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Zach Bass (a.k.a Ernie Varitimos) is Chief Bloviator of Investor in the Wilderness. He has 30 years experience as a Tech Maven, Investor and Consultant. Zach has been using Macs since their introduction in 1984, and investing in the markets just as long. His mission is to help guide all level of investors through the Apple Ecosphere and make sense of the markets. Zach's take on Apple, the markets, and life pursuits, will keep your mind tuned.

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Survey: Will Apple Blow Out iPhone Numbers?

July 25th, 2008 • Related • Filed Under

I’m surprised at the muted response to Apple selling 1 million 3G iPhones on the opening weekend. And since then we learn that every Apple store and every AT&T store are either out of stock or on very short supply. Think about this for a moment. Apple had to expect strong demand, and the reports are that they ordered at least 10 million iPhones to be built. Additionally, most analysts following Apple suppliers have concluded that the first wave of finished product should be around 3 million iPhones.

Now, everyone knows that Apple has a supply chain management system that is legendary. They are the envy of the industry. And there isn’t a single retailer on the planet that can match their dollar per square foot numbers. Additionally, only 22 of the 75 countries are online, the rest will be coming very soon. So, we must conclude that the initial shipment of 3 million iPhones have been sold already, and that the remainder 7 million must be en route. Also, you know Apple has order more iPhones to fill the backlog that will build. At this rate, by my estimation, Apple will easily sell 20 million phones this year!

How many iPhones will Apple sell in 2008?

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Thom 5 months ago 1 point
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The problem is right now all your assumptions are based on assumptions. Apple will gladly let us know when they've sold their 3 millionth phone. I believe they'll get there before September but the usual problems will befall Apple as did Nintendo's Wii. Supply chain issues. Of course these are quality problems and NOK and MOT would kill for them but they are problems none the less.

15 mil is a possibility and quite probable as well. 20 I don't think allows enough ramp-up time for the manufacturers.

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Zach Bass 5 months ago 1 point
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You're being too guarded there Thom. Nintendo is not known for supply chain management the way Apple is, so I don't see how you can compare them. Also, I don't believe Apple will announce any numbers until they've reached 10 million, maybe even then they won't. They love to keep us all guessing!

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Thom 5 months ago 1 point
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Unfortunately their current performance isn't very inspiring on the channel supply front. I know they've historically ramped up and it's smart inventory control but the scale of this launch is beyond their usual scope. And if Russia and China are added this year it will add even more strain.

If Apple doesn't beat 12 million it's a huge failure but I thing 20 mill is a stretch. 14-16 is a reality.

As an investor however I'd love for them to see 20+, truly!

I don't ever remember Nintendo having supply problems until the Wii though I was fairly young for the SNES and their old hand helds. GameCube started off slow but picked up, Wii's been having issues - amazing considering it's just a bluetooth enabled GameCube.

I like to guide like Apple UPOD, Under Promise, Over Deliver.

I tend to think of everybody as scum, then it's much easier for me to be pleased with them : )

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iFone Uzr 5 months ago 1 point
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I kinda think that if they $2.5 million iphones already, they would probably announce it...unless they are waiting for $10 million.

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Constable Odo 5 months ago 1 point
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Three million sold already? That really doesn't seem likely. I remember last week or so Gene Munster couldn't believe Apple sold even 500,000 iPhones in three days. I don't even want to guess at how many iPhones have sold so far, but I doubt if it's even 2 million. I'm sure they're having supply problems. I'll bet peak demand was much higher than expected and it's probably overwhelming Foxconn's assembly line. So Apple has to distribute them in dribs and drabs. All the sites that were discussing iPhone availability or lack thereof seemed to keep talking about a 10 to 20 day waiting period. I just can't believe that three million iPhones would have gone so fast and still have so many people waiting on them. I wish it were true, but really hard to believe. I don't think it matters to a lot of people that so many iPhones are being sold. They probably just think it's cutting into iPod sales and it's more or less of a tradeoff. WS isn't impressed this early on because nothing short of 15 million iPhones sold this year will even remotely get their attention. I doubt WS takes Apple seriously. They probably view it as a company that makes devices for overgrown children. Nothing like the mighty RIM that empowers all businessmen everywhere.

If Apple were to sell twice as many iPhones as RIM sold BlackBerrys, I still think RIM would be held in higher regard by WS. Looking back, I still can't imagine how the iPod impressed WS and yet the iPhone doesn't, even though it's in high demand. Oh well, I'm just puzzled about WS expectations, so I don't want to think too hard about why Apple's stock is so weak. Another thing is App Store downloads. I'd think that should be making a bundle of money for Apple, but WS doesn't notice that either.

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trav 5 months ago 1 point
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You need an option for "As many as they can build and ship" thats what I think, You tell me that number and that;s how many they will sell

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berbabed 5 months ago 1 point
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http://news.cens.com/cens/html/en/news/news_inn...

here an indication. Looks like the ships are piling up!

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rd4sndk 5 months ago 1 point
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I predicted that Apple would sale as many as 3 million the initial weekend of the launch. I was wrong but Had they had the supply and a better activation plan, I believe they would have sold close to 3 million. As it is, many were turn back each day during that initial weekend because of out of stock. Now, I believe that Apples MFG capacity is set at a long term rate of 2 million per month. They probably have revised that plan to 2.5 million per month. I now believe they had on hand at the launch 1.5 million iphones with a mfr capacity for 2 million per month. So, 1.5 + 2 x 6 = 13.5 million units. They will probably get to a run rate of 2.5 million per month by forth quarter. So at another .5 x 3months = 1.5 million more phones. Given us a grand total of 15 million for 2H08. Add to that 4 million from 1H08 and you get 19 million for 2008. They could probably sale more if they could make them but I don't believe Apple will pay for expanded mfr capacity until they are assured of the long term consumption rate.

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Partners in Grime 5 months ago 1 point
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"Nothing like the mighty RIM that empowers all businessmen everywhere.'

How many email accounts does RIM handle? Around 12 million?

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http://www.cyclelogicpress.com

Zoltar 5 months ago 1 point
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ConstableOdo, never thought of "following the money" when things apparently don't make sense? WS is evidently being manipulated by a setup of Apple enemies whom, in the process of targeting AAPL, make a boatload of money. They own the media clowns so it's easily done. See if it now makes sense.

IMHO 20 million easy! You'll even laugh when you look back. Plus I bet they're adding China in August as they announce the next 20 countries.

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KenC 5 months ago 1 point
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I don't know how you can say that the stock price is being manipulated. Quarter after quarter of profits/margins that are the envy of all. Market share ticking up nicely. Brand recognition ..... on and on. Redmond firing up their photocopiers again (like that will do them any good). Yet the people in the know are ready to hold a Going Out of Business sale at 1 Infinite Loop. No nothing to see here folks, move on.

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Ron 5 months ago 1 point
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Next time please hire a survey research specialist to draft the survey item and the response options.

If you are going to go to the effort of doing one, you may as well have one designed that will provide meaningful information.

Oh, wait a minute - self-promotion and meaningful information do not necessarily go together. Never mind. Carry on.

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Zach Bass 5 months ago 1 point
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Perhaps you could suggest a "meaningful" set of choices? This is an opinion poll with over 500 respondents. Are you saying that their responses have no significance?

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