Blog Post

Why Selling “Only” 8 Million iPhones Won’t Be a Big Deal

Recently there has been a little buzz swirling about the fact that Apple is on pace to fall short of selling 10 million iPhones in 2008. Last week, a New York Times article noted, “After almost a year of strong sales that have made it one of the dominant smartphones in the United States, the iPhone has settled down to a less-than-spectacular pace: roughly 600,000 units a month, according to the company.” Now, never mind the fact that Apple still sold over 1.7 million iPhones last quarter. That number was down from the previous quarter, but the previous quarter was the holiday quarter, making a direct comparison, well, pretty much worthless for mostly obvious reasons.

And just yesterday, MSNBC’s Gary Krakow said in a video that Apple will need to license RIM’s Blackberry OS or Windows Mobile for the iPhone in order to gain market share in the business world. Gary says that Apple needed to do this because, in a nutshell, while Apple has done well in the smart phone market as a whole, they haven’t done well with businesses, and in order to do well in business they have to adapt a competitor’s OS. Is this guy serious? Never mind the fact that Apple’s iPhone roadmap event in March outlined the new business-friendly features coming so to iPhones near you, which should make the iPhone more attractive and more useful to big businesses.

 Just… just watch the video and prepare to be completely astounded by the insanity of it all. Don’t say I didn’t warn you.

Anyway, I digress.

The bottom line here is that whether Apple meets a certain sales figure just doesn’t matter, even if Steve Jobs himself set the 10-million-iPhones-sold goal. In the end, the only people who will really care about whether Apple misses 10 million iPhones sold are those who want to see Apple fail.

I don’t think we’re going to see Steve Jobs lose sleep if Apple sells “only” 7 or 8 million iPhones in 2008. Consider this: Apple had zero share of the cell phone market a year ago. Today, they have around 20% of the US smartphone market, according to IDC. That’s down some from the holiday quarter (October-December 2007), but still, going from zero to roughly 20% of US smartphone sales in less than a year is nothing to sneeze at. And it goes without saying that if Apple unveils a 3G iPhone next week as expected, we’ll see sales get a big boost.

Apple has laid a great foundation with the iPhone. It’s a great gadget that has been praised by almost anyone who has used one. Customer satisfaction is very high. And there are new goodies in the pipeline that are sure to make the iPhone even more drool-worthy.

Personally, I think Apple will reach 10 million iPhones in 2008 despite the slow-ish start to this year. After all, it has only been available in a handful of countries to this point, and it’s possible that some are holding out for the 3G iPhone (which, as I mentioned earlier, would probably give iPhone sales a shot in the arm). But even if Apple sells, say 8 million iPhones in 2008, I think it would still be a success. What’s important here is that Apple is building a strong foundation to build upon in regards to the iPhone. It’s still early in the iPhone’s development, and since it’s so early, straight sales numbers are not as important as building a strong foundation so that the iPhone can be an even better option for consumers a year from now. 

Anyway, that’s my take. What do you say? Does it really matter that Apple sell 10 million iPhones in 2008?

11 Responses to “Why Selling “Only” 8 Million iPhones Won’t Be a Big Deal”

  1. Constable Odo

    I meant to type 600 to 700 million potential iPhone subscribers. I think there’s only about 9 billion people on the planet. Now if Apple could just get 1% of humanity to buy iPhones…..

  2. Benjamin

    I love Apple products and have been around them since I was really young. I know 100 percent that Apple will sell 10 million iphones this year, and I cannot wait to laugh in the faces of those PC users who want Apple to fail like you said. I am upset over the fact that I do not have Cingular, and I am a current virizon wireless customer. I would love to see Apple release the iphone for Virizon or I am just going to have to wait even longer for my plan to expire.

  3. Constable Odo

    No way Apple is going to fall short of 10 million iPhone sales. Look for about 12 million. 70 countries this year versus 4 countries last year. Those 70 countries have around 600 to 700 billion potential iPhone subscribers. The older iPhone will be less expensive and possibly subsidized. The 3G iPhone will be faster (still hoping for true GPS) and has the great potential of corporate use and use as a gaming device. I have no doubts that Apple will blow away the 10 million iPhones sold mark.

  4. Bunyip

    Who the hell is this Steve Krakow guy? It’ looks like they dragged some wino out of the gutter and asked him his opinion.
    Lordy, even my mum knows that Jobs would NEVER license another OS. Why, when in every atom of his being he believes, and pretty much rightly so, that OSX is the far better OS.
    Oh, yeah, and the fact that Apple made a pretty public announcement that they’re addressing most of the business user’s issues anyway.
    Here’s a bottle of Ol’ Harper, Krakow, now back to your trashcan!

  5. i believe apple will breeze through the 10 million unit mark. india alone with their 250,000 retail outlets will need 1 million plus phones. thats 4 per store.

    not only that, i estimate 50% of these phones sold will download and pay for an app from the ‘Appstore’ resulting in incremental revenue that other phone manufacturers do not earn.

    only 4 days to go boys and girls ;-)

  6. I just think that, as you said, they’re going by the old OS’s current options- not the v2 with Exchange server etc. which is pretty much the only staple thing that is needed for a Corporate smartphone. Sure things like the Windows Mobile Word and Excel editors might be useful but in all seriousness, with the size and weight of small laptops these days who wants to use a 2.5″ screen to do those sort of things?
    Also, I don’t know about anyone else, but for your standard blackberry anyone with small hands is not going to have fun. I have pretty big hands but I still find the average blackberry too wide to hold comfortably.

  7. I absolutely agree with you. Ol’ Stevo won’t be too concerned if he doesn’t hit the mark. Look at the mac marketshare in the PC world, is he bothered that Apple is not a market leader? Nope, but Apple sure is making more profits vs. the PC manufacturers that ship more units a year.

    Sorry, i digress. I think the iPhone isn’t primarily meant as a business solution, though the new software would be a step in the right direction.

    If my hunch is right, the 3G iPhone will be a massive hit in Asia when it officially comes here later this year. Many countries here have already confirmed they’ll be carrying it. Even in Singapore alone, the mobile penetration rate is 107%, greater than the population. If 20% is what we’re looking at, we’ll add 1 million to that count right away. Let’s not even talk about India. After Asia, there’s only 1/3 of the world not covered yet – China. But well, that’s another post altogether.