect to sell 10 million by end of 2008", the analysts will then just add on the usual Apple low-ball percentage, and come back to actually expect 14 million sold.

  1. malckwan

    Joined: Dec 1969

    0

    Don't Forget...

    As Apple continues to roll out the iPhone in International markets, the growth of sales will increase. The slowing of the domestic US economy will be a factor, but hopefully will be mitigated by International markets opening up. Also with a better value proposition than buying an iPod and another brand cell phone, the iPhone might just surprise the nay sayers in the US market.

  1. MisterP

    Joined: Dec 1969

    0

    O2 have improved UK plans

    O2 - Apple's UK partner - have just yesterday announced they are substantially improving their plans, which won't do sales any harm. http://news.bbc.co.uk/1/hi/technology/7217184.stm

  1. Ridley

    Joined: Dec 1969

    0

    It's all about you asialv

    @asialv,

    Glad you're thinking strictly about yourself in saying at&t is the real problem. So, strait across the board Tmobile is $80 a month cheaper, I'm calling bulls*%# on that. Plus, how about us that have all of our friends and family on at&t, so all of our calls are free to them on at&t with our iPhones? Don't be such a singular minded a** and call a phone carrier the problem just because it might not work best for your situation.

    I had Tmobile and had to stand in one spot at my house to get any signal and it didn't work at all at my lake place. I didn't b**** and say that Tmobile was the worst thing on the planet, I just found a carrier that worked for me and to my joy and excitement they were the carrier of the iPhone.

    But thanks for the book report on how much you call your "Faves" that makes my day so much more worthwhile now.

  1. Guest

    Joined: Dec 1969

    0

    What a post

    What an inaccurate post. Whats so hard of (10-4)/4 ?

  1. bradpdx

    Joined: Dec 1969

    0

    all talk

    Geez, I hate talking on the phone, any phone. I am sticking with T-mobile for now because I have it all set up for my family, but it is minimally used, and purely for coordination of all we do. For me, phone service is necessary but no fun at all.

    I love the iPhone, but my problem with it is that it's a phone. No problem - an iPod Touch ought to do nicely. And no one will call me on it - yay!

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