Apple Sells One Millionth iPhone

[7on]

No. 3G is more important here - the Telcos make it that way as they paid so damn much for the licences. That plus the first company with 3G phone (called '3') cocked up the marketing, aiming at children to download videos rather than businesses who'll use the data (and have the money). Now 3G phones are far more common and the bandwidth is available quite cheaply.

For me, I really would like to see a 3G iPhone as the data will be so much better. Even if it's downloading the 'toons from iToons store (not that I've ever downloaded even one tune thus far...).

Is Steve making a rod for his own back by signing up the desperate Telcos rather than the capable ones? For example, will AT&T be able to use a 3G iPhone if/when it's released?

Wouldn't it be great if the iPhone's price was doubled but it was sold unlocked. I'd be more than happy to pay the premium and then select the Telco of my choice and not be tied in. Even pay-as-you-go would then be possible.

I'd lay bets on the fact that there's a huge number of people in the 'States who would love an iPhone but won't buy one purely because of AT&T. It'll definitely be like that in the UK for O2.

I wish it would be sold unlocked in Europe. Isn't unlocked the norm over there? (minus the UK) US is AT&T, UK O2, and Canada Rogers - but for Europe just release an unlocked phone. I doubt their deals specify outside their country. That way Apple can sell to anyone because you can just import a Europe phone and use with T-mobile USA :-D That way Apple gets more sells, makes more money, w/o violating any 5 year contracts. And manages to piss off iPhoneSIMfree

 

[aristobrat]

No, and the only reason is because that market has not been pinned down yet.

I can see where knowing the specific markets would make it easier to guess exactly how the 10 million iPhones sales will geographically break down, but "in general", I don't think Apple's going to have too many problems hitting 10 million iPhone sales (worldwide) by the end of 2008, unless it totally tanks in Europe.

Like you said, 2.5M in the US this year, maybe 4M more in the US over 2008 .. that's 6.5M total, just in the US. Apple would only have to sell 3.5M in Europe over 2007/2008 to hit 10 million sold, right?

 

[CalBoy]

Like you said, 2.5M in the US this year, maybe 4M more in the US over 2008 .. that's 6.5M total, just in the US. Apple would only have to sell 3.5M in Europe over 2007/2008 to hit 10 million sold, right?

Yes, and that's where it gets scary. Assuming the UK sales numbers correspond to US sales figures (they stay proportional to the population), we can only expect about 700,000 units from that market in 2008.

Now, even if other markets opened up, their sales figures would be downwardly depressed depending on when the iPhone is released there. For example, if the iPhone comes to Canada next February, we could expect about 400,000 units. However, if it's delayed, and doesn't debut until about May/June, sales might only go as high as 200,000. The two markets with the most potential are Japan and Germany. Their larger populations and relatively stronger consumer purchasing power (relative to the UK) are the only hopes for a 10 million unit mark. If the iPhone makes it into those markets by next February, I think we can see about 2 million units (combined) from those two markets. Adding this up, we get:

4 million US
2 million Japan+Germany
400k Canada
700k UK
Total: 7.1 million. Add that to this year's 2.5-2.7 million, and you see that we're just a little shy. A smaller market like France might push this over the edge, but again, this all depends on the date of release. If Apple can't make it by early next year, these numbers could fall as much as 5-10% per month of delay.

 

[Linito]

Just watch AAPL go!

 

[elcid]

Make one for Verizon and I'm sold.

Id be alllll over it.

 

[CrusaderKnight]

I bought an iPhone

I bought an iPhone on Sunday Sept. 9th I should be getting it on the 11th

 

[TheChillPill]

Yes, and that's where it gets scary. Assuming the UK sales numbers correspond to US sales figures (they stay proportional to the population), we can only expect about 700,000 units from that market in 2008.

What is important to remember however is that Europe is a much advanced marketplace for Mobile sales than the US - and Europeans use their phones for much more than Americans do.

Many of my American friends are only just starting to grasp the concept of sms text messages - whereas in Europe, pretty much everyone uses sms (more so than calling in a lot of cases).

The fact that iPhone makes all these things far easier will make it appealing to Europeans - as well as the 'status' that will go with having one.

The only thing that will impact the sales figures is how accessible it is to people. If it's contract-only (i.e no Prepay) it won't be anywhere near as successfull as it otherwise would be.

 

[blueskyrocket]

so how long until the 2 millionth?! !!

My guess is less than the 74 days it took to sell the 1st million. Lets revisit this thread in 65 days time.

Pete

 

[Agathon]

Remember that the cost of the iPhone is over $2000 with contract. Thus the actual discount so far is less than 10%.

The Motorola RAZR was down from $500 to $100 in less than a year.

I expect the iPhone to be less than $300 and possibly even much less than that by the end of next year.

You tell me: who isn't going to buy an iPhone if they end up as cheap as some of the other phones on the market?

 

[Glenny2lappies]

4 million US
2 million Japan+Germany
400k Canada
700k UK
Total: 7.1 million. Add that to this year's 2.5-2.7 million, and you see that we're just a little shy. A smaller market like France might push this over the edge, but again, this all depends on the date of release. If Apple can't make it by early next year, these numbers could fall as much as 5-10% per month of delay.

What is important to remember however is that Europe is a much advanced marketplace for Mobile sales than the US - and Europeans use their phones for much more than Americans do.
...
The fact that iPhone makes all these things far easier will make it appealing to Europeans - as well as the 'status' that will go with having one.

I think we're getting too excited about a single phone. "Most people" don't care that it's an Apple, they want cheap, small and simple. Thinking of the huge market for kids here as well as non-techno-savvy adults.

Just some numbers; the US has a population of around 300M. Of those, say, a third either have or can have a phone (=100M). Of this market only 20% would be interested in an iPhone type device (=20M). Of this only a third would be in a position to buy one (=6.6M). And of these people a lot won't because of restrictions in their current contracts, etc., etc., etc.

One issue with the iPhone that would stop it being successful is, perversely, its success. As more iPhones are sold they become more common and looses it's appeal to the fashion victims - those people who are in the market for buying an iPhone because of it's trendyness and rareness. Take that away and these people start looking around for the latest trendy Sony/Nokia/Samsung partnered with Channel/l'Oreal/Armani/Hillfilger phone.

It's one hell of an achievement to sell 1M iPhones. But it's quite surprising that if they sold 300k in the first week, that it's taken 9 and a half weeks more to sell 700k. Hence the price drop.

Take away the pent-up demand in non-US markets and the numbers CalBoy quoted look awfully optimistic and very high.

Maybe this could bode well for an unlocked phone.

Of course Apple will be doing the sums: unlocking the iPhone would sell many times more devices in any market world-wide than selling a locked phone, but at the cost of loosing future revenues from the locked in phone telcos. Unfortunately you can't sell an unlocked iPhone in just one market; if Apple were, they'd be send back to the 'locked' markets in an instant - just imagine if they sold unlocked phones to Tonga they'd end up selling 5 million of them in a country with circa 50k people!

Maybe this means we'll never see an unlocked iPhone. Unless the iPod touch is the stalking horse for the next generation?

 

[Glenny2lappies]

My guess is less than the 74 days it took to sell the 1st million. Lets revisit this thread in 65 days time.

My guess is that it'll take a lot longer in the 'States. Apple have made quite a rod for their own back by tying themselves to one telco. Unlike Nokia et al who can flog their phones to all the telcos.

Will Steve live to regret this decision?

 

[megfilmworks]

My guess is that it'll take a lot longer in the 'States. Apple have made quite a rod for their own back by tying themselves to one telco. Unlike Nokia et al who can flog their phones to all the telcos.

Will Steve live to regret this decision?

I disagree, if you want an iPhone you won't care who the carrier is. All carriers have issues and the iPhone needs a network that functions fully with Visual voicemail.

 

[gwangung]

Remember that the cost of the iPhone is over $2000 with contract. Thus the actual discount so far is less than 10%.

That's such an idiotic statement.

If you're going to be using data with the phone (and that's the POINT of such a device), you're paying that $2000 anyway.

Feh.

 

[aristobrat]

With the price drop, the price of the iPhone + 2 years worth of the special data plan comes out to be less expensive than the price of 2 years worth of regularly priced data.

So even if you can get another AT&T PDA phone for free, you end up paying more in the end.

$399 + ($20 x 24 months) = $879 (for the iPhone + 2 years of data)
$000 + ($40 x 24 months) = $960 (for a free PDA phone + 2 years of data)

Wonder if they'll do cheap data plans in Europe?

 

[CalBoy]

What is important to remember however is that Europe is a much advanced marketplace for Mobile sales than the US - and Europeans use their phones for much more than Americans do.

Many of my American friends are only just starting to grasp the concept of sms text messages - whereas in Europe, pretty much everyone uses sms (more so than calling in a lot of cases).

The fact that iPhone makes all these things far easier will make it appealing to Europeans - as well as the 'status' that will go with having one.

The only thing that will impact the sales figures is how accessible it is to people. If it's contract-only (i.e no Prepay) it won't be anywhere near as successfull as it otherwise would be.

Yes, Europeans use their phones a lot more than Americans do, but that's why the iPhone is less competitive there. The iPhone represents less of a "new" concept there. The European market is used to having much more capable phones, and they are also used to having more of their phones unlocked; a feat that is only partially achievable on the iPhone. Combine that with less consumer purchasing power, unknown pricing on Apple's part, and possible competitors jumping in before Apple, and you see why I came up with my estimates.

I think we're getting too excited about a single phone. "Most people" don't care that it's an Apple, they want cheap, small and simple. Thinking of the huge market for kids here as well as non-techno-savvy adults.

I don't know how you got the idea that "most" people want a "simple" phone, but I think it's partially flawed. Kids and tecno savvy adults aren't the only ones to whom the iPhone appeals. Add professionals like doctors, lawyers, MBAs, CEOs, and world leaders to your list, and then we have a better key demo to work with.

Just some numbers; the US has a population of around 300M. Of those, say, a third either have or can have a phone (=100M). Of this market only 20% would be interested in an iPhone type device (=20M). Of this only a third would be in a position to buy one (=6.6M). And of these people a lot won't because of restrictions in their current contracts, etc., etc., etc.

Your numbers are fundamentally flawed. The US has a mobile phone market of 233 million +. Seeing as this is 2.33 times greater than you thought, I'd say the built in US market for the iPhone is more likely around 15 million. Your point about old contracts becomes null after about 18 months; most people who want one will know when their contract expires, and will plan their purchase around that time.

One issue with the iPhone that would stop it being successful is, perversely, its success. As more iPhones are sold they become more common and looses it's appeal to the fashion victims - those people who are in the market for buying an iPhone because of it's trendyness and rareness. Take that away and these people start looking around for the latest trendy Sony/Nokia/Samsung partnered with Channel/l'Oreal/Armani/Hillfilger phone.

Sadly, yes. Apple products do seem to be in vogue, but that doesn't mean the technical merits of it won't be enough to keep driving sales.

Take away the pent-up demand in non-US markets and the numbers CalBoy quoted look awfully optimistic and very high.

Which is why I said, "this is where it gets scary."

Maybe this could bode well for an unlocked phone.

I hope, but I'm not counting on it. But if enought people can make the process fast and easy, Apple might be compelled do it for you after its 5 year deal with ATT runs out.

 

[islanders]

There is a 5 year contract and you buy the phone?

Sounds more like a classic Apple fumble on the one yard line.

It will be interesting to see how this plays out. I'm thinking small user base.

Seems like it should be $300 because it is a cool phone, and a 2 year deal. I say this because Direct TV is 2 year deal, and you don't pay for the equipment. Then if people like it they will keep the service.

Oh, well I guess we are used to it by now. There will be some other cool stuff out by some other company with more savvy marketing skills than Apple.

 

[aristobrat]

The 5 year contract is how long Apple is rumored to be partnered exclusively with AT&T ... nothing to do with the length of the contract a consumer gets when s/he buys an iPhone.

With DirecTV, you certainly do pay for their top-end equipment. Their normal price for their HD DVR is $299, and you never end up owning the thing. Despite paying the $299, when you cancel your service, you have to give it back. How crazy is that?

 

[zwida]

My guess is that it'll take a lot longer in the 'States. Apple have made quite a rod for their own back by tying themselves to one telco. Unlike Nokia et al who can flog their phones to all the telcos.

Will Steve live to regret this decision?

I don't think so. Sure, Apple would sell even more phones if they had an additional agreement with Verizon, but it's exceedingly unlikely that they would be getting the same revenue sharing without the exclusivity. This is a long-term cash-generating machine for Apple and I think they'll be just fine.

And if I were a betting man I would say that sales will accelerate for the next several quarters. That's just how they roll...

 

[islanders]

The 5 year contract is how long Apple is rumored to be partnered exclusively with AT&T ... nothing to do with the length of the contract a consumer gets when s/he buys an iPhone.

With DirecTV, you certainly do pay for their top-end equipment. Their normal price for their HD DVR is $299, and you never end up owning the thing. Despite paying the $299, when you cancel your service, you have to give it back. How crazy is that?

That's good news. I think a lot of people would/are considering the iPhone, but yeah, 5 year contract would be outrages.

I'm on Comcast month to month. The HD DVR is also free. they own it, i don't pay for it. The HD DVR for DTV was $199, but I agree.

But my point was all those dishes and cables are free with a 2 year contract.
They install it.

I hope the iPhone is competitive.

I just bought a car stereo from Crutchfields and if you can return it all for any reason for 30 days and they pay for the return shipping. You just print out the UPS code and take it to UPS.

I haven't even seen an iPhone. How do I know it will work for me? Can I return it without a restocking fee? Am I locked into a long contract if it really doesn't work for me?

 

[Mal]

Removed stupid and overly large quote.

Dude, shut up. We're not interested in your absurdly large and poorly worded spam post, and we've no sympathy at all. Ok, so some people might have some sympathy on those who have to wait for the iPhone to reach their country, but certainly not on you, who can't simply wait like a normal person, but instead has to whine and scream about it on an online forum.

Get a life.

jW

 

[Glenny2lappies]

Yes, Europeans use their phones a lot more than Americans do, but that's why the iPhone is less competitive there. The iPhone represents less of a "new" concept there. The European market is used to having much more capable phones, and they are also used to having more of their phones unlocked; a feat that is only partially achievable on the iPhone. Combine that with less consumer purchasing power, unknown pricing on Apple's part, and possible competitors jumping in before Apple, and you see why I came up with my estimates.

It's amazing how many SMS text messages are sent in the UK. Kids/young adults are constantly texting each other; far more often than talking. Watching people who are proficient in one thumb typing is quite intriguing. Most of the mobile phone plans will allow for a lot of text messages.

I wouldn't say that the phones are any different to the ones available in the 'States, just that texting is the norm.

I like the idea of the iPhone as it's got such a wonderful interface. I've played with one (in the UK!) and really like the virtual keyboard. Its by far the fastest way for me to enter text into a small format device.

I think the iPhone may get some people interested in it just because of this virtual keyboard.

I don't know how you got the idea that "most" people want a "simple" phone, but I think it's partially flawed. Kids and tecno savvy adults aren't the only ones to whom the iPhone appeals. Add professionals like doctors, lawyers, MBAs, CEOs, and world leaders to your list, and then we have a better key demo to work with.

By 'simple' I mean a small compact phone that can be used for sending text and will fit in the pocket. For example the Motorola razr.

Your numbers are fundamentally flawed. The US has a mobile phone market of 233 million +. Seeing as this is 2.33 times greater than you thought, I'd say the built in US market for the iPhone is more likely around 15 million. Your point about old contracts becomes null after about 18 months; most people who want one will know when their contract expires, and will plan their purchase around that time.

Struth! That's incredible. I would never have guessed that there were so many mobile phones. Little wonder Apple want a share of that market.

[sales of unlocked iPhones]I hope, but I'm not counting on it. But if enought people can make the process fast and easy, Apple might be compelled do it for you after its 5 year deal with ATT runs out.

My main point is that Apple would sell many times more iPhones if they were available on any carrier. OK, there's the added value of visual voice mail, but that will be an added value service that may be coming to may telcos in the future (I believe).

I'm sure Apple have very carefully calculated the incomes from the two scenarios: selling the phone unlocked at a higher price, and selling the phone tied into the providers and having a revenue share.

One thing's for sure; Steve's a smart cookie.

 

[CalBoy]

By 'simple' I mean a small compact phone that can be used for sending text and will fit in the pocket. For example the Motorola razr.

Ahh, I see what you're saying. In that case, the iPhone won't work too well because it's a bit large; that's why I was really interested in that now defunct rumor about an iPhone Nano.

Struth! That's incredible. I would never have guessed that there were so many mobile phones. Little wonder Apple want a share of that market.

Actually, I think Apple wanted to jump in more so because of the 1 billion phones used world wide. Add in emerging markets like India and China, and the future market for mobile phones will be quite large. Even 1% of it will be massive for any company.

My main point is that Apple would sell many times more iPhones if they were available on any carrier. OK, there's the added value of visual voice mail, but that will be an added value service that may be coming to may telcos in the future (I believe).

I'm sure Apple have very carefully calculated the incomes from the two scenarios: selling the phone unlocked at a higher price, and selling the phone tied into the providers and having a revenue share.

To be sure, sales would be higher if it was on multiple carriers. However, as you pointed out, $9 per month from ATT isn't a bad deal; over the course of a 24 month contract, it generates $216 in revenue. Considering that that is pure profit (Apple doesn't provide a service or product, so no over-head or expenses), and it makes sense why Apple would be willing to give up 50-60% of the (US) market; they make it up through the sharing plan.

One thing's for sure; Steve's a smart cookie.

Oh no doubt. He knows how to market, how to sell, and how to design. All good things for running a company.

 

[pamon]

should've been a bell that went off for that millionth iphone.. would've been awesome....

using mine since the beginning and love it...

looking for my $100 credit this week... apple...

 

[drater]

Is it true that the battery installed inside the iPhone can only be changed at the factory? I heard that it cannot be removed by the user. If true, than the user must send the phone back to Apple. I also heard that surfing the net is painfully slow. I am curious if the LCD can be easily seen in bright sunlight. Hopefully one day, phones with the brighter OLED screens will be sold.

It is true the battery only be changed at the factory.
Out of Warrenty: http://www.apple.com/support/iphone/service/battery/

Surfing the net not as bad as I initially thought. EDGE can be pretty darn slow, but it is also not loading up a WAP browser like on other phones. They are full HTML pages. But the option of WIFI on the phone makes it really nice and very quick. 3g would have been nice, but I understand the reasons behind it. Hopefully they will come out with a 3g in the future, but not too near future cause Apple fans will flip their $*&^ if they do.

I have had no problems with the LCD, it has a light sensor so if I am at home, and the lights are off and I'm watching TV it doesn't go as bright (unless I turn that option off). In the sun it does the same thing. But if you're in the blazing sun you aren't going to get a clear picture. It is the second best resolution screen Apple has ever shipped (second only to the new iPod nano that just came out).

OLED screens would be nice on phones, but that won't happen for a while. TVs haven't even gotten it yet and the cost of putting them on the iPhone would make it a lot more expensive. But it is a very beautiful screen. I'd suggest, if you haven't already, go to your local Apple or ATT store and play with an iPhone. You'll love it.

 

[Project]

I wouldn't say that the phones are any different to the ones available in the 'States, just that texting is the norm.

I agree and it baffles me when people say that Europe is this super advanced continent when it comes to cell phones. Its just not true. We basically get the exact same phones as the states, just a few months earlier. The iPhone here will be competing against the likes of the N95, just like it is in the States. It will also be compared with BlackBerrys which are huge in businesses here, and Windows Mobile phones which are gaining ground. The exact same BlackBerrys and WM phones.
Also, around 90% of phones sold in the UK for instance, are NOT 3G so I do not see why people think it will fail if it ships here with EDGE (which is superior to GPRS which is what 90% of phone in the UK use). And 3G coverage in the UK is not as widespread as people believe. I have spotty coverage on O2 in Manchester - one of the biggest cities in the country.

the biggest difference is in the texting as you say. But America is slowly getting into the whole SMS thing too and you have services like Facebook and Twitter that are pushing it further. Barely anybody video calls in the UK. I have *never* seen anybody video calling. Never.

Now when comparing to Japan and South Korea, yes, those are very different markets, both in terms of usage and culture. But Europe (outside of Scandinavia, which are tiny markets anyway) is pretty much the same as the States in terms of handset technology and models.