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'Apple Will Sell 45M iPhones in 2009 -- for $12B of Rev'
Posted Mar 31, 2008 12:20pm EDT by Henry Blodget in Products and Trends
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:
- Introduction of 3G iPhone in next 3-6 months (consensus)
- Family of iPhones (including some $200-$300 ones) by January 2009 (logical)
- International rollout doubling market opportunity in each of next two years. Important: Gene expects a Japan deal this year and a China deal by mid-2009. Our man in Beijing still laughs at the latter idea.
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
- Average Selling Prices (ASPs) drop from $489 in 2007 to $365 in 2008 and $314 in 2009 (reasonable)
- Apple gets less subscription revenue per iPhone unit (in part due to decision to drop carrier exclusivity in certain regions (reasonable)
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
30 Comments
NH Lighthouse - Monday March 31, 2008 08:09PM EDT
So do I buy now ....or keep on watching? Mike
VikenE - Monday March 31, 2008 08:13PM EDT
What people fail to realize is that people will care more about their content than they do email/calendar. iPhone already does that sufficiently and with the introduction of 3G it's only natural to assume that people want to carry around the equivalent of a computer in their pocket.
Varun - Tuesday April 01, 2008 12:45AM EDT
I too did not think that Apple would be able to do so well initially, because of competition, but looking at the crap RIM just released to "compete" makes me think that the competition will be 1 step behind just like they were with the ipod. The only reason now that the iphone would not be able to be the runaway success some are predicting is Google's Android.
Anwarul - Tuesday April 01, 2008 06:43AM EDT
This figure may be a little high as I'm sure a lot of people would want an iPhone but can't because of the price, not available in their country or tied with another network
Markus - Tuesday April 01, 2008 07:36AM EDT
You dont need to do much research that technology will be the next big thing for centuries to come...while most companies try to build upon historical data to "innovate" AAPL seems to be the only big player that innovates by creating the future. I dont understand that you even compare Nokia et al with AAPL. What have they innovated after the mobile phone? Nothing! And they never will, they dont even want. AAPL willl build mobile phones for Ipod users, and most Ipod users will buy the Iphone.Basta thats it. And if there is some price structure, political issue or competitor in the way, they will innovate around it. Pls look up their share price since the 80s if you dont belive it.
Alex - Tuesday April 01, 2008 07:39AM EDT
Yesterday some potty mouth displayed his intelligence with his post. Is there a "monitor" around at Yahoo Finance? As for Apple-RIGHT ON!!!!
madmilker - Tuesday April 01, 2008 10:19AM EDT
people in he!! will drink ice water in the year 2009. pigs will fly in Iowa 8 hours after the 2010 State Fair.
chuckles - Tuesday April 01, 2008 12:24PM EDT
I have been investing in Apple for 10 years now. I follow Gene and anyone that does knows that he is far and away the best Apple analyst. He knows Apple almost as well as Steve Jobs! Do some research if you don't believe me.
Drew - Tuesday April 01, 2008 05:01PM EDT
The iPhone is a Mac. The phone part of the device that can tie into the overall usability of this ultra mobile Mac. And dont forget the iPod Touch. 45 mil iPhones? Maybe not? 45+ mil Apple Touch platform devices? Very possible
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madmilker - Monday March 31, 2008 06:13PM EDT
jwarren_2001 .........duh! http://guides.macrumors.com/Gene_Munster_(Analyst) did you hear....this search engine is coming out with a new "shoe" phone...............all you do is pull out the tongue.......and talk! Jerry knows what I'm typing about!