Munster: 500,000 new iPhones this weekend
Will there be long lines outside Apple Stores Friday at 7 a.m. when the iPhone 3GS goes on sale?
Gene Munster thinks there will, although not as long as last year's.
Piper Jaffray's senior research analyst issued a report to clients Thursday in which he estimates that Apple (AAPL) will sell half a million units of the new iPhone this weekend.
That's half as many as Apple sold the weekend of July 11, 2008, when the iPhone 3G launched and more than a million units walked out the door.
But Munster notes that the 3G went on sale in 21 countries, whereas the 3GS is launching in only eight.
He also believes the new model provides what he calls a "less dramatic change in value proposition":
"In 2008, Apple introduced the iPhone 3G at $199, a 50% reduction from the previous model, which drove demand up significantly. Most customers will be able to purchase the new iPhone 3GS for $199 (the same price as the previous model). As such, the change in value proposition for the iPhone 3G S is not as meaningful as it was for the iPhone 3G, leading to less of a surge in units at launch."
Still, 500,000 is a lot of iPhones. It's nearly twice as many as Apple sold in the last two days of June 2007, when the original model went on sale. And it's roughly 10 times the 50,000 Pres that analysts estimate Palm (PALM) moved in that device's first two days of sales.
Given the June 8 price reduction on the iPhone 3G ($99 for an 8GB model, down from $199), Muster declared himself "increasingly confident" in his 5 million iPhone target for the June quarter. That number includes 3 million iPhones in the month of June alone — 2.5 million old models and 500,000 new. See chart.
Query for Apple marketing: Who named this thing the iPhone 3G S? It's a tech writer's nightmare. Not only is it difficult typographically to distinguish the new iPhones from all those iPhone 3Gs, but the plural is awkward in the extreme. iPhone 3G Ss? Give me a break!
[STYLE NOTE: In its June 22 press release, Apple started referring to the new iPhone as the iPhone 3GS (no space). Pluralization is still awkward, but it's improvement. We're going with it.]
UPDATE: RBC Capital's Mike Abramsky is slightly more sanguine. In his Thursday morning note he's predicting Apple will ship 500,000 to 700,000 iPhone 3GSs (see?) this weekend. Proprietary research from RBC/ChangeWave shows pent-up demand for both the new iPhone and the discounted 3G model, he writes. 44% of 4,100 smartphone buyers surveyed in June said they were interested in buying an iPhone in the next 90 days, up from 30% in March. See chart below:
See also:
So… it was a million. Out by a factor of 2.
Does this article get an "UPDATE #2" with a new quote from Munster saying "oops, i was way off"??
Good thing this article was here to wrongly predict something we were going to find out anyway. And good thing the same person wrongly predicted the new iPhone wouldn't be introduced. When he wrongly predicts Apple's bankruptcy do let me know.
@Greg, Anytown USA
Yes, and EVERY major carrier now charges $5 more for 200 texts, that's why they were hauled into hearings to explain:
"Sen Herb Kohl, chair of the Antitrust Subcommittee in the Senate Judiciary Committee, sent a letter Tuesday to the four major wireless carriers–AT&T, Verizon Wireless, Sprint, and T-Mobile–asking them to explain the dramatic price increases for text messaging services." the hearing was last week. Google it…
So I'm simply saying the price for an iPhone is no different for data or texting than any other smartphone. Is it unethical? yep! And shows why the top carriers need to be brought down 7 notches by the public.
Get ANY smartphone… from ANY carrier… and the price will be very similar, the iPhone is not any higher priced is what I'm explaining.
Cable TV and Satellite TV is the same, unethical deal, they are not currently governed by "the market", but by collusion.
Nuff said…
@Tony
I know the Iphone is a smartphone. And the SMALLEST monthly plan you can have is $80 / month. THIS DOES NOT INCLUDE TEXT MESSAGING. There isn't a single person who doesn't add text messaging to their Iphone.
Than it's 5 dollars for 200 messages which equates to being able to send/receive a WHOPPING THREE messages a day. (again… anyone with this plan regularly will have overage charges)
So your next alternative is the 1500 text message plan which is an additional $15 / month making your bill $95 / month. Add taxes and you are at your $100 / month.
Again…. I still can't rationalize my SMARTPHONE BILL being my 2nd most expensive monthly payment (behind my mortgage)
Maybe they could have called it iPhone S to avoid confusion … definitely not the snazziest name they could have thought up
@Manny
you clearly didn't watch the video. the pre was slower in most tasks, and about the same in web browsing and emailing photos. i have nothing against the pre, but in the real world the iphone 3gs is a faster device. plus the iphone 3gs has twice the battery life of the pre, so keep that in mind.
S stands for Slow in iphone 3gs
Palm Pre spanks the iphone in real world tests of web browsing and emailing pictures. Video:
http://cnettv.cnet.com/speed-test-apple-iphone-3g-vs-palm-pre/9742-1_53-50073193.html
@Greg, Anytown USA
I think a lot of people still don't understand it's a "smartphone" not a "cell phone" so any brand from any carrier is going to cost about $30 more than a "cell phone" no matter what you do.
the iphone is a phenomenal device and yes, it costs about $80 a month… (not $100) but get rid of your land line phone and you'll be ahead… or get an iPod Touch, it has many of the same features, just not the phone portion unless you call over WiFi for free.
I currently have the Iphone 3g (which means i am at best one year into my contract, and I would like to state that I love my iPhone, and use it all the time. I use it for the commute, for GPS, for email, and games.
That said, I would state the following:
– battery life is not great
– AT&T service is horrible.
So will I upgrade? Not likely. The cost of upgrading is very expensive because I am still paying off the subsidy of the 3G. What would the new model give me? It would give me more memory, faster processor, and better (perhaps) battery life. It would give me an internal compass.
It will not give me much better software, as that is available to all 3G owners. It wont give me a better network — yet. While the phone is capable of a better network, that is all on AT&T shoulders.
So is the cost of (minimum 500-600 dollars) worth it for existing 3g owners? Im not convinced. I think this is going to be a wait and see.
I love that apple puts out new tech every year, but there are going to be times that people dont upgrade on a regular basis.
There are also some things that the iphone doesnt do especially well. Blackberry does background emails better. It just does. This is very key in an urban environment. like new york.
I am not upset that I got an iphone in the least, but people should look carefully before doing this type of investment.
@Ted: I could only "reserve" one because I'm adding a line to a family plan. That asterisk also applied to some other combinations, and in some cases, you must go to/order from AT&T. I'm thinking that maybe 60% of cases are covered, but if you're right, then hopefully, they'll be very little wait when I go pick up my 32GB tomorrow (or Saturday).
However amazing the Iphone may be…. I fail to see how so many people fail to see how expensive the phone is.
I will never pay over $100 / month for a cell phone… period.
An Iphone would cost me more than…
My high-speed internet
My Electric bill (except in July)
My Gas bill (Except in January)
MY DirectTV bill
My monthly car insurance
My monthly life insurance
I guess i'm not rich enough (or cool enough) to own an Iphone.
I'm getting a kick out of the comments slamming the iPhone from people who have clearly never used one. Now that I have one, I couldn't live without it. It's a phone, it's a photo library, it's an iPod. It lets me browse the internet, get weather radar, listen to online radio, watch shows. It helps me find my way when I'm lost. It helps me comparison shop and check prices at a store before buying. Oh, and I can keep in touch with work email from the driving range. Now that I have one, I understand what a game changer it really is.
A couple of other things. I love the millions of Apps and this answers my need for a computer. We have a PC and a laptop. My wife handles all of the photos from our really good digital camera. The camera is something I just don't use. Overall, this is a powerful tool in a small package that I actually plan to use quite a bit.
I think I am right in their target market right now. My wife has me convinced to give up our AT&T land line. I have a 13 yr old who has a cell phone and is now texting from his activities. I have an 11 yr old who is involved in sports and will be going to middle school. We also have two younger children now involved in activites and we are always on the go. I typically don't use my cellphone much, but we are never home anymore to get phone calls. I find myself needing the internet access more for weather reports for sports and getting my email. We are always on the go and whenever we are all home together it is family time and that means no phone calls. I am being forced into texting by necessity and I abslutely don't want to text on a numeric keypad. I also have an iPod nano and why not put all of that functionality into one device instread of carrying all kinds of different things. I am far from technophobic, but I am also not a first adopter. I think this is perfect for whatever I need. I will be buyinga 3G though. I don't need the 3G S yet.
I think Munster's assertion that this isn't as big a leap as the jump to 3G is subjective.
I have always considered an iphone to be an alternative to carrying a cellphone (calls), ipod (music), laptop (internet) and camera (photos).
When the first iphone launched, I felt the keys to get me to truly want an iphone are 32 GB storage (my first gen 4 GB nano just doesn't hold enough!), nike + support (I use this a lot with my ipod), and a 5 megapixel camera. The upgrade to iphone 3G went in the right direction, but not far enough.
Now, the 3GS does come in 32 GB and it does support nike +. The 3.0 megapixel camera is still not enough to make me leave my 7.2 megapixel digital camera at home when I want "keeper" photos, but of all the things I wanted in the iphone this is bottom of the list.
I won't be in line at launch, but I probably will be an iphone owner by the new year. Of course, I probably would be even more motivated to get one if it weren't for those three pesky letters… AT&T.
"I got an Ipod touch 32GB. Lets say I am underwhelmed and may have used it for less than 1 hour total since beginnning of this year.
It doesn’t make sense to pay a $200 ETF plus stand on line for 2 hours + to have the privilege of buying one.
Also they may be available after tommorrow. Try to convince these trust fund babies and others who have all this time to spare that and you will get a blank cluess stare"
Well, that's you. I use mine every day. My wife recently went back to work after maternity leave and I got her one for the commute. My mother-in-law was immediately enthralled by a device that allows her to have the thousands of pictures taken of her grandchildren all available on a device that fits in your hand.
I use it for weather, checking stocks, browsing the web while feeding my infant child, some games, movie showtimes, driving listening to music and podcasts, Amazon, at the gym, It goes on and on.
Perhaps you just lack imagination. I pre-ordered mine. I'm getting the 32gig $300 version. Am I a trust-fund baby? Nope. I work for a living.
Now I will have all the other stuff I do on my 32gig ITouch, but I can throw away my 5 year old, rapidly failing phone and I get GPS and continuous connections to boot.
I'm giving my 32gig IPod Touch that I purchased in Sept to my 5 year old. Guess what, she doesn't have a trust fund either. At least not yet. After all a trust is prudent financial planning and I plan prudently which is why I can afford this great device.
Perhaps you should understand your usage patterns before throwing away money. Makes you seem like you have money to burn. That's probably why you get those stares: people don't understand wasting money.
I got an Ipod touch 32GB. Lets say I am underwhelmed and may have used it for less than 1 hour total since beginnning of this year.
It doesn't make sense to pay a $200 ETF plus stand on line for 2 hours + to have the privilege of buying one.
Also they may be available after tommorrow. Try to convince these trust fund babies and others who have all this time to spare that and you will get a blank cluess stare
@David, Amherst, NY
The iPhone 3GS is a much bigger advancement than the 2G to 3G model. Now we are getting a magnetometer, video camera, high end still camera, two times faster than a 3G, etc.
A full list is here:
http://www.apple.com/iphone/iphone-3g-s/
Also watch the tour and you'll see why the 3GS will outsell the 3G 2 to 1.
"Who cares?? It’s a freakin phone people.
There are still people losing their jobs & homes and going hungry.
We are fighting wars in Afghanistan and Iraq and you idiots are jonesing for a freakin phone.
Get lives you morons
Posted By Pat, Houston, TX :"
What's your beef? Every day in the world someone dies or loses his job. This happened before the recession and it will happen after. Should all other facets of life stop?
"Well, I would go to a movie, but someone is going hungry."
"Why go to work? Someone is dying today."
You just realized this or something?
I've never quite got people with this attitude, one of seemingly "All news must be about Iraq, or the recession, or some other calamity." There is an entire world of news and life going on at it should not stop because bad things happen.
What's also puzzling is someone reading the article, just to complain about it and being wrong to boot. It isn't a phone. I phone makes calls. It is a computer. I can make calls on it or my PC. I cannot pick up my cordless phone and browse the web.
@ mark – no, it allows you to buy if you have an existing iPhone or want a iPhone for the first time. so 80% of conditions are met, give it a try and see.
@ Pat
That's not a very productive attitude. The iPhone is changing how world society works & interacts, so it's a very big event when a new model is released.
So it's more than a "phone"… it's a productivity revolution. Get one and you'll see what all the excitement is about.
Who cares?? It’s a freakin phone people.
There are still people losing their jobs & homes and going hungry.
We are fighting wars in Afghanistan and Iraq and you idiots are jonesing for a freakin phone.
Get lives you morons
These kind of people are a joke. Hey I am going to disneyland- WHAT DON'T YOU KNOW THERE ARE etc etc, Hey I am going out to eat with friends-WHAT DON'T YOU KNOW blah blah. Hey I just bought a new car- WHAT DON'T YOU KNOW yadda yadda. Kick them to the curb as soon as possible, they are nitwits
I think Munster is underestimating a bit (maybe 1m) for the quarter since standard practice is for Apple to record sales when the carriers receive them, not when they are sold to consumers (excepting those sold at Apple's Stores). So the supply chain is being filled.
@Ted: You can only buy it online under certain conditions, but that's still better than what Nick L griped about.
@Frank: The $99 model is certainly garnering new buyers even if it seems silly to ignore the data plan cost. But that's true for the Blackberry BOGO free offer as well, and it's given RIMM a boost. In any case, the key statistic is Verizon retail postpaid churn, which was 1.14 in 1Q09, the highest its ever been, up 30% from .89 back in 1Q07. People have been leaving Verizon, many for iPhone. (AT&T's churn was 1.2 last quarter, which is now just a tad worse than Verizon, but few of them are iPhone users. The churn gap has closed.)
@Frank
I concur.. The real questions are
1) Has the Apple product line mature in the smartphone market?
Not that it can't grow but the next model rolls out, there are going to be very few upgrades or changes to the phone that does not bring the WOW factor that the 1st and 2nd phone brings. Just look at the Windows (Do not get me wrong, Steve will won but not in frequencies that would flock people to buy like they did before).
2) Is the phone carrier (AT&T) hurting their market dominance or helping?
I know people say I am crazy but when more phones are distributed through multiple carriers, the service price go down as well as carriers demanding price reduction on the iPhones (Look at how AT&T subsidize the phone to make it up in the plan and what Apple is demanding). I could see it growing with it sold in multiple carriers (if possible when you consider the issues of coding on multiple platforms for apps, etc.) but Apple might not get the profit margins on the product they sell.
3) With the economy present, is the iPhone going to sell like its previous models?
That is the question I do not think they would but the older models which had a price reductions. I just do not see the 3G S outpacing the 3G because money is tight on many consumers (let alone, they already have the phone and get no free upgrade from Apple/AT&T to the 3G S)
I am still using my original 4 gig ipod nano that cost me about $250. So in my mind I get a 16 gig ipod plus a phone for $199? I'm sold. I used to buy technology when it came out, then I figured out that if I just wait I will get better deals.
@Nick.
I was going to say jon is wrong to think iPhone is just a basic cell phone. However, comparing to you, he is awfully smart.
If you are using the cell phone as a normal phone, why do you need a blackberry?
If you are using BB for data/email, you would need a data plan anyway, also with a 2year contract whichever carrier you use.
By the way, iPhone users can upgrade to 3GS even though they are only one year into the contract. Try upgrade to a new BB with that.
@ Nick L
No, you can buy an iPhone online without waiting or going to a retail store. I bought 2 yesterday via this link.
http://www.apple.com/iphone/buy/
The iPhone is quite a bit more functional than a blackberry, (i've used both) so hopefully you get an iPhone soon.
I have a used basic cell phone and pay as I use (about $100 every 6 months). I can make a call and I can get a call, it's perfect. TOTAL cost $200 per year. Now who's smart and cool????
@Rick
If you're so worked up about all the other world issues, stop posting on tech blogs, get out and start helping or STFU.
{{{Market growth is pretty much done for iPhone. Those who want it have it – and those who do not are either waiting for another carrier choice or lower data plan pricing.}}
Question is how many people will break their contracts with the other carriers to buy an iphone.
There will not be another 'carrier choice' for at least a year or two, then the next versions of Iphones will be out. This one just ads back features that should been included in the last one.
Next, lower pricing?? you must be dreaming. Many happily spend over $100 a month for the priviliege of using this iphone for the 24 month contract duration
The 'buying process sucks'.
Must purchase an AT&T contract where the cheapest rate plan BEFORE data or text is $69.99.
Cannot buy online so have to stand online and wait hours to purchase a phone
Will many who are in the middle of 2 year agreements with the other two major carriers pay the $200 ETF so they can pay close to $100 a month for the privilege of carrying an Iphone.
I will keep both blackberries which suit me fine the 8900 & Bold. and many will do the same. just look at RIMS sales figures vs. apples.
Who cares?? It's a freakin phone people.
There are still people losing their jobs & homes and going hungry.
We are fighting wars in Afghanistan and Iraq and you idiots are jonesing for a freakin phone.
Get lives you morons
I guess the telling stastic will be how many buyers are NEW vs. upgrades. I get the sense it's a whole initial inslaught of upgrades and then a trickle of people are they come off their other contract either on at&t or switch. Market growth is pretty much done for iPhone. Those who want it have it – and those who do not are either waiting for another carrier choice or lower data plan pricing.
@Rick from Palo Alto
You're an idiot.
I, for one, enjoy PED's Apple 2.0 articles.
If you don't like it, don't read it.
Now crawl back into your silly, little world.







I sooooooooo wish I could be paid to write uneducated guesses…. count your blessings, give to charity, Mr. Munster.
ex ped: In Munster's defense, Tommy, he was out there Friday counting heads. His estimates were off, but they weren't uneducated.