Apple’s iPhone could be even bigger than expected

61 Comments

“With the launch of the hugely hyped iPhone in a few weeks, momentum investors are driving Apple (AAPL) shares to unexplored territory. The stock has doubled in the past year, to 122. Apple’s market cap recently topped $100 billion for the first time,” Peter Burrows reports for BusinessWeek.

“Hard as it is to believe, all the excitement surrounding Jobs and his new toy may actually understate the impact of this device on Apple’s fortunes. Beyond the hysteria surrounding its June 29 launch, the iPhone has the potential for adding a totally new, $10 billion-a-year business within just a few years. If Apple can expand so-called smartphones from a luxury carried by corporate road warriors into an everyday tool for the masses—combining the functions of a BlackBerry and an iPod—Apple could soon see a new growth tear,” Burrows reports.

“If Apple’s goal of selling 10 million iPhones by the end of 2008 seemed ambitious to some back in January when Jobs first unwrapped his new baby, few doubt it now. Wall Street speculation has gone from how much market share it can steal, to how much it can expand the overall smartphone market,” Burrows reports.

“Piper Jaffray Cos. (PJC) analyst Gene Munster thinks Apple could sell more than 40 million iPhones in 2009—enough to lift revenues more than 30% that year, and earnings by 40%,” Burrows reports. “Still, Apple will need to execute flawlessly. In units built and shipped, the iPhone launch will dwarf anything Apple has attempted. It plans to have 3 million iPhones ready for sale on June 29, two sources say.”

Full article here.

[Thanks to MacDailyNews Readers “LinuxGuy and Mac Prodigal Son” and “Drunk Cheney” for the heads up.]

61 Comments

  1. The Hitch Hiker’s Guide to the Galaxy notes that Disaster Area, a plutonium rock band from the Gagrakacka Mind Zones, are generally held to be not only the loudest rock band in the Galaxy, but in fact the loudest noise of any kind at all. Regular concert-goers judge that the best sound balance is usually to be heard from within large concrete bunkers some thirty-seven miles from the stage, whilst the musicians themselves play their instruments by remote control from within a heavily insulated spaceship which stays in orbit around the planet – or more frequently around a completely different planet.

    Reply

  4. … fine weather for the concert here this afternoon. I’m standing here in front of the stage,’ the reporter lied, ‘in the middle of the Rudlit Desert, and with the aid of hyperbinoptic glasses I can just about make out the huge audience cowering there on the horizon all around me. Behind me the speaker stacks rise like a sheer cliff face, and high above me the sun is shining away and doesn’t know what’s going to hit it.

    Reply

  9. If Apple has their way — and it looks they have been calling the shots all along — removing the 2-year agreement “barrier” will atrract thousands more subscriptions than anyone imagined. One of the biggest issues I had was that 2-year agreement. Without that, the iPhone is much more enticing.

    Reply

  13. Ok, I’m as much of a Mac freak most of the people that read this site regularly (several times a day), but I just don’t think there is going to be that much of a histeria around the launch of the iPhone. I know lots of people who are looking forward to the launch, but none of them are planning on buying one the first day. Several are still living out old contracts that don’t end for another year. Others don’t have the budget for it right now.

    I think there will be a rush for the first day or so, but like when a new version of OS X is released most people will not upgrade for a few months or until they plan to buy a new machine.

    Don’t get me wrong. I think the iPhone is going to be a huge hit, but like the first iPod, it will be over the long term. I got a first gen iPod for Christmas that year, but I was the only one I knew that had one for at least a year. And I didn’t see them everywhere until after the mini’s and the shuffle’s came out. I think it will take a lot of people seeing the early adoptors actually using it before it really takes off. Say after Christmas or by this time next year when they come out with a new version.

    Reply

  15. I think some people are OVERestimating how many iPhones will be sold. Most people need a regular phones, not a smartphone. Cost is a huge factor (phone + wireless plan). i, for one, don’t need nor want the current iPhone.

    Also, i think it’d be cool if Inkwell was part of the iPhone. If nothing more than for ‘cool’ factor and not as a main selling point. A ‘secret’ feature =) i used a newton 2100 years ago and it blew me away then. I think it’s still very impressive now.

    Reply

  17. The iPhone doesn’t fit a lot of needs a lot of people have.

    For instance:

    I already have a light weight slim phone, the iPhone is bulky like a large iPod which makes it hard to carry unless your a woman with a pocket book/purse.

    I already have a very decent 8 mega pixel camera with zoom, 2 megapixel just absolutly sucks.

    I already have a large capacity iPod that holds my ENTIRE music collection and another iPod that holds MY ENTIRE TV/MOVIE collection.

    I already have “directions” via my cell phone’s mobile service, no need graphics, a simple text version via MapQuest Mobile is plenty.

    I already have a GPS, with voice, road block avoidance, alternate routes and a very sexy womens voice giving me step by step turning instructions.

    I already have a MBP with remote control, so I can watch downloaded iTMS and especially content “from other places”, DVD’s and whatnot on a larger screen than that tiny 3.5″ iPhone screen.

    What is especially important is I can mix and match any of my devices according to what need I have and retain full capabilities of each. I can loan my iPod with video, or my GPS or anything else with ease because the content and features are seperated and not bundled together in one device with limited capailities.

    I think people are going to find out they are not going to use the iPhone as much as they expect beyond the phone use.

    My advice is to wait for rev 2, find out from others their “REAL WORLD” experience and then decide if it’s for you.

    Reply

  18. “i used a newton 2100 years ago and it blew me away then.”

    I bet. I thought that Apple was only going to 31 years old. ” width=”19″ height=”19″ alt=”tongue laugh” style=”border:0;” />

    Reply

  21. @Chrissyone

    Oh freddled gruntbuggly,
    Thy micturations are to me
    As plurdled gabbleblotchits
    On a lurgid bee.
    Groop, I implore thee, my foonting turlingdromes
    And hooptiously drangle me
    With crinkly bindlewurdles,
    Or I will rend thee in the gobberwarts with my blurglecruncheon,
    See if I don’t!

    Ouch that hurts … stop it … please!!!

    Reply

  25. I have always bought Nokia phones and after the dreadful experience I have had in the last few years, especially with my current N93 (on my third one since October!!), I will never buy Nokia again.

    I can’t wait till the iPhone actually ships. Apple has two guaranteed sales for myself and my significant other.

    Reply

  26. ‘Wall Street speculation has gone from how much market share it can steal, to how much it can expand the overall smartphone market,” Burrows reports.”

    This is the part the naysayers never seem to get. They assume that the smartphone segment of the market is static or nearly so. They are wrong. There are 2 ways to grow market share, in an established market. One is to steal market share from your competitors. ( PS3 vs Xbox360). The other way is to expand or disrupt the market itself, making your product desireable to those who never considered it before. (Wii)

    Reply

  27. It’s time once again to play SPOT THE ASTROTURFERS!!!

    So many fake users every time an iPhone story hits!!! Who could forget the lovable “So Sorry Charlie”, who has been with us in so many guises before (first as “Worth Waiting for 2nd Gen”)

    Folks, your attention please – If someone says anything like “I read this site all the time, and don’t get me wrong, but…”, then they are working for Microsoft and/or Motorola are professional FUD writers. Their tactics are easy to spot if you pay attention. Their messages have the same tone and style because they are not very bright. They try to take your side, and then freak you out a bit with their homespun wisdom and dire fears.

    See how many you can spot today!!!

    -c

    Reply

  28. And no-one mentions that the iPhone will also impact hugely on sales of Macs…

    Sales of Macs alone could double. Looking forward to the day when Apple overtakes Microsoft in gross revenue. |’ll put money on it happening in fin year 2009.

    Go Apple.

    Reply

  36. @ChrissyOne

    Actually I thought “So Sorry Charlie” was joking. His first point was to complain about how bulky the iPhone was and how it would not fit in any pockets. And then he spends the rest of his comments listing all the devices he carries that make the iPhone functionality unecessary. They include a laptop, TWO iPods, a GPS receiver, oh, and a slim phone. haha.

    Either he’s a comedian or a moron… and I like to give people the benefit of the doubt. ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

    Reply

  37. Once again, Jobs has finessed the anylists.
    If he had said: “We are going to sell 50 million phones!” Everyone would have concentrated on the number 50 million and not on the device itself.
    By focusing attention on “dis-ing” the device, he got more talk about the device than the numbers. The best possible outcome!!!!

    Yay Steve. Make me rich, please!

    Reply

  38. Hey ChrissyOne,

    Pick on a real FUDer why don’t you!

    First off, B’ham is short for BIRMINGHAM, ALABAMA.

    Second, re-read what I wrote. I didn’t repeat any of the standard iPhone FUD. I only said the launch may not be as big as some people think, but the iPhone would be a HUGE HIT!

    All I was trying to do was hold down expectations a little, and I get accoused of having a Z@#% Hole.

    Z(&$ you, ChrissyOne! Go attack someone who actually used a PC to write their post.

    Reply

  41. Hey ChrissyOne

    Those losers have no idea just how transparent they are, we can spot them a mile away, especially when “So Sorry Charlie” says the same thing in the same format EVERY time. Truly pathetic isn’t it? I just shake my head and pass over it, what a waste of space.

    Reply

  44. Bellingham Washington?

    I lived there for a couple of years many moons ago!
    Worked at Uniflite and Mt. Baker Plywood. Lived on Jay Street, Grant Street and Euclid Drive (near lake Whatcom). Climbed a lot in the North Cascades.

    Great town. How is it these days?

    BTW: I vote that So Solly Cholly is a moron.

    The whole frigging point of the iPhone is that it combines a slew of devices into one unit. Not only will they actually work together, but it’s actually possible to USE them.

    90% of my phone’s features are a complete waste, since they’re either impossible to find, impossible to use or BOTH! Granted, the camera sux, but who uses their phone camera for anything serious. I use mine when I see interesting things that I want to remember… furniture, light and plumbing fixtures, etc.

    Wow, there really is an imagination deficit around here!

    Reply

  47. @ Mr. Reeee

    Don’t get to the north end much, I live in the Undying West, which is now forgotten. I used to pass through on my way to the wastes of the Angband, but since the witch king started his war the path has been difficult. I’m afraid they won’t let me back in (especially considering how much I drink when in the company of Canadians).

    Reply

  52. Whow, too many comments here. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    Check out the iPhone killer at c/net. They call it a iPhone killer then in the very next breath say this:

    “The HTC Touch features a technology called TouchFlo that allows you to operate the smart phone just by swiping your finger on the device’s 2.8-inch, 65,536-color touch screen. For example, swiping your thumb in an upward motion launches a page where you can access contacts, media, or applications, but we didn’t have much luck getting it to work.”

    YEP, its great. Has great features “but we didn’t have much luck getting it to work.” PS, it runs on Windows mobile. Didn’t you just have to guess.

    “Your great hardware features, our crappy non-functional software!!”

    MDN word, off, as in we are off to see the wizard, the wonderful wizard of One Infinite loop. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    Reply

  53. @ So Sorry Charlie

    > I already have… etc.

    You may already have all of those devices, mostly separate devices (as you explained). Lots of people do. But the iPhone is ONE device. I think you have successfully demonstrated why people will want an iPhone.

    > My advice is to wait for rev 2…

    Always good advice, not just for the iPhone.

    Reply

  54. > FINALLY someone in the press got the quantity correct – 10Mil BY 2008, not 10Mil IN 2008.

    Actually, the article got it WRONG. It is 10 million units IN 2008. Go listen to the last three minutes of the MacWorld 2008 keynote again.

    http://www.apple.com/quicktime/qtv/mwsf07/
    (also available as a pocast in iTunes)

    Not that it matters. Apple will easily do 10 million units “by the end of” OR “in” 2008.

    Reply

  55. @ ChrissyOne

    No hard fealings. We need good Mac people shinning a light on the FUD around here. But please watch your language, Z@#^ is a four letter word and children read this board.

    @ Mr. Reeee

    I have all my teeth (and a brand spanking new Apple Store just over the hill). Sorry to see you still have your prejudices.

    Reply

  57. macaholic

    This is the part the naysayers never seem to get. They assume that the smartphone segment of the market is static or nearly so. They are wrong.

    The problem is so many of the naysayers seem to be tech nerds who already dislike Apple because it made the home computer a reality. Why else would most of the naysayers rely on a ridiculous laundry list of BS all centered around business and nerd requirements? The Blackberry is a successful product from a smart company, but when compared against the hundreds of millions of phones sold annually, it’s not very significant. Apple has made a device that takes the microcomputer to the masses and skips right over the whiny dorks fretting about specs and the 5 people on Slashdot who claim they edit Excel spreadsheets on their WinCE phones.

    Long story short: the naysayers don’t get it, and worse (for them), they just don’t matter. The public will decide, and it won’t have a damn thing to do with “push” email.

    Reply

  58. Re: Naysayers

    I think you’re right – I think tech nerds will never forgive the fact that Apple made it possible from someone without a computer science degree to be able to use a computer effectively. This provincial attitude is very similar to what I see in the photography world.
    For ages, to be a good photographer, you first had to know how to use The Box. And for so many photographers, you know, the type who sit in church-basement camera-clubs and talk all night about lenses, the ability to work the box equated to being a good photographer. Never mind people skills that a portrait photographer lives by, or the skill, timing, and guts it takes to be a good news photographer, or the patience needed to shoot nature. If you were an expert at the science of the box that meant you got paid.
    But now any idiot can shoot a properly exposed image, so the mystery of the box becomes irrelevant to a certain degree, and a lot of photographers did NOT like this. Many of them still use film for the same reason. But making great images is never about the technology, that’s incidental. It’s about the image, however you can get it. Being a geek and knowing the science is all well and good, but it does not make you an artist.
    I think the MCSE types really hate that Apple has rendered them so redundant. At one time you have to hire a guy to set up a small business server and web hosting for you. Now you can do it with a few checkboxes in OS X. Is this what they loathe? I think so. I bet it will really irk them when 10 year old kids are all emailing from their phones with more elegance and ease than they could ever provide. Personally, I can’t wait to see what happens.

    -c

    MW: ‘country’ (feedback)

    Reply

  59. Interestingly enough the hitchickers guide requires the availability of a device that uses the well established OUI (Object User Interface) and an Outstream, none of which are available on any locally made device on this planet at this time. Fortunately though towels are, so relax.

    Reply

  60. > Actually, the article got it WRONG. It is 10 million units IN 2008. Go listen to the last three minutes of the MacWorld 2008 keynote again.

    Whoops, I forgot “the end of”, as in “by the end of 2008”. MDN frequently quotes this too when reporters get it wrong.

    Reply

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