So how is the iPhone doing? Looking good for 10M sold this year

We had a lot of interest in the rumours leading up to the iPhone announcement a year ago, and then leading up to the launch of the iPhone in the summer and the bold projections to sell 10 million of the iPhone this year 2008.

I made a very detailed analysis of the quarterly, and regional breakdowns of how well Apple needs to do with the iPhone to reach its goals in Crunching Numbers for iPhone on 24 June last year. That was one of our popular blog entries of the summer. I promised then that I would revisit this topic as the end-of-year 2007 iPhone numbers come in to see how its doing.

Well, Apple has sold 4 million iPhones during 2007. With just that number (my model said they needed 1.7 million iPhones (plus 12% ie 1.9 M) sold by end of 2007 to be on target. Apple has sold 4 million, so they are doing twice as well as my model required. In general that is good news and as I was mildly confident Apple would hit its aggressive 10 million mark in 2008, now it gives me a lot of confidence that they may achieve that.

But, there are three problems, much as I suggested they might emerge. First, the USA sales are ahead of expectations, but European sales below. O2 in the UK fell short of its 200,000 unit sales target for 2007 (sold 190,000). I read two UK consumer mobile phone magazines last month having the iPhone on the cover and reviewing the phone. One loved it, gave the iPhone 5 out of 5 stars; but the other was lukewarm, gave it 3 out of 5 stars. Europeans are not nearly as hot about the (current) iPhone as Americans are. Also bear in mind, that I expected Apple to rapidly roll out the iPhone into all major European markets, but they have not done that. So as I mentioned, this is a dangerous strategy to win the 10 M global numbers, if the iPhone is loved in America but not finding its fans abroad; the US market is not big enough to sustain the sales all by itself. Note that in the Christmas season for the USA, this one time when the iPhone is still a novelty, it achieved 2.3 million iPhones sold (that includes Europe). Christmas is always the best quarter for mobile phone sales, so expect the quarterly numbers in the same markets to decline somewhat in the first calendar quarter of 2008 - which can be offset by new markets where the iPhone should be launched. But yes, the overall numbers are better than I expected, but am worried (a bit, not much) that they are not strong enough in Europe (so far)

Asians are even less impressed, and in Apple's quarterly results and its conference call with investors, Apple did not reveal which Asian countries will have the iPhone. Also the continuing rumours exist about a soon-to-be-released 3G iPhone but again Apple won't confirm (nor deny) that. The Asian launch does need a better phone than last year's iPhone.

Finally SMS text messaging. I've spoken to many iPhone users who have admitted that they are disappointed in the messaging. Not all - some have said the screen is very good and about as good as a good keypad, but that is a small minority. All have said they can't compose SMS text messages blind - most who also lament this fact. Perhaps Apple can improve the interface for the iPhone 2, or then maybe they'll bring us some kind of texting keypad, who knows. At 1-2 million global sales super chic style phone for the super-rich, it doesn't really matter. But if they do want 10 million sales this year (14 million accumulated iPhone users worldwide) then they do really need to deal with SMS texting.

Nonetheless, they are ahead with the iPhone. I am pretty confident, that as long as there is a 3G iPhone this Spring or Summer, then Apple will rather easily hit its 10 million mark this year. Very impressive for a high end expensive smartphone by a company that had never made a phone before. Remember it took RIM six years of sales to reach 8 million users for its Blackberry worldwide, and the Blackberry is less expensive than the iPhone.

We will keep on monitoring the story.

Comments

[Free iPod Touch]

The iphone has had an unparalleled success thus far, hope it keeps going :)

[Christopher Billich]

Hi,

German news site DER SPIEGEL reported some additional numbers on iPhone sales and usage for the German market a couple days ago which I think you may find interesting:

- T-Mobile has only sold 70,000 in Germany, making it the weakest of all markets the device has been selling in
- ARPU for iPhone users is up to three times higher than non-iPhone user ARPU
- iPhone users' mobile web usage is 30 times than of non iPhone-users!

The article at http://www.spiegel.de/netzwelt/mobil/0,1518,531187,00.html (sorry, in German) quotes the source as an internal memo at T-Mobile.

So yes, while sales in number of devices terms may not be that great, I think the potential rise in ARPU and specifically the way this thing is opening people's eyes with regard to the mobile web, the effect of the iPhone seems to be pretty profound.

BTW, agree with your opinion that we need a better iPhone in Asia...especially here in Japan and Korea ;-)

[Alan Moore]

Thanks Christopher,

Nice to know you are still reading us

Alan

[Tomi T Ahonen]

Hi Christopher and Alan

Thank you Christopher for the German numbers. Yes, seems to fit the pattern. I also saw something from France somewhere this week that apparently French iPhone numbers have done pretty well.

Like Alan said, thanks for reading and posting

Tomi :-)

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