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Success of iPhone 3G triggering industry ripples

updated 03:55 pm EDT, Thu August 7, 2008

iPhone 3G & cell industry

Sales of the iPhone 3G are already beginning to have an effect on the mobile phone industry, show results from analysts. Trip Chowdhry of Global Equities Research estimates that some 700,000 iPhones were sold to the public in July alone, a number which compares very favorably next to the 1.1 million phones sold during the entirety of Q3 2007. A UBS survey has also discovered that as many as 37 percent of launch-day 3G buyers previously owned a 2.5G phone, representing an extremely quick turnaround in terms of cellphone upgrades. J.D. Power & Associates notes that the average phone upgrade cycle in the US is once every 17.7 months.

BusinessWeek comments, though, that this has generated a flood of second-hand iPhones, which may be taking the place of new devices from Apple as well as other manufacturers. Statistics on substitution are not yet available.

Avian Securities observes that the iPhone may in fact be helping Apple's rivals, to a limited extent. While Samsung's "share of responses" -- number of stores reporting a phone as a bestseller -- has dropped, Avian writes that in terms of individual phones, the Samsung Instinct is currently trumping the iPhone. LG, meanwhile, has grown its amount of responses, thanks to products like the Voyager. Strategy Analytics is predicting that Apple's portion of the touchscreen phone market could shrink from 40 to 35 percent this year.

Finally, Charles Wolf of Needham & Co suggests that Apple may suffer from iPod cannibalization, because the new, lower price of the iPhone may make it the focus of demand by teenagers during the Christmas season. As much as 30 percent of iPod sales could be diverted towards the iPhone, says Wolf.




by MacNN Staff

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Comments

  1. jhawk95

    Joined: Dec 1969

    +3

    Samsung InStink!

    I would love to see the hard numbers on the Instink phone.

    Sprint lost 901,000 customers last quarter. So who is buying all these InStink phones?

    Plus, I only know 2 people who have the Instink and they hate it. They bought it because the ads said it was "better" than the iPhone and they did not want to switch to AT&T.

    They are both contemplating taking it back and getting Sprint to cancel their extended contract and honor their old contract due to misrepresentation on the behalf of Sprint.

  1. DeezNutts

    Joined: Dec 1969

    -9

    Re: Samsung InStink!

    //I would love to see the hard numbers on the Instink phone.

    Plus, I only know 2 people who have the Instink and they hate it. They bought it because the ads said it was "better" than the iPhone and they did not want to switch to AT&T.//

    I'd love to see the hard numbers on the iPhone as I know 2 people who don't like their iPhones so naturally Apple must not be selling units to millions of other people!

  1. jhawk95

    Joined: Dec 1969

    +3

    DeezNutts

    You missed the point!

    AT&T, the carrier in the U.S. selling the iPhone, picked up 1,300,000 customers last quarter. Sprint lost 901,000 customers.

    There are still currently NO iPhones available on any given day at AT&T and Apple Stores in the U.S.

    There are lines at Apple Stores EVERY morning to get one and then you may have to come back later in the day or the next day... thus... there is high demand for the iPhone.

    Show me one news report, just one... PLEASE... of someone not being able to walk into a Sprint Store and buy an InStink.

    There is no demand for that cheap piece of $hit. The only features it had over the iPhone have all been matched by the iPhone 3G with the exception to cut and paste and turn by turn navigation... and those will be here in Release 2.1 in September.

    When will Samsung and Sprint update the InStink to add ALL the cool features of the iPhone? Oh wait, that's right, Sprint and Samsung do NOT send out updates to their phones. Nor do they have a delivery system for doing do.

  1. mjtomlin

    Joined: Dec 1969

    +2

    The point...

    ...is that the iPhone has intrigued enough people to shift the smartphone market as a whole, not necessarily to the iPhone, but to "touch" based phones in general.

    The problem with comparing sales of these products is that there's a major variable at play, the wireless carriers. People who don't like AT&T aren't even in the market for an iPhone, so it's not like they are choosing another phone over the iPhone. A real comparison would be to compare other touch phones on the AT&T network.

  1. vasic

    Joined: Dec 1969

    +1

    Old iPhones???

    The author implies that the second-hand iPhones are stealing potential customers from the 3G model. This makes absolutely no sense whatsoever! Original, second-hand iPhones are going for $450 on eBay. Is it possible that this guy sincerely believes that someone will rather buy a $450 inferior second-hand phone, rather than a $200 new one, just because of the $5 more expensive monthly plan? This is absolute nonsense.

    Second-hand iPhones are being handed down or sold to parts of the US (or world) where AT&T has little or no 3G coverage (which are still very substantial).

    I am convinced that no 3G iPhone sale was lost to a second-hand original iPhone.

    LG, Samsung and others can just hope for ignorant folk who will believe sales spiel at Sprint/Verizon.

  1. calverson

    Joined: Dec 1969

    +1

    Yes but...

    Right, well I am sure that Apple would rather have people buying iPhones than iPods -AT&T definitely would - but that would make more people buy iPhones.

    Apple sold 11 million iPods last year.

    30% of that would mean they sold 3.3 million iPhones, which would give them the smartphone industry on a silver platter.

  1. Terrin

    Joined: Dec 1969

    +1

    Note quite

    Not quite. Apple sold over 11 million iPods last Quarter alone. Last quarter is the slow one.

    You write, "Apple sold 11 million iPods last year.

    30% of that would mean they sold 3.3 million iPhones, which would give them the smartphone industry on a silver platter."

  1. testudo

    Joined: Dec 1969

    -5

    Re: old iphones

    Is it possible that this guy sincerely believes that someone will rather buy a $450 inferior second-hand phone, rather than a $200 new one, just because of the $5 more expensive monthly plan? This is absolute nonsense.

    First, how exactly is it 'inferior'? 3G doesn't mean much to a lot of people who can't get it. And the only other thing missing is a GPS, which many may also not care about.

    And the equivalent ATT plan to the earlier one is $15 more, not $5. And who says you have to save even your $5. Go without the data plan and save yourself $20-$30.

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