Analyst: iPhone Supply Key to Early Success

June 13th, 2007 at 3:00 PM - Apple Stock Watch by Jeff Gamet

Appleis combination iPod and smartphone, the iPhone, is scheduled to debut at 6p.m. on June 29. The big question isnit whether or not consumers want it, but whether or not Apple will be able to meet the demand, according to Piper Jaffray analyst Gene Munster.

"Appleis production ramp for the June 29 launch of the iPhone remains one of the biggest questions surrounding the event," he said.

Mr. Munster expects Apple will have up to 10,000 units on hand at its largest flagship stores and about a million units available throughout its retail shops on launch day. Should Apple be able to maintain an adequate iPhone supply, the company could beat Mr. Munsteris 200,000 sold during the last two days of the June quarter prediction.

Mr. Munster added "We also expect Apple to leverage its retail locations as ihubsi for the evening launch event, hosting parties with DJs at some of the stores to create buzz on the 29th."

The iPhoneis touchscreen makes up another unknown for the near-term success of the product. If the touchscreen performs below expectations, consumers will be less likely to make the purchase.

One small vote of confidence for Appleis touchscreen is already in. The Wall Street Journalis Walt Mossberg has been using a review unit for several days, and has already noted that the display works better than he expected it to. Mr. Mossbergis early comments bode well for the device since many consumers and investors are closely monitoring his iPhone impressions.

Mr. Munster is maintaining his "Outperform" rating and US$160 target price for Appleis stock. Apple is currently trading in the pre-market at $117.75, up 0.25 (0.21%).

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