Apple could potentially sell 30 million iPhones in 2007

19 years ago

“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.]

Microsoft CEO Ballmer laughs at Apple iPhone – January 17, 2007
Street Insight: Apple iPhone faces a number of potential obstacles – January 16, 2007
IDG News Service: ‘Reality might tarnish iPhone’s shine’ – January 16, 2007
The Times: Apple’s brand of corporate hubris is almost always damaging in the long run – January 16, 2007
Hackers ‘salivating’ over Apple’s iPhone – January 15, 2007
Bloomberg writer: Apple iPhone won’t make long-term mark; will only appeal to a few gadget freaks – January 15, 2007
Dvorak on Apple iPhone: ‘I think Apple can do wrong and I think this is it’ – January 13, 2007
USA Today writer: Apple iPhone is an ‘ordinary, average product’ at heart – January 12, 2007
FUD Alert: Analyst – I am pretty skeptical Apple’s iPhone can succeed – January 11, 2007
The massive FUD campaign against Apple’s iPhone ramps up – January 10, 2007
The Register’s Ray: Apple ‘iPhone’ will fail – December 26, 2006
Analyst: Apple iPhone economics aren’t that compelling – December 08, 2006
CNET editor Kanellos: ‘Apple iPhone will largely fail’ – December 07, 2006
Palm CEO laughs off Apple ‘iPhone’ threat – November 20, 2006