Will Apple Meet Their iPhone Goal?
01.30.08 - 03:19pm
If Apple is to sell 10 million iPhones in 2008 as per their goal, they will have to sell 200,000 more per quarter than they did over the hottest time of the year, the Christmas season. During that time last year Apple sold 2.3 million.
Analyst are looking into the matter and agree that for Apple to accomplish its goal, changes have to be made. One of the changes would be a price cut. The much talked about recession here in the U.S. has most likely hurt sales as well as the lowest fourth quarter buying season since the last small recession in 2002. A new iPhone in 3G could boost sales but not if the price is too high. A lower price for the original and a good price for the 3G could go a long ways.
“The number is a challenge, but unless the global economy slows down profoundly, Apple will make it happen,” says Ezra Gottheil, an analyst with Technology Business Research.
Apple will also have to finalize deals in other countries especially China where the mass population could be a huge boost in sales. There Apple does have to contend with the unlocked iPhones already rampant throughout the country, a place where many of the 1 million missing iPhone may be, but should see a huge boost if they able to achieve a deal with one of China’s mobile carriers. Japan and Australia are also large markets for the iPhone. If they can get it to be a worldwide product Apple will have a much greater chance of meeting their goal.
“I think everything, including a price cut, is on the table but Apple is pleased with the performance of the product and maybe more inclined to add capabilities such as GPS or location-based services, and Bluetooth for the same value in the iPhone, as well as offer 3G,” says Mike Abramsky, an analyst with RBC Capital.
In spite of the worry from investors over the whole matter the iPhone has seen remarkable success, overtaking 20 percent of the market in the U.S., no small feat for a first timer. Also some of the bad media about the iPhone’s lack of success mostly has to due with the super extreme expectations put on the device. Even at that level, the iPhone has met most expectations and exceeded the expectations of customers. Yes, it’s a little higher in price, but what you get far outreaches other phones on the market, with more attributes being added almost daily.
While Apple’s stock has fallen after rising 132 percent last year, mainly on iPhone up and down news, the stock and Apple are still doing remarkably well when put in a long range view vs a couple week view and also when you extend that view to look at more than the iPhone. Apple made $1.75 billion in revenue with all products taken in. The iPhone and all the iPhone accessories only amounted to $241 million in revenue. A small bit of a much larger pond.
Today Apples stock still remains in the $130’s rising to $133.34 as I type, up from a $130 start. Analysts are still keeping Apple’s stock target buy high with most between $200 and $250. Basically, now is a great time to buy Apple stock, when for the moment it is in a slump, something we may not see again anytime soon.
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