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David Bailey, an analyst at Goldman Sachs has found some truth to the rumors that iPhone production has been reduced due in part to over eager predictions on the amount of units needed to meet demand. This news caused Apple’s shares to fall nearly 7 per cent on the Nasdaq market. Apple responded that it still expects to sell more than 700,000 iPhones in its current quarter and ten million by next year. In looking at the math of that goal, some would find it interesting that sales would actually need to double per quarter from its current rate for that to take place. In the 6 financial quarters until the end of 2008 if Apple sold 1 million iPhones each and every quarter it would still come up 4 million units short of that goal. This of course would seem to indicate that Apple is taking the model of the iPod as its barometer for these sales predictions however as this is a different device without the affordable options that led to the success of its MP3 player this is decidedly optimistic. No one was forced to sign a 2 year contract with an iPod and generally speaking the people buying them didn’t already have one as do existing cell phone users. This might indicate that Apple has a cheaper version in the pipeline that will reinvigorate the buzz that seems to be fading slightly of late. Indications of past cell phone sales seem to show that interest and units sold actually diminish over time. Sales figures for the Motorola RAZR V3 have gone over the 50 million mark* which is a truly amazing total, however we don’t see the type of promotions (free with activation) that helped the sales of that device with the iPhone, it is simply too expensive to provide that type of discount. Also noted in the report was that this does follow some of Apple’s production history patters and that it might not be the best indication of sales problems or inventory surplus. But one has to look at the fact that this device can be had in virtually any Apple store or AT&T Wireless dealer location which would seem to indicate that its popularity is waning, anyone trying to buy a Nintendo Wii recently knows that when the shelves are empty its indicates the popularity of the device. Apple’s iPhone still has the cool factor and sales will indicate this, the only thing that stands in the way for long term success is the staying power of the device and with Apple’s marketing and design prowess it would be foolish to doubt them. All they need to do is to get people to actually touch and play with the device, after that a sale is usually a slam dunk. How to make this happen is the biggest obstacle for any mobile phone provider. With the iPhone launching in Europe by the end of the year it just might be perfect timing for year end sales figures that Apple is famous for, who wouldn’t want one of those shiny black babies under the tree? [Source] * Motorola also holds the mark for the most popular cell phone of all time, the Motorola StarTac line in the 90s sold an estimated 75 million units. I added about three to that total myself. Comments1 Comment so far |
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[…] a direct contradiction to our previous story on the iPhone productions dropping, DigiTimes advises “Sources at Taiwan-based component makers have said iPhone shipments […]