11 Reasons Why 15 Million 3G iPhones will be Sold in 2008
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Over the past 3 years I have become a firm believer in Apple products, mainly due to seeing first hand how one Mac operated trouble free for several years. During this time I went through two computers and re-installed Windows XP about every nine months.
The only good thing about having to reinstall Windows every nine months is that I had also become a firm user of back up software –from my password manager to my “My Documents” folder was backed up often so that I didn’t have to “break down” after reinstalling Windows.
All this time, one machine on my home network kept running and running. At times some software stopped working on the Mac, but when I looked into it, it was usually something that was resolved with a software update.
Now that same reliability and ease of use is coming with the second generation of the iPhone –the iPhone 3G! Apple has predicted 10 million iPhone sales this year for the iPhone. I have researched the subject and I am calculating 15 million unit sales in 2008, mainly due to pent up demand in countries where 2G phones were relics and huge price cuts by telecoms.
My 11 Reasons Why at Least 15 Million iPhone will Sell in 2008…
1. This is a second generation phone. Much like the iPod and iMac’s, which did well after a few quarters, saw tremendous improvements in mainly software after the initial release. These improvements kept driving sales. The iPhone has also gone thru such an evolution. Since regular software upgrades are easy to manage, the iPhone OS just keeps on getting better.
2. This is a second generation hardware platform. I must insist that the first release of the iPhone was something that I didn’t get too excited about. It was way over prized and had limited functions. Since then the quality of the product’s hardware has improved with added functions like GPS and better battery life. It was already a ‘good thing’ and I don’t see that changing.
3. The iPhone SDK. Earlier in the year Apple released it’s first Software Developer Kit (SDK) for the iPhone, which programmers can use to develop software to add an untold amount of functions to the iPhone. Programs that Apple could never even dream up will be designed by developers in the coming months and years. And the sale of software via an online store will add even more revenue for Apple. The success format for such ‘open’ products with a development community will extend to Apple software where ‘tons of software’ will be available for running on an iPhone, albeit not all free.
4. Subsidize something and the demand grows! The last generation iPhone which sold about 20,000 units PER DAY in the first quarter of 2008 is now being subsidized by the major telecoms. From Europe to USA, the telecoms are bringing the price down to a few dollars, and in one case, to ONE EURO –of course, with about a 2 year usage plans that are mainly for business users. When a popular all in one phone is sold with a deep discount, millions will ‘line up’ to buy it.
5. Current corporate customers are paying *per* email with many plans to read their messages on-the-go. I have seen several resellers of the iPhone making it possible to connect via WiFi hotspots for free. No longer is there a need to mobile access to read email. Others are offering unlimited plans for data. All this means that the costs for the iPhone come down for users. Leading of course, to more users.
6. Going back to the original design and ease of use, the iPhone 3G has not changed all that much. In fact, my only argument is that the device is too small. I plan to get one, but I prefer not to use it as a phone, but as a hand held reading device and an Internet access computer. I hope I get my wish with a larger iTouch.
7. I have read about a lot of users, especially in Japan, who read books that are designed to be delivered page by page or chapter by chapter on to a small cell phone screen. I suppose applications like these running on a larger, high quality screen will open up to a much larger market. I for one would like to have a portable device to read my daily business paper. i think there are thousands of people who ride a subway or take other public transport would prefer the same.
8. Games, Music and More… Sure the iPhone will play music and store photos. I feel that it will also shine as a serious game player and an all-in-one remote control. Who know what else those programmers will think up as the next killer app?
9. Pent up demand. I have given a few reasons why the first release didn’t do even better –price, slow network speed, some functions missing. The slow network was one of the main reasons the iPhone didn’t do well in Europe. Now that obstacle is out of the way. The 3G phone will catch up to some very pricy phones with speed, at a discount. I’ve read that the Spanish telcom has pre-sold 300,000 phone, as of last week. This indicates to me that in places like Germany, France, Netherlands and the rest of Europe there is a huge demand for the phones. With the subsidies, the sales are only going to go up!
10. The COOL Factor. As one of the most recognizable brands, Apple is taking advantage of it’s market position with cutting edge products that are just too cool. I imagine in just a few months when the Christmas shopping season begins, several Apple products will be at the top of many wish lists.
11. I am getting one. Usually, I am the last person to get a high-tech device apart from a computer. However, I feel that the iPhone 3G will add some versatility to the basic Nokia phone that I have, in something that will almost do everything that I want to do with a hand held computer. Actually, I prefer a new iTouch, so, I may do a little waiting. The Sage can wait a bit!
Of course, Apple is a part of my work at NEXT SuperStock, and I am ‘long’ on it with a price target of $220, near term.
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