I FOLLOW SPECULATION on sales numbers and the forecasts on the Apple iPhone's world domination have always intrigued me because bigger companies have fallen foul of investors when failing to reach and hold market share. For a few weeks, analysts have combed Apple's iPhone sales numbers and some discrepancies keep surfacing. Apple share price will take a beating, week on week, until iPhone numbers get some public discussion from Steve Jobs. Apple claims slightly over 3.7 million iPhones were sold in 2007 -- yet AT&T this week revealed it ended the year with "just at or sightly under two million iPhone customers". That two million has been boosted somewhat by an estimated 300,000-400,000 sales in Europe, analysts believe. According to PC Week, "The discrepancy is that the 3.7 million iPhones Apple says it has sold and the estimated 2.4 million sold by its network partners still leaves 1.3 million of the devices unaccounted for. That implies that around one in three iPhones are being purchased in order to unlock the device for use on other networks and/or for use with unapproved third party applications." That is certainly happening in Ireland. And since the unlocked phones equate to loss of revenue for Apple, the market has reacted by taking 4% off the value of Apple shares.
Apple has tried to stifle sales reports for the European market. And Apple chief operating officer Tim Cook told analysts this week that the company believes the number of unlocked iPhones in the wild to be "significant," but declined to furnish accurate figures.
Toni Sacconaghi of Bernstein Research cites these figures in order to claim a substantial market in unlocked iPhones, and speculates this news may also mean a build-up in iPhone inventory. "It indicates end-user demand for iPhone is lower than many investors may think based on Apple's sales figure -- and it points to slower iPhone sales in the current quarter, since much of this inventory is likely to be drawn down," the analyst explains.
To reach the 10 million mark of iPhones sold before the end of 2008, Apple needs to average 2.5 million phones in sales a quarter over the next four quarters -- or 200,000 more than what it sold during the big holiday season. This could happen, but probably means iPhones will become less expensive as 2008 rolls on.
Jonny Evans, Macworld -- "Where are Apple's Missing iPhones?"
Eric Savitz, Barron's -- "More on the Missing iPhones"
Adrian Kingsley-Hughes, ZD Net -- "A third of all iPhones sold ended up unlocked"
Adrian Weckler, Sunday Business Post -- "iPhone 1.0: Biggest Tech Flop in History"