iPhone rollout: 42 countries, 575 million potential customers
Piper Jaffray analyst Gene Munster summarized the flood of recent iPhone deals in a note to clients Friday. The key numbers:
- 46 carriers announced to date (up from 6 currently)
- 42 countries covered (up from 6)
- 575 million total available market (up from 153 million)
Munster had expected Apple to announce a flurry of deals with overseas carriers in 2008, but not this fast. "The iPhone's international rollout," he writes, "is about 8 months ahead of our original schedule."
Assuming that the device maintains its current 3% market penetration, the recent announcements give Munster "increased confidence" that Apple will meet his published sales target of 12.9 million iPhones in calendar year 2008.
Well they should, since 3% of 575 million is 17.25 million iPhones.
For 2009, Munster is sticking with his estimate of 45 million iPhones — a target that represents the high end among mainstream Apple analysts. Apple achieves this, he says, by 1) opening up China and Japan, for a total available market of 1.1 billion, 2) introducing a lower-cost iPhone in January '09, and 3) increasing its market penetration to 6%.
As for the current round of deals, Munster believes that most of them are non-exclusive, a change that he expects will have a positive impact on iPhone sales, a slight negative impact on iPhone revenue, but "no material" impact on Apple's (AAPL) published earnings.
From the Gene Munster's list is missing Tim, Telecom Italia Mobile. The mistake is non ininfluent; the non exclusive italian mobile operator for the iPhone has 36 millions lines. This brings the total to 610 millions the adressable market, +6% than the Munster calculations
ex ped: Italy was included in Munster's Vodafone list, but you're right. Telecom Italia also has a contract to offer the iPhone to its own customers.
I believe Apple is looking to leverage the Beijing Olympics during this rollout to achieve a world-wide campaign. This will be a seminal event, disruptive even. This will be bigger, from a marketing perspective, than the Super Bowl Ad of 1984.
And I think Munster's estimates are conservative. I see 20 million iPhones by the end of 2008. Sure we're talking a potential market of over 500 million here, but we haven't even considered China and India. – zach http://www.zachbass.com
Can you imagine the uproar if Apple were to continue to sell the current iPhone and tomorrow introduce the 3g?
The screaming, "Greedy…" would be deafening. Complaints would abound. The anti-iPhoners would be fueling the blogging sites. The Apple support and customer service reps would be hounded into oblivion. The demand for returns, cancellations and cries for compensation overwhelming. And how about the carrier that has to deal with the customer face-to-face that bought an iPhone yesterday without telling him/her that they expect a newer and better one momentarily.
And the shareholders…bulls will become bears, bears will become rabbits.
But hey, I do like the idea that Apple should have continued to sell the old phone but at a reduced price. I wonder what business school he went to.
So, has it hurt the stock?
And to question, "How can they be in a business of selling products when they have no product?" when the cash reserve continues to grow and grow, the amount of 'free' advertising is enormous and the hype is humongous. Most important, its like music in a banker's ear.
As a shareholder sine 1997 (stock basis of $4), I am thrilled they are drying up the channel. The last thing we need is all the iPhones purchased 2 weeks before the announcement returned. Moreover, if you really are a shareholder, then you listened to the conference call in which they explained that they are booking NO iPhone revenue since early March because of the 2.0 software changeup. In other words, there is no impact whatsoever on this quarter’s guidance, and any sales from this quarter go into next quarter (amortized over 24 months, of course).
As a shareholder since 1990 when I bought my SE/30, I can tell you that you misunderstood the conference call and basic accounting. Public companies can't choose when they want to book sales. That a good way to get thrown in jail. Apple can amortize the service income from AT&T because that is service that is "sold" over time. iPhone sales go on the ledger when they ship and that means the iPhone numbers for the current quarter WILL look bad. Just buy the dip after earnings.
Anyone who has paid attention to Jobs/Apple over their history knows this one thing -
Apple is not in it for the money, like someone else here said, "Take care of the top – design/product/service/etc – and the bottom line will take care of itself."
Nope, money is just Wall Street's way of keeping score.
Apple is out to Change the Worldâ„¢
as a shareholder I am more concerned about the potential month of NO iPhone sales because none are available. As a shareholder sine 1997 (stock basis of $4), I am thrilled they are drying up the channel. The last thing we need is all the iPhones purchased 2 weeks before the announcement returned. Moreover, if you really are a shareholder, then you listened to the conference call in which they explained that they are booking NO iPhone revenue since early March because of the 2.0 software changeup. In other words, there is no impact whatsoever on this quarter's guidance, and any sales from this quarter go into next quarter (amortized over 24 months, of course).
kclendaniel…….
what screw up ??? are you out of your mind you'd prefer Apple keep producing iphones that no one will buy ??
let them run out a month of no sales is nothing..
One thing I like about the Jobs era Apple is the
disregard (in a good way) for shareholders, let me explain , not that Apple or Steve Jobs doesn't care about shareholders but they do not run the business with the shareholders in mind 100% of the times as most us corporations do ..
I'd like to quote Steve Jobs .. "we take care of the top .. (awesome products, support etc.. )
the bottom line will take care of itself"
and indeed this is a business lesson for all ..
Apple fortunately is not out there to make shareholders happy, they run a business that happens to be extremely successful and we as shareholders share in the profit..
Do you remember customer uproar when Apple lowered prices on iPhone. I believe, lower supply is to manage customer expectation when new version of iPhone 2.0 comes out and existing version will go on sale. my 2c
Gene Munster should stop to be a fan of Apple, influencing the market, he should begin to be a serious analyst. Anyway you American guys should learn the correct name of the most importand world carrier VODAFONE instead of VODAPHONE, once forever. The same for AMERICAN MOVIL, the right name is AMERICA MOVIL. A lot of other errors: Swisscom has 4.1 million users, not 4.5. Austria will have two carriers: T-Mobile and Orange. Orange will cover many other European countries. Nothing about Italy with TIM?
ex ped: Thanks. Passed along to Munster.
As a shareholder as well, I say quite your bellyache-ing, kclendaniel: Apple's almost certainly going to hit 250 this year – and that may be conservative!
What you define as a "screw-up" is simply a sign of enormous pent-up demand for a product that isn't even a year old!!!
Based on chart it looks like penetration rate is only for the mobile operators which have contract with Apple, since we went through issue of "lost iPhones" penetration rate is higher. Also, some product cannibalization occurred since people in new countries on the list use unlocked phones. In any case, looks like Apple will meet their iPhone sales numbers. Cool factor will prevail. http://www.ismashphone.com
PS
from the list Italy is missing since they have a deal with both vodafone and TIM (telecom italia)
BTW ,TIM also has a large presence in Brasil.. I wonder if in the future TIM will also have distribution rights in Brasil
What is the definition of "total available market"? I hope it's not a countries population count or even counting demographics that wouldn't have a phone (toddlers, etc.).
Also, I don't think it would be right to just be counting the number of subscribers carriers currently have.
Anyone know the exact definition this analyst is using?
ex ped: I believe it's the sum of the wireless subscribers each carrier currently has.
Munster number is spot on.. i was thinking 10% is more likely (55-57 mil)
Depending on the type of individual country packaging and bundles Apple can get there very quickly .. of course it's all specualtion but quite possible and in a short period of time.
If they are able to sell the 3g phones without a contract and unlocked .. well they are going to fly out the door
OK, so they are signing a lot of deals, but as a shareholder I am more concerned about the potential month of NO iPhone sales because none are available. I want some official news from Apple to explain this screw-up because even if they are announcing a new phone at WWDC they should still have phones available for those who would like them even if it was at a reduced price. How can they be in a business of selling products when they have no product?
Apple always likes to give conservative guide lines. They will sell atleast 20 million iphones by end of this year. People in India would love to spend 30,000 RS ($500) for an iphone specially in Mumbai,Delhi and other major cities……There is a big potential out there for iphone sales…
Curious, do the figures above account for Vodaphone's Indian & Australian base? That's got to be worth a few million. It only mentions Vodaphone as Europe.