Sunday, June 10, 2007

iPhone set to ring up strong results for Apple


NO CONSUMER device has stirred the worldwide interest to match Apple's iPhone, due to go on sale in the US on June 29.

Sony's PlayStation and Microsoft's Xbox 360 pale beside it. Even the phenomenally successful iPod did not gain celebrity status for at least a year after it was launched in October 2001.

To judge by the furore, iPhone is the most desired device on the planet, even though its $US500 ($A590) price tag is about five times more than average US mobile phone prices.

Even in Australia, which is not expected to see the iPhone on sale until late next year or early 2009, interest is keen.

A lot of iPod technology and design is in the iPhone, which may account for the fever of interest surrounding it because in the music-player market it is most desired, works well and is seen as a symbol of coolness.

The fact that Apple has not until now ventured into the highly competitive mobile phone market and, in that sense has no experience in this area, has no bearing on the issue; nor that Apple expects to sell only 10 million iPhones where Nokia, Ericsson and Motorola each probably will sell 300 million of their phones this year.

Expectations of success have galvanised US sharemarkets and Apple's stock is now at a high of $US127, having stacked on more than $US25 in the past month.

Gene Munster, of US analyst firm, Piper Jaffray, says Apple's share price could go to $US160 and that, with European sales beginning at the end of next year, the company will sell 45 million iPhones in 2009.

So what makes the iPhone so sexy?

It is a highly innovative touch-screen mobile phone, media player and wireless internet gadget using 802.11g technology, otherwise called wi-fi and available in thousands of areas all over the world.

Other phones have similar features, but none have quite the finesse of the iPhone. Even the touch-screen is different, and the device uses the Macintosh computer operating system.

It is beautiful to see and great fun to use. I have had one in my hand and made a call on it; to Steve Jobs, Apple's CEO (but he did not answer).

Munster estimates iPhone's price will halve in a year and then capture about 7 per cent of the North American handset market and about 3 per cent of the world mobile phone market.

Motorola's RAZR phone, one of the most popular of recent models, sold 65 million in 12 months after its launch in 2004.

Other analysts, including Jonathan Hoopes, of ThinkEquity Partners, points to the sales curve of the iPod. It sold 187,000 units in its first six months, from October 2001 to April 2002. It did nearly half a million in the next 12 months and 2.18 million the following year. Apple expects to ship 40 million iPhones in 2009.

Forrester Research analyst Charles Golvin expects Apple will continue to develop the iPhone, expanding its memory from 4 gigabyte and adding other technology, including, possibly, WiMAX that would improve wireless internet access.

The other sales-promoting aspect is that the iPhone incorporates what amounts to an iPod nano. Thus, if you add the cost of a mobile to the cost of an iPod, you get roughly the price of an iPhone, plus internet access.

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