Friday, November 21, 2008, 8:55PM ET - U.S. Markets Closed.

From Silcon Alley Insider, March 31, 2008:
Piper Jaffray's Apple (AAPL) bull Gene Munster defends his 45-million-iPhones-in-2009 estimate, which some investors have chastised as "outrageously aggressive." The target this year is 10 million ($3 billion of revenue). 45 million iPhones in 2009, Gene says, would contribute $11.7 billion of revenue, or 25% of Apple's total for the year.
So how does Gene think Apple will increase iPhone unit sales 4.5X, and what will this mean for the company's financial performance?
WHY APPLE WILL SELL 45 MILLION IPHONES NEXT YEAR
Gene makes three key assumptions:
The risky/questionable part of this forecast would seem to be the international assumptions, especially China. As we've noted, iPhones are already selling like hotcakes in China (as are iPhone clones called HiPhones). Apple does make some money off these sales, but it doesn't get a cut of the lucrative subscription revenue. Our man in Beijing doubts it ever will.
Gene details his international rollout assumptions, which are as follows:
2008:
Ireland (done)
Austria (done)
Canada
Mexico
Italy
Japan
Australia
The three key countries here are Mexico, Italy, and Japan. Gene assumes a specific carrier partner for each, and, together, they total nearly twice the size of the US market (AT&T).
2009:
China (5 times the size of the US market, including China Mobile only)
India (almost the size of the US market)
Spain (relatively small)
Gene assumes 8% penetration of the total iPhone market opportunity (subs on carrier partners) in 2009. This does seems a bit aggressive, given that iPhone's US penetration on AT&T (in its largest and most-hyped market) was only about 4% by the end of 2007.
WHAT THIS MEANS FOR APPLE's FINANCIAL PERFORMANCE
iPhone Revenue:
CY2007: $364 million, 1% of Apple revenue
CY2008: $3 billion, 9% of Apple projected revenue
CY2009: $11.7 billion, 25% of Apple projected revenue
Bit bold, but as an Apple share holder...lets do it The release of the Ipod was similiar in some sense to. I wont quote or state anything but I do remember seeing some reports that talked about both electronic devices releases.
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Dream Big...Do the Work...Enjoy the Ride...Cash In and Do it all over again. Sounds like Typical Apple. Gene's forcast is exactly what this Economy needs to hear!
If there is a company that could do that then it would be Apple 45mil sounds a bit high, but considering this is going to be the next platform of choice in the end it might even be conservative ... I have no doubt that the iPhone will be in about 30-35mil hands by the end of 09 but what really will make it the greatest platform is the software available .It isn't even going to be an iPhone anymore most likely but another device and way more than 45mil people will own one of some kind of flavour.. the sky is the limit
i love the iphone and i think people are catching on to what a truely amazing device it is. people might be waiting for their verizon contracts to end before making the switch.
Ain't no reason why the iPhone won't do to the cell phone market what the iPod did to music player market. Music player vendors didn't sit around either but all attempts have been futile. Zune what?
The iPhone differs from the iPod in the sense that most cell phones are sold thru cell retailers. Moreover, the iPod was a technolgical feat with no competition early on. There are a myriad of cell phone choices these days. Gene Munster is an Apple cheerleader so his objectivity must be called into question. And, if 45 million cell phones sounds like a huge number to you, know that almost 1.2 billion cell phones were sold worldwide in 2007. As the burgeoning middle class market in China continues to grow, Apple will find abundant competition from the likes of Nokia, LG, Samsung, Sony and Motorola. Additionally, Apple is being sued by some state Attorney Generals over the soldered in battery. Apple needs to let go of the battery switching revenue or it will face significant hurdles, especially in regulatory laden Europe.
the iphone is great, have one, but carrier dropped my service after moving to another state without at&t coverage. what a bummer! when will at&t expand coverage to all of usa?
I would probably buy an iphone at $200, IF the subscription fees didn't send me to the poorjouse. Iphome only prospers when people have money they don't know what to do with. As a device, it sucks - who wants to squint at a Can't-do PC for the rest of their life? My eyesight means more to me than trying to impress those simpleminded enough to think iphone has some significance.
The reason why iPhone will have no competition and crush all rivals is "iTunes". Legitimate music and movies will outlast bootleg media that are low quality. If the iPhone goes below $100 with old versions that weren't sold before the upgrades then Apple will dominate the market and accomplish its goal of 45 million iPhones sold. This is how Apple did it with the iPod.
this apple thig....is rotten to the core! with the consumer getting so tight their breath is gonna smell like sh!! and they squeak when they walk.......jobs will have to pay people in India to cook iphones with Kotu Aloo Pakora in order for them ther things to sell.
iPhone will create new businesses. Its open source OS will allow programmers to create thousands of applications. It is new so it will take time for people to understand. iPone will dominate but iPod will go out of style. Steve Jobs is the best CEO in the world.
Bored with all the Apple cheerleading! Apple(Steve Jobs) was smart enough to see and capitalize on the digital music revolution when others didn't quite get it but, still had the technology. The "innovator" again, Steve Jobs, has come up short with the iFlop and no amount of hype has been able to generate the kind of #'s that were originally expected. Munster and Blodget are in way over their heads to admit it and investors are likely to pay the price. I's say sell and NO, I'm not short the stock!
I love all the Apple-haters who bash Gene but likely haven't done 1/1000th the amount of research that he has in order to reach his projections. It's so easy to sit behind a keyboard and call someone an idiot when you don't have the first clue what you are talking about. I guess ignorance really is bliss.
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yu_h@att.net - Monday March 31, 2008 12:42PM EDT
He thinks others just sit there and watch Apple cashing in the money.