Apple's Math Could Point To iPhone Overstock
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TechWeb - Apple remains confident that it can hit its target of 10 million phones shipped within its first year of sales, but financial analysts are wondering whether there's trouble brewing.
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Shares of Apple Inc. hit a new all-time trading high Tuesday after an analyst speculated that the company would come out with a less expensive, smaller iPhone later this year.
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One per cent is aiming too high Comment Steve Jobs sounds modest with his 2008 sales prediction: "10 million iPhones is one per cent of the mobile phone market". This is indeed true, but it's not a useful benchmark.â¦
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David Flashner thought he had it wired: Buy two iPhones last Friday when they first went on sale, keep one, and sell the other at a profit so big it would pay for most of the first one.
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While Apple expects its new OS, Leopard, to bring in $140 million between its launch on Friday and the end of the year, analysts think sales will be even stronger.
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An analyst for JPMorgan Chase made headlines recently by saying Apple would soon release an iPhone resembling its nano media player.  One of his colleagues, however, disagrees.
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Apple Inc., whose market value passed $100 billion in May as euphoria mounted over its iPhone, may be facing investor expectations that are too high.
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There's little reason to doubt that Apple will crush its numbers.
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Now with an official fresh consumer-grade iPhone in its laboratories, CE analysis firm iSuppli can fine-tune its estimates of how much of a markup Apple adds to the device, based on its estimated bill of materials. Each 8 GB model which retails for $599, iSuppli estimates, cost Apple a total of $264.85 in manufacturing and parts costs.
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Opening weekend sales of iPhones may have reached 500,000, according to an analyst's estimate, as Apple's much anticipated product saw sales that lived up to and even exceeded its hype.
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Apple may have failed to anticipate early adopters' anger over a $200 price cut, but the radical move reveals Steve Jobs' audacious plan to rocket the mobile device into the mainstream. Cult of Mac commentary by Leander Kahney.
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There are miles to go before Apple shareholders reap.
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The most expensive iPhone model could deliver a profit margin of more than 55 percent for Apple Inc.  after hardware and manufacturing costs, according to iSuppli, which examined the components of the widely anticipated device.
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(InfoWorld) - When Apple launches the iPhone on Friday, it is set to get a jump on its competitors and spark a flurry of new phone designs, regardless of how well the device actually sells. By introducing a combined smartphone, mobile e-mail platform, and MP3 music player with a touchscreen interface, Apple has sent other hardware vendors running back to their drawing boards. And the company has enjoyed positive press coverage since CEO Steve Jobs announced the iPhone in January, analysts said. Apple is feeding the fire with strong advertising in its retail stores. On Monday, staffers at the Apple store in the Cambridgeside Galleria mall in Cambridge, Massachusetts, wore black T-shirts with the logo "the wait is almost over," printed above an image of a calendar page for Friday, June 29. iPhone anticipation has already created a "halo effect" of increased sales for Apple's notebook and desktop PCs, an impact that is likely to increase after the launch, according to a report from ChangeWave Research. Apple posted a strong profit for the last period despite struggling with a U.S. federal investigation into executives backdating their stock options. In April,Â Apple beat Wall Street expectations by posting a profit of $770 million for the second quarter, an 88 percent rise from that period last year. Because the company has already garnered media attention and a sales boost from iPhone demand, Apple will suffer little damage even if the device is a flop in retail sales, one analyst said. "No way Apple will seriously impact Nokia or Motorola or Samsung, who combined sell over a billion phones a year. But if Apple manages to sell several million, then that is probably pretty good for their overall business," said analyst Jack Gold, founder of the research firm J. Gold Associates. "I think the potential gold mine is in the services, not the phone hardware." The iPhone will bring new subscribers to Apple's iTunes online music store, and Apple could make more money if it decides to launch future wireless mobile products like navigation, location-based services, VoIP telephony, and video streaming, Gold said. In the meantime, Apple has already given a headache to competitors scurrying to catch up, such as Motorola, Samsung, and LG Electronics. Even vendors with comparable products -- like Nokia's N Series and High Tech Computer's HTC Touch phones -- lack Apple's cachet and will have trouble competing on store shelves, he said. In fact, some experts are warning that iPhone sales could fall short of Apple's high expectations. Their criticism includes potential user confusion about Apple's "virtual keyboard," a battery that may fade too fast and is not user-replaceable, andÂ resistance by some corporate IT departmentsÂ to the added expense and security risk of supporting mobile e-mail networks in addition to the servers they use to support Research in Motion's BlackBerry device. Those drawbacks could limit the iPhone's success in the business market, said Shaw Wu, an analyst with American Technology Research. Still, the iPhone will be popular with those who tend to use smartphones more by scrolling through menus than typing long messages and who have made Apple's iPod music player a huge hit despite similar concerns about its battery, Wu said. Likewise, consumers will likely shrug off corporate security concerns and use mobile e-mail systems from GoogleÂ and Yahoo. In the long run, Apple will use the iPhone to beat its competitors in creating an end-to-end channel for digital media, spanning from Mac PCs to the mobile iPod music player, iTunes online store, and Apple TV set-top box for sharing Internet and television video content. The only thing Apple could do to spread that net even wider would be to offer iPhone models at less than the current $499 for a 4GB version and $599 for the 8GB, Wu said.
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With lines snaking around Apple stores and hype in overdrive, the iPhone seemed like a good investment &#151; not for keeping but for reselling.
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Blog: We've already seen that waiting in line for an iPhone wasn't really necessary. As a result, the profit margins aren't too great.
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First, let me gloat.  I bought $49,761 of AAPL on Oct 8.  My investment is now worth $54,933. That's 10.5 percent growth in less than a month. Hah! I bought the stock because I was going to buy everything Apple sold from now until forever. The last product I had yet to purchase was the company's stock. That was a mistake. The beauty of owning the stock is that you can use the increase in value to fund the hardware habit. So far so good.  My very dear friend Sylvia Paull bought an iPod a month ago. In a blog post today she calls it a gateway drug. Having read early reviews of the new operating system, she's ready to buy a 24 inch iMac.  I recognize the signs.  It's like a virus I tell you.