Apple to sell 12 million iPhones in 2008 at reduced price: analyst

Stan Beer
Friday, 19 January 2007 05:37

IT Industry - Market

A US-based technology business research firm has predicted that Apple will surpass its projected 10 million iPhones sold for 2008. However, many of the expected 12 million iPhones to be sold will cut into already slowing iPod sales and the price will be reduced from the premium level that Apple has placed on its yet to be released handset.

New Hampshire technology business analyst, Technology Business Research (TBR) in its 6 page fourth quarter report on Apple says: "TBR believes Apple’s publicly stated sales goal of selling 10 million iPhones in 2008 is attainable assuming 20% to 25% of estimated 52 million iPod units shipments in 2008 are iPhones. Furthermore, we expect Apple to surpass this sales figure and sell nearly 12 million iPhones during 2008. As evidenced by the effect of the Motorola RAZR during the past three years, the mobile phone market has the potential for a popular handset model to make a large impact on the competitive landscape."

According to TBR, the iPod market is slowing rapidly as it matures and hints that the iPhone may be a response by providing an upgrade path.

"Apple’s iPod sales for the quarter totaled a record 21 million in 4Q06 as the music player became a top-selling retail item on Amazon during the holiday season. However, obscured by the record unit shipment numbers in 4Q06 was the ongoing slowdown in iPod growth and the potential market saturation. iPod revenue and unit shipment growth for 4Q06 came in at 17.9% and 50%, respectively. While robust growth results, these figures were much lower than the 4Q05 levels of 140% revenue growth and 206.6% unit growth, and a far cry from the respective revenue and unit growth rates of 284.1% and 524.8% recorded in 4Q04," the report states.

"The slowdown in iPod revenues and shipment growth signals a maturing market where most of the demand will be driven by replacement sales. Replacement sales are driven by device wear and the upgrade cycles. To shorten the iPod upgrade cycle, the company will need to bring new devices to market more quickly and incorporate added-value functionalities such as wireless networking/synching, improved visual display and extended battery life."

TBR also points to many challenges facing Apple's the iPhone in both the consumer and corporate spaces.