Sacconaghi: How Apple sells 50 million iPhones in 2011
Apple Inc.
Piper Jaffray's Gene Munster — an Apple optimist — took a lot of heat when he predicted two years ago that Apple (AAPL) would sell 45 million iPhones in 2009. Unfortunately for him, the deal he expected Apple to strike in China still hasn't materialized, and he's since cut his 2009 expectations back to 25 million.
Now comes Bernstein Research's Toni Sacconaghi — usually considered an Apple pessimist — with a report that has Apple selling at least 50 million iPhones a year by 2011, up from the 20 million he's modeling for this year.
How does Sacconaghi expect Apple to get from 20 million to 50 million?
In three steps:
- By growing with the market: +10 million. Sacconaghi projects the smartphone market to grow by 27% in 2010 and again in 2011. By simply holding its current market share, Apple could add 10.3 million iPhones to its annual sell-through by 2011.
- By broadening its distribution network: +19 million. In most countries, Apple has only one carrier. By making deals with additional carriers, it could nearly double its 2009 sales. Verizon alone could add 11 million sales in the U.S. by 2011.
- By striking a deal in China: +3 million. Sacconaghi expects Apple to be selling iPhones through China Unicom before the end of the year. If Apple were to also cut a deal with giant China Mobile (500 million subscribers) before 2011, all bets are off.
iPhone on Verizon? Not going to happen in the near future. The iPhone uses GSM like most of the world, and Verizon uses CDMA, popular in the USA, S. Korea, and a few other countries. When that changes, and it is some years out, then Verizon may get the iPhone.
ex ped: I assume he's talking about LTE, which could in theory be available on Verizon's network by 2011.
REL "If Apple were to also cut a deal with China Mobile before 2011, all bets are off."
China Mobile could sell 50 million iPhones by itself. A deal with China Mobile would make the 50 million iPhone sales a certainty.
The GSM issue really isn't an issue. Apple could easily modify their phones to work on CDMA. Especially if it leads to apple selling another 11 million phones they will make the modifications. Apple has already shown they are willing to make modification to the iPhone in other countries if it opens the market.