Tuesday, July 10, 2007

Apple iPhone Post Launch Frenzy

Apple iPhone was launched on June 29, 2007.

Unconfirmed reports indicated high-end sales of over 700,000 iPhones during the first two days of launch (June 29, June 30), and over 1,000,000 in the first few days. iPhones were sold out at most AT&T (NYSE: T) and Apple stores. "Shoppers may have taken home as many as 700,000 iPhones over the weekend, Goldman Sachs Group Inc. analyst David Bailey has estimated, twice his initial projection. Chief Executive Officer Steve Jobs has sought to use the connection to the iPod business, which pulls in about $10 billion in revenue a year, to reach his goal of selling 10 million phones in 2008."



Apple Inc. (NASDAQ: AAPL) stock traded as high as $134.50 on Tuesday, July 10, 2007 marking an all-time high for the company. Apple is scheduled to announce the quarterly earnings report on July 25, 2007 after market close.

Apple may introduce new, cheaper iPhone by Fall 2007

According to Forbes story, in a note to clients, J.P. Morgan analyst Kevin Chang said based on a patent Apple filed in November, he thinks a new iPhone is coming that will cost $300 or less. It is likely to be controlled by a scroll wheel, and might have limited functionality. He said the patent filing showed how to dial a phone number with the scroll wheel.

"We believe it's a strong sign that Apple could potentially convert every iPod nano into a nano phone," he wrote, referring to the company's popular flash memory-based music player.

The nano currently sells for $149 to $249, depending on the amount of included memory. The nano and Apple's shuffle iPod comprise the majority of the estimated 50 million iPods the company sells each year, Chang said.

Chang said there's "a decent chance" that Apple will accept operator subsidies for a cheaper iPhone model, which could sell 30 million to 40 million units in fiscal year 2008.

"The global introduction of this model should be much faster than iPhone, given the former's limited functionality and lower customization requirement," he wrote

Apple Competition

Motorola Needs To Be Quicker To Prevent The Big Squeeze
CNNMoney.com - 9 Jul 2007
Apple Inc .'s (AAPL) initial success with the iPhone increases the pressure on Motorola Inc . (NYSE: MOT) to move faster to launch exciting new products.With the popularity.....

Apple has not yet announced an European partner for the newly launched iPhone. There is speculation that O2 could be the chosen one.

Bottomline:
If Apple indeed sold over 1 million iPhones during the first week of launch, Apple is well poised to best its own estimate of 10 million iPhones during the first year of launch. This will be phenomenal. And the cheaper iPhone will only help cement the lead for the foreseeable future. Can Apple achieve the impossible barrier set by Motorola back in 2004-2006 of 60 million RAZR phones? Even if Apple sells over 10 million iPhones during the first year, the meaningful total impact on the revenue would only be about a third of the actual sales price, or about $1.6 billion in accountable revenue for the next fiscal year. This is owing to the fact that Apple will be counting the sale of the Apple iPhone over a two year period.

Who benefited most from the Apple iPhone launch besides Apple? Research In Motion Inc. (NASDAQ: RIMM) - RIM had an amazing quarter, beating profit and revenue estimates handily, besting all the analyst estimates, raising the quarterly estimates, and then announcing:

"As it prepares to do battle with the Apple (nasdaq: AAPL - news - people ) iPhone, Research in Motion (nasdaq: RIMM - news - people ) told investors that, after eight years of trying, it's finally received the official green light to sell its sought-after BlackBerry device in China. RIM will serve corporate customers in cities like Beijing, Shanghai and Guangzhou."

Apple has yet to determine its Asian partner for the iPhone, and will likely take a few years before entering the China market.

It's too early to predict as to who will emerge victorious in the Smartphone market: Apple, RIM, PALM or the emergence of Nokia, Samsung, LG, Motorola and more. For now, RIM has shown no signs of slowing down owing to the launch of the Apple iPhone. RIM CEO believes that all the interest around the smartphones actually helps RIM. RIM shares are trading at all time highs, and closed at $209.25 on July 10, 2007.


Apple Inc. (NASDAQ: AAPL) and RIM (NASDAQ: RIMM) are two of the top 20 innovators of The Innovation Index; Apple is the Number One Innovator for 2007 as per the rankings of the Top 50 Innovative Companies in the world by BusinessWeek.

Also check out the following interesting stories about the Apple iPhone Launch:
Apple iPhone Rising - June 29 Liftoff - Top Ten Innovations

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