Featured Article: Analyst: Apple to Sell 11M iPhones in 2008, 17M in 2009
iDay Could Net Apple $216M
by , 11:50 AM EDT, June 25th, 2007
June 29 - the day Apple releases the iPhone - has been dubbed "iDay," although for Apple it might as well be called "ka-ching day." Based on some estimates, the iPhone could bring in over US$200 Million in revenue the first day it is available, according to TheStreet.com.
TheStreet.com's Scott Moritz figures there are 162 Apple Stores and 1,800 AT&T stores in the United States. That makes for 1,962 retail outlets where consumers can go to purchase an iPhone.
"So with 1,962 stores and let's say 200 phones per store, Apple stands to sell some 392,000 iPhones," he said. "With each phone selling for an average price of $550, Apple stands to take in $216 million in revenue on the evening of June 29. And that's not including online sales."
Selling 392,000 iPhones on the first day would be an amazing feat for Apple and AT&T since the combination iPod and smartphone won't go on sale until 6 p.m. local time, leaving only a few hours for sales in each time zone. So far, the most optimistic sales figures have come from the likes of Piper Jaffray's Gene Munster, and he is estimating that 200,000 units will sell in the first two days.
Should Apple hit Mr. Moritz's estimates, however, that could translate into an extra $0.02 per share, or an additional $2 million in profit, assuming that every 1 million iPhones sold adds $0.06 per share bottom-line profit. The numbers also mean that Apple would be looking at about triple the revenue it brings in on a typical day.
Despite Mr. Moritz's optimistic predictions, Apple and AT&T may not be able to process transactions fast enough to hit his numbers. Apple also will need to have enough product on hand at retail stores, and for now no one from Apple or AT&T is saying exactly how many units each store will have on hand.
Apple is currently trading at $124.8292, up 1.8295 (1.49%).
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Observer Comments
Mon Jun 25, 2007 1:27 pm Subject: What about online sales?
QuoteWell how exactly would you recommend he go about not being lazy and estimating something like that? At least with the B&M he can say there are X stores, if they can sell Y phones per hours that that gives us a total of Z phones for the night. How does he do that for online sales? Apple will simply sell out of whatever number they have on hand. I guess he should have flown to China and counted the number rolling off the assembly line. Man, he's so ignorant!Tommo_UK wrote:
I guess Scott Moritz is too ignorant, or too lazy, to allow for online sales from the Apple Store, where millions could be sold in mere minutes.
This type of estimating really doesn't do anybody any good. Apple is not going to sell two hundred of these things at every store on the first day. This device is too complicated a purchase to do that in that limited a time. People will 1) want to look at the device, 2) play with the device, 3) see what type of phone service options there are, and the list goes on. Many potential purchasers will wait out the initial reviews, and perhaps for a few software updates to catch initial software bugs. I fall into that camp.
Mon Jun 25, 2007 9:29 pm Subject: Re: does this guy know his math?
QuoteAnonymous wrote:
"that could translate into an extra $0.02 per share, or an additional $2 million in profit"
Apple makes $216 million and only $2 mil shows up as profit???
Apple has said that it will treat iPhone purchases as "subscriptions" and realize the income over a period of 24 months.
QuoteGuest wrote:
Author fails to mention that iPhones are tied to 2 year contract which means that even though the hardware can be realized the day of the sale, the real opportunity lies is the usage charges which Apple shares with AT&T. This revenue is cannot be recognized at the time of the sale but must be recognized as services are delivered. This will take time to develop but the potential impact to Apple's bottom line over time is where the real opportunity lies.
Perhaps you didn't read the message above or haven't been following this, but Apple announced some time ago that they will realize the revenue on the iPhone and Apple TV hardware as a subscription over a 24-month period. It has nothing to do with the services, which are provided by ATT, not Apple.
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