iPhone: Are 10 million units in 2008 too optimistic?

iPhone: Are 10 million units in 2008 too optimistic?

Summary: The iPhone frenzy has begun, but let's cut to brass tacks: Can the iPhone really ship 10 million units in 2008?That 10 million figure is what Apple is tossing out there as expectations for iPhone sales (see conference call transcript confirming the figure).

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TOPICS: Apple, iPhone, Mobility
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The iPhone frenzy has begun, but let's cut to brass tacks: Can the iPhone really ship 10 million units in 2008?

iphone7.jpgThat 10 million figure is what Apple is tossing out there as expectations for iPhone sales (see conference call transcript confirming the figure). Adrian Kingsley-Hughes notes that the 10 million benchmark is a big hurdle. These expectations present an interesting conundrum since Wall Street expects more than 10 million iPhone units to ship. To Wall Streeters 10 million units would be a failure.

Meanwhile, the expectations for the iPhone are reaching frenzy proportions leading up to the June 29 launch (see Techmeme).

Adrian writes:

It’s usually bad luck to bet against Steve Jobs, but I still find it hard to see how Apple is going to shift 10 million iPhones in 2008.

I agree on both counts. For starters, Adrian is a bit nutty for doubting Jobs. Then again I'm also doubtful of the 10 million unit mark. To be sure, the 1 million unit mark for iPhone is a no-brainer--Apple's core customers will buy 1 million iPhones easily. In fact that's part of Apple's secret sauce. Apple has a core customer base that will buy the first 1 million units of whatever Jobs cooks up. That fact means Apple can move up the learning curve much faster and perfect the device.

Other companies struggle to ship 1 million units. Given Apple's customer base it gets to 1 million units just by adding water.

But for 10 million iPhone units a lot of things have to go right. Among them:

  • Apple needs to ramp up production quickly.
  • The iPhone needs a ready supply of parts.
  • Apple needs to overcome sticker shock. For Apple's core users paying $499 to $599 for an iPhone is a given. But other customers are likely to be cost conscious.
  • Apple is in bed with only AT&T. If other network providers--Verizon, T-Mobile et al.--I'd be more inclined to buy the idea 10 million units.

Perhaps everything will go right but expectations for the iPhone don't allow for anything but perfection.

Topics: Apple, iPhone, Mobility

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4 comments
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  • Is this the best you can come up with?

    Apple needs to ramp up production quickly.
    The iPhone needs a ready supply of parts.
    Apple needs to overcome sticker shock. For Apple?s core users paying $499 to
    $599 for an iPhone is a given. But other customers are likely to be cost conscious.
    Apple is in bed with only AT&T. If other network providers?Verizon, T-Mobile et
    al.?I?d be more inclined to buy the idea 10 million units.

    All these have been addressed ad nauseum - were you asleep?
    4 million units confirmed this year. that being the case, the other 6 million next
    year is no problem.
    Spare parts...OMG they will need spare parts! Better tell Apple lest they forget.
    Sticker shock? What sticker shock? ...almost everyone on the planet will Know the
    price by the end of the month.
    Other vendors? they weren't interested so what's the point.
    atlunch
    • Aaah, who cares....

      I'm more interested in what they'll say when the iPhone is a huge success which more
      or less everybody else outside the ZDNet office walls think it will be.

      Maybe they'll say they've said it all along? :-P

      The Microsofty phones will continue to be used by big corporations but the iPhone
      will be more and more powerful and way more cool.
      Mikael_z
  • Learn from history

    The RAZR originally sold for $500 with a 2 year Cingular contract (it was a Cingular exclusive phone). They sold 10 million units in the first year under these conditions.

    Given that the iPhone is a vastly superior piece of technology compared to the pretty but dreadful RAZR, and given Apple's built-in fanbase, what makes you think the iPhone will underperform the RAZR?
    tic swayback
  • How many times

    Has Apple released a new iPod only to have people say it will never
    sell?

    the iPhone is basically an iPod with some extra features like true
    movies on a "full" screen, the ability to access the internet and even a
    phone. That last feature seems to have drawn more attention than
    the other features, but it will still be targeted at the iPod market.

    As for ATT, they went for the conditions that Apple required and so
    they got the iPhone on an exclusive agreement. ATT will have made a
    significant upgrade (software wise) to their network and no carrier
    would have done that without exclusive rights for a period of time.

    10 million in sales by the end of 2008? Only ATT can screw that up -
    Apple will give them the products to make it work, but ATT is going
    to need to respond to the market with plans that will keep sales
    moving.

    the 10 million goal is also helped by international sales that will kick
    in later in the year and early next year. I have no doubts that it will
    blow past that target before the end of 2008.
    Ken_z