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Sales of the Apple (NASDAQ:AAPL) iPhone in Europe are better than some investors thought, according to a research note today by RBC Capital’s Mike Abramsky.

Abramsky says carrier meetings and store visits in the U.K., France and Germany “point to solid European iPhone momentum.” He expects the company to sell 400,000-500,000 iPhones in Europe in the fiscal first quarter ending December 31, of an expected 1.65 million units. He sees 4 million units selling in Europe in calendar 2008; he raised his forecast for total calendar 2008 iPhone units to 12.5 million from 12.1 million.

Abramsky says that despite a lack of 3g and advanced Bluetooth functionality - and despite the high price of the device - “iPhone appears to be an early hit with European Smartphone consumers.” He says the phone outselling some competitive smartphones at O2, Orange and T-Mobile stores, including the Nokia (NYSE:NOK) N95 and E-Series, the Samsung Blackjack, LG PRada and HTC Touch and Herald.

And he adds that once Apple launches a 3G version and spreads distribution to more countries, “European iPhone sales appear poised for material improvement in demand and momentum.”

Abramsky tweaked his EPS outlook for the company; he now sees $4.81 for FY ‘08, up from $4.80; he goes to $6.02 from $6 for FY ‘09.

Apple Wednesday is up $4.94, or 2.8%, at $184.75.

Source: European iPhone Sales Better Than Expected