From AppleInsider:
Investment bank Piper Jaffray is out with a bullish research note on Apple today predicting a diversification of the iPhone line into a multi-tiered family of handsets that will combine for sales of 45 million units next year.
The 4-page report, authored by analyst Gene Munster, attempts to outline the future direction of the iPhone family for Apple shareholders, offering guidance on how to best think about unit growth, changes in revenue share, and strategic shifts that may play out as the company enters new international markets like China where local dynamics may complicate its model of working with only one exclusive carrier.
“While most investors view our estimate of 45 million iPhones in 2009 as outrageously aggressive, we are maintaining our estimate based on several factors,” Munster wrote. “First, we expect Apple to introduce a 3G iPhone model with additional features in the next 3-6 months. We also expect Apple to offer an entire family of iPhones by January 2009 at the latest including lower priced models that decrease the average selling price (ASP).”
More specifically, the analyst expects a 3G model to arrive in June followed by a “perhaps more significant” introduction of a model by next year that will be priced between $200 and $300, addressing a more price sensitive market. As such, he expects iPhone ASPs to drop from $489 in 2007 to $365 in 2008 to $314 in 2009.
This pattern would mirror the path taken by Apple as it matured the iPod family, he said, where a slow by steady diversification saw the company enter lower price points with every new revision of the player. However, he noted that the iPhone’s unit growth curve stands to be significantly steeper than the iPods, given that Apple sold more iPhones in the first two days of sales than it did in the first three quarters of iPod sales.
“And the company did not sell over 2 million iPods in a quarter until the iPod’s third year of sales, whereas the company sold over 2m iPhones in the second full quarter of sales,” Munster added. “In sum, we believe the iPhone is a full 2-3 years ahead of the iPod in terms of its historical growth pattern.”
Compared to iPod units, which grew a radical 409 percent between Apple’s fiscal 2004 and 2005, the analyst is modeling iPhone units to grow slightly slower at 304 percent between fiscal 2008 and 2009, given some uncertainty as to how quickly the company roll out cheaper models.
Munster’s estimates also take into account the continued international rollout of the handset, which he believes will double the addressable market for the device every year for the next two years. With 3.7 million units having been sold through December via 6 carriers (who combined for a subscriber base of 153 million), he estimates the iPhone’s penetration into this addressable market to be just 3 percent.
Investment bank Piper Jaffray is out with a bullish research note on Apple today predicting a diversification of the iPhone line into a multi-tiered family of handsets that will combine for sales of 45 million units next year.
The 4-page report, authored by analyst Gene Munster, attempts to outline the future direction of the iPhone family for Apple shareholders, offering guidance on how to best think about unit growth, changes in revenue share, and strategic shifts that may play out as the company enters new international markets like China where local dynamics may complicate its model of working with only one exclusive carrier.
“While most investors view our estimate of 45 million iPhones in 2009 as outrageously aggressive, we are maintaining our estimate based on several factors,” Munster wrote. “First, we expect Apple to introduce a 3G iPhone model with additional features in the next 3-6 months. We also expect Apple to offer an entire family of iPhones by January 2009 at the latest including lower priced models that decrease the average selling price (ASP).”
More specifically, the analyst expects a 3G model to arrive in June followed by a “perhaps more significant” introduction of a model by next year that will be priced between $200 and $300, addressing a more price sensitive market. As such, he expects iPhone ASPs to drop from $489 in 2007 to $365 in 2008 to $314 in 2009.
This pattern would mirror the path taken by Apple as it matured the iPod family, he said, where a slow by steady diversification saw the company enter lower price points with every new revision of the player. However, he noted that the iPhone’s unit growth curve stands to be significantly steeper than the iPods, given that Apple sold more iPhones in the first two days of sales than it did in the first three quarters of iPod sales.
“And the company did not sell over 2 million iPods in a quarter until the iPod’s third year of sales, whereas the company sold over 2m iPhones in the second full quarter of sales,” Munster added. “In sum, we believe the iPhone is a full 2-3 years ahead of the iPod in terms of its historical growth pattern.”
Compared to iPod units, which grew a radical 409 percent between Apple’s fiscal 2004 and 2005, the analyst is modeling iPhone units to grow slightly slower at 304 percent between fiscal 2008 and 2009, given some uncertainty as to how quickly the company roll out cheaper models.
Munster’s estimates also take into account the continued international rollout of the handset, which he believes will double the addressable market for the device every year for the next two years. With 3.7 million units having been sold through December via 6 carriers (who combined for a subscriber base of 153 million), he estimates the iPhone’s penetration into this addressable market to be just 3 percent.
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