Apple’s iPhone: My Official Review and Sales Projections
I finally got my hands on my very own iPhone. Sure, I’ve played with my friend’s and some of the ones in the Apple stores; but, boy is it sweeter to have my own. After 24 hours of use, I feel this is the best $200 I have spent in a long time. This is truly a rare time when dropping your cell phone (my old BlackBerry) into water can turn out positive.
The Best Consumer Product This Millenium
This is truly the best consumer product I’ve seen in some time. It probably dethroned its predecessor, the iPod. Sure, I wish the battery would last a little longer. But, the level of connection combined with the ease of use is incredible. I just realized that I can download the Facebook app and use my “Friends” list as a Contacts list, and email and make calls by clicking on the various info on my Friend’s Facebook profile. Unbelievable. And, I still can’t get over that I can play a motorcycle game by “steering” the entire phone itself. Anyways, I don’t need to say much more about the phone itself since there are millions of reviews out there. Read one of those.
How Many Of These Suckers Is Apple Gonna Sell?
First off, they have already about hit the 10 million iPhone mark for 2008 (according to most estimates). They did this in the first three quarters for the most part. I think Apple is going to sell 15 million iPhones for 2008.
What about 2009? I think that Apple will sell between 40 and 50 million iPhones in 2009. Now, this is based upon some of the estimates that I have read and a few other factors that I am going to detail next.
Many people here will disagree with me when I say this, but I think the iPhone is recession proof. Before I explain why, I would agree that Mac sales are definitely not recession proof, but I think the iPhone is. First, everyone owns a cell phone. Second, the $199 price tag is not a ridiculous number to spend. Will consumers forego buying a new plasma TV, upgrading a car, or even buying a new laptop during a recession? Absolutely. But will consumer spend $199 on arguably the coolest device around, a device they take everywhere, and is the best example of convergence out there? Oh yeah, they will.
We are underestimating the power of convergence here. Consumers do not have to now buy/upgrade/carry their cell phone and their iPod anymore. In some ways, they can save money by going the iPhone route instead of doing the iPod, cell phone product upgrade cycle.
In many ways, the iPhone can replace a new laptop! With the WordPress app on my iPhone, I can blog wherever I am easier than I could on a laptop (with slower typing) since I can take photos with the iPhone and upload them into a blog post seamlessly. I can also update my Facebook and Twitter statuses easier than ever as well. Social networking, blogging, staying connected has never been easier and it’s all from one device.
The other reason for my high projections is international growth. Apple has still only scratched the surface internationally. I’m looking for Apple to ramp up retail growth in other countries big time when others will be cutting back (they have the $25 billion in cash to help). China and other emerging markets, while the iPhone is already there, provide huge crops of new buyers of the iPhone.
Apple’s Innovation – Who Can Catch Them?
I’ve heard some people state that when it comes to innovation, Apple is at least a year ahead of its competitors. We’ve seen a slew of “iPhone killers” in recent months. All I have to say is that they came out with iPhone killers when Apple was coming out with the second iteration of the iPhone. They are all chasing Apple.
Google Android powered phones may be impressive, but by no means, are they superior to iPhones. The convergence capabilities with software such as iTunes blows away Android phones. Plus, the user interface is unmatched.
Apple has already surpassed RIMM in sales for this last quarter, and I expect this to continue. RIMM has been trying for months to get the BlackBerry Storm out and I doubt it will even match the iPhone in terms of capabilities. BlackBerry’s are great products but after moving from my BlackBerry to my iPhone, there is no way I will ever go back. The iPhone can just do so much more, so much easier. And, the unimportant, yet important coolness factor isn’t even a competition.
What will the next iPhone iteration look like? Perhaps, video conferencing? Or living room integration? You have to believe they are hard at work at some awesome new innovations.
With all of that said, you can tell I’m a huge believer in the iPhone growth story. Apple’s valuation is a screaming buy right now. Mac sales will slow during the recession, but they won’t slow as much as its competitors which means they will take market share. When the economy rebounds, Apple will come out the other side shining like never before.
Remember, Apple has a ton of cash and they can continue to innovate, develop, advertise through the recession while others have to cut back these areas.
I think that Apple’s stock is one of the best buys out there right now with a 3-5 year time horizon. I think in 3-5 years, the stock will be worth $250-$300. If Apple can make real progress conquering the living room, these estimates might turn out to be low.
I own the Apple stock and I am buying more at current levels.