“I have read article after article, on this site included, about the reasons why the iPhone will fail to ship Apple’s forecast of 10 million units in 2007. Having spent a lot of time covering wireless and working under one of the Street’s top ranked wireless analysts for some time, I believe most of the negativity is baseless,” Will Gabrielski writes for SeekingAlpha.
MacDailyNews Note: Just a note, so nobody gets the bright idea to try to move the goal post on iPhone: Apple’s official goal is 10 million iPhone units (all models) in FY 2008, Apple’s first full year in the market, not “in 2007.” Since Gabrielski get most everything else correct, we’ll assume it’s just a misunderstanding or a typo, but it’s telling that Gabrielski still thinks Apple can hit their FY 2008 goal in the last half of 2007. Apple’s goal is very conservative. “Under-promise and over-deliver” always works much better than vice versa.
Gabrielski continues, “First, people gawk at the price. Uh, the iPhone is priced competitively with most other smart phones and has a $200 to $300 MP 3 players embedded. The iPod, which has 70% plus market share in Apple’s target market for the iPhone, in the US, shipped about 20 million units in the fourth quarter alone, so it wouldn’t take too much cannibalization for an iPod replacement cycle alone to drive strong unit sales. Also, Cingular will likely subsidize the cost of the phone by at least $150.”
“Second, Cingular has about 60 million subs. The average replacement rate on these subs is about 1.5 to 2 years. At the mid-point, the company will sell about 35 million phones in 2007 to existing customers. Given the large installed base of iPod users, their replacement rate, iPod cannibalization, and the potential for churn at other carriers looking to change to Cingular to grab an iPhone, it’s not too hard to get to 10 million units,” Gabrielski writes. “Third, Apple will likely announce at least one more phone this year, possibly at the lower end with a modified OS with a longer battery life that is geared more towards iPod users than pure wireless customers.”
Gabrielski goes through some more good reasons why iPhone will succeed and then writes, “I have written in the past about my expectation for potentially 30 million iPhones to ship in 2007. I stand by this despite the negativity.”
Clearly, Gabrielski gets it. More reasons why Apple’s iPhone will succeed in his full article here.
[Thanks to MacDailyNews Reader “Macaday” for the heads up.]
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@ZOOONE GONE
I doubt that will happen. ZT is a cancer that some on here find funny which of course encourages him further. However, most of us find him a blight and dense enough not to take a hint.
He is a sad pathetic troll whose only thrill in life is this forum. One day he may croak from jerking off all the time to a naked pic of Steve Ballmer bending over to pick up a bar of soap, but until then, best to ignore him.
Zune Tang thinks he is very clever and is having fun feeding his ego by trying to upset the lesser intelligent amongst us. Because his comments are so obviously incorrect it appeals to the microsoft haters who need that kind of obvious wrongness. Those type of people will always exist and lurk here so the zune tang type will always have an audience. It is similar to how toddlers are amused in a simpler way than are adults.
Speaking of the iPhone, I am amazed how some analysts insist on saying that the iPhone will not sell to businesses. To this my reply is, Apple does not care about that market anymore. Its quite obvious that Apple will only sell to consumers and have focused their energies on the mass market. Their biggest ding is that it does not work with Exchange. But they never mention that Yahoo has 250 million email accounts, sure it a hugely inflated number, but even discounting 60% of that still leaves a huge number of people. Most of the features like google maps, the iPod built in, which seems to be conveniently ignored in most analysis, were designed specifically for a consumer product. Why do the analysts insist on calling this an enterprise device, when it is clearly designed for the consumer market?
AP,
Nope, I don’t think so. Put another way, its clearly a device that enterprise would naturally want. And I’m unclear as to why many posters pigeon-whole this device as primarily a phone, its clearly not primarily a phone – its only 1/3 telephony, the other 2/3 is stand alone internet/email and PDA/media player. This is, and will be, a highly functional device even without cellular service because its also an 802.11 network device. I’m even suspicious, given indications on MDN and other places that Cingular’s non 3G data network is relatively slow, that it will be more desirable to use it as a pure 802.11 device for potentially and significantly increased network performance.
Fatty Arbuckle: “Wow, 50% of Cingular users are going to buy a phone with no replacement battery within 6 months of the launch. In other news, Titanic Survivor Found on Iceberg.”
I have never once replaced a battery in any of my cell phones. Call me a wasteful American, but I usually get a new phone before the battery wears out (as the article states, every 1.5 to 2 years or so) to keep up with the “latest and greatest” technology.
Plus, there will be services and kits out there to access and replace the iPhone’s battery, just like the iPods. Apple didn’t want to sacrifice design for access to something users rarely replace anyway. Just like in the iPod.
One question: Will Cingular taint the Apple Stores with one of those ugly orange booths?
I was impressed with the staff at my local Cingular store though, they all knew what the iPhone was and when it’s coming out. This product will shake up the market just as the iPod did when it was released. And the iPhone is only 1G, wait a couple generations. It took the iPod three generations before it became truly popular and not just a toy for Mac users. Really, it was the 1G mini that brought the iPod to the masses.
I personally find Zune T to be clever, and an obvious mac fan.
Let’s all come to the realization together that he is speaking for Microsoft for the fun of it, and to illustrate their mindset.
I don’t think the high price tag of the iPhone is unfair, but I think it is too high for a lot of people. Price drops will definitely drive sales.
“Apple went with EDGE because it is Cingular’s most widely available data network. While they are working on installing more 3G, EDGE has coverage NOW. Better slower access in more places than faster access in fewer places.”
PLEASE, stop perpetuating this lie. It is apart of the Steve Jobs RDF.
ATTENTION
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*
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EVERY CINGULAR 3G HANDSET HAS EDGE DATA FOR BACKUP
EVERY CINGULAR 3G HANDSET HAS EDGE DATA FOR BACKUP
EVERY CINGULAR 3G HANDSET HAS EDGE DATA FOR BACKUP
*
*
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ATTENTION
The notion that you can only have one or the other is an outright lie and I wouldn’t go explaining that to someone who knows a lick of sense about cell phones.
Apple could have used UMTS and incorporated, for the sake of battery life, an easy way to turn it off when in a weak signal area. The only excuse for the lack of a UMTS/HSDPA chipset is that they either didn’t have enough time or wanted the phone to be as cheap as possible.
Mostly every UMTS chipset has EDGE built right into it, the same with CDMA EV-DO and EDGE’s 2.5G CDMA counterpart 1xRTT.
“The only excuse for the lack of a UMTS/HSDPA chipset is that they either didn’t have enough time or wanted the phone to be as cheap as possible.”
Of course there are other more sinister reasons but I think highly of Apple and don’t believe that to be the case.
Bottom line: when Steve Jobs said something to the tune of “We went with EDGE because it’s the most widely available standard,” the answer is “YEAH, so did everybody else who released a Cingular 3G handset since they also have EDGE as backup to make up for Cingular’s lack of 3G coverage!”
Apple will sell more than 10million iPhones by the end of fiscal 2008, but it won’t be 30 million.
This product has enormous potential to grow, but the price will have to come down before it takes over the market. The entry price will be paid by early adopters, and I think there’s plenty of them out there to absorb this entry cost. The product is amazing.
I see this as a long term effort by Apple to make a huge dent in the mobile phone industry. I think they can do it, but it won’t happen in a single year, the iPod took a few years to really take off, I think the same thing will happen here.
They will NOT sell 30 million the first year. No way, no how. I’m an Apple fan but no friggin’ way. Unless they drop the price SUBSTANCIALLY.
Bet on it.