RBC Analyst: Expect 1 Million 3G iPhones to Sell on Launch

Initial sales of Apple Inc.'s (AAPL) new 3G iPhone launched Friday are expected to be four times that of iPhone 1.0, after its launch last year, according to a new report from  RBC Capital Markets.

Analyst Mike Abramsky said he estimates Apple will ship more than 1 million 3G iPhones over the first weekend of the launch based on pent up demand, expanded distribution, and lower pricing. He added that he expects 5.1 million units to be shipped in the fourth quarter and 6.5 million in the first quarter of 2009.

He said the initial 3G production estimate of 1.5 million units may lead to limited stock and frustrated buyers leaving empty handed after long wait times, but doesn't expect that to deter buyers. 

He said:

Early reviewers liked the iPhone 3G for its 3-5x faster speeds (over EDGE) and lower subsidized price.

 He added that while camera, battery life and higher priced service plans remain concerns, iPhone 3G still outpaces other 3G phones and "remains unmatched by competitors in its interface and user experience."

Mr. Abramsky also said The Application Store, Apple's new online shop that allows iPhone owners to add an array of applications to their gadget, is an "value builder" over time. He likened it to the successful relationship between iPod and iTunes. 

The analyst maintained his "outperform" rating and $220 price target.

Comments

[Oh Blah Dee Blah Dah]

RE: "The analyst maintained his "outperform" rating and $220 price target."

=====================
Mr. Abramsky is too conservative. Apple is selling out everything it makes while the economy is in a SEVERE SLOWDOWN.

When the economy does pickup, Apple will NOT be able to keep up with the demand for its products.

2008 Jul 12 02:01 PM

[rd4sndk]

agreed, Abramsky is grossly off in his predictions for the 3G iphone. His conservative estimates doesn't take into consideration the canibalizing of the ipod and mp3 markets. I estimate they'll sale 1.2 million in the US alone and twice that everywhere else. If you make the assumption that on average each country does 100K iphones in the first weekend, then you reach a number of 2.1 million world wide excluding US. Include the US and you get 3.3 million the first weekend. I also estimate they'll sale somewhere's upperwards of 6 to 10 million this Christmas albeit at the expense of ipod sales but this is not a bad thing given that the GM and ASP for the iphone is higher than that for the ipod. Secondly, residual sales from the apps store and itunes bolds well for Apples bottom line and future sales. My god, some are saying the Apple could do $1Billion in apps store sales a year.

I further estimate that Apple will move above $10Billion annual cash flow and by this time next year will be sitting on a hoard of $30billion+ in cash. By 4Q09 Apple will have $37 to $40 billion in cash and would have to start putting some of this FCF to work for share holders in the form of stock repurchase, annual dividends or special dividend. Given Job's personality, a stock repurchase may be what he chooses because he then will have control over whether, how and when the money is spent.

2008 Jul 12 02:33 PM

[Shorting Should be Banned]

Looks like AAPL moves past GOOG's market cap this year, and MSFT's next year.

2008 Jul 12 05:52 PM

[Toni]

Are we at 200 ? 190 ? 180 ?

2008 Jul 12 05:53 PM

[Network Effect]

Does anyone have an update of the # of downloads of paid for applications and free apps for the iPhone? A couple hours before the thing launched, there were 25K paid for applications downloaded and 250K free applications. I can only imagine how many will be downloaded at the end of the weekend. If the sales numbers are even as close to what they predict, the downloaded apps number should be off the charts. The apps, or the ecosystem around the iPhone is the real game changer and money maker here, the hardware is just a trojan horse, and it is a gold mine all by itself. The revenue opportunities are endless.

2008 Jul 12 06:36 PM

[tuskagee]

Now, some people should pipie down.

2008 Jul 12 08:12 PM

[tuskagee]

Doesn't matter what detractors say when Apple has probably sold close to a million phones this weekend.

2008 Jul 12 08:15 PM

[tom1234]

all this sounds good ---and from your mouth to God's ears ---there were not as many new products this time last year and aapl was still debt free with a little less of a cash position--the stock sold much higher ---is not the market six months ahead of time --where is the logic of $220 per share ---should it not be worth more now --my friends are selling oct 175 and oct 180 calls as a hedge on their stock positions --- i was looking for $300 ---i am trully confused ---

2008 Jul 12 09:28 PM

[tom1234]

oh the at&t store where i upgraded two of my phones said they were sold out ---but doubted they received 1500 iphones ---now there is a 10 to 12 day delivery time with the comment what is apple doing ---

2008 Jul 12 09:37 PM

[Shorting Should be Banned]

'Are we at 200 ? 190 ? 180 ?'

What are DOW, NASDAQ, and S&P at? AAPL does not trade in isolation.

2008 Jul 12 10:22 PM

[tuskagee]

"Looks like AAPL moves past GOOG's market cap this year, and MSFT's next year. "

And Apple makes actual products people will wait hours in line for.

2008 Jul 13 08:02 AM

[samij]

just for the record, mike a. got it all wrong last year when he estimated the sales of the first weekend to be double of what they turned out to be.

he also estimated apple to sell 1m during the first two week, milestone apple didn't achieve until september, or two months later.

considering he didn't get it nowhere near correct with only one market to take into account, predicting the sales this time around is pure guesswork on his part.

2008 Jul 13 08:42 AM

[Shorting Should be Banned]

and for the record the iphone was launched in 1 country last year and in 22 countries this year, with stockouts in many places.. ...go back to sleep!

2008 Jul 13 11:56 AM

[texasgolfer]

Are I phones only "cheap" in the US due to $ fallings but what are purchase prices in other currencies.

2008 Jul 13 02:42 PM

[reagan]

Go away,Toni. You are boring us.

2008 Jul 13 04:01 PM

[Tremaine]

Was at the mall a few hours ago and saw at least 40-50 people waiting in line just to get in to my relatively small local Apple store. There had to be 50 more people inside. Most other stores were practically empty. I've personally, never seen a line for any cell phone release. Of course, this isn't just any cell phone.

2008 Jul 13 05:32 PM

[Zoltar]

Yes, last year Mike A. Was wrong but this year he's probably right since the launch was in 21 countries MORE. Here in Portugal there were two launches at midnight with great fanfare and TV celebrities etc. by both operators.

Anyhow, it was only at 3:30 in the morning that I and my partner got our iPhones! And we're so happy we did. Not out of the hype but of using it!

And the third carrier making the mews they had last week rushed to London (London, WTF?!) to get an iPhone deal too - they are the biggest with lots of Wi-Fi hotspots. This carrier is 50% partner with Telefonica in Brazil's biggest by subscriber carrier Vivo!

2008 Jul 13 09:58 PM

[Shorting Should be Banned]

I see the $7,000 iphone video has been posted again today, so I have to say this; If we followed the logic used, we should not buy food, clothes, cars, or homes and instead put the money into retirement plans, so that we are homeless, hungry, and naked........, but Rich at retirement.

2008 Jul 13 10:14 PM

[Toni]

Ouch, no 1 million sold on launch.

2008 Jul 14 09:14 AM

[Jon T]

Toni, you really are an idiot.

Apple press release today announces OVER 1m sold on the weekend.

2+ days versus 74 days for first iPhone.

AND, 10 million apps downloaded. Looks like Apple may have created a few more millionaires over the weekend.

Everyone say after me: "TONI JUST LOST ALL CREDIBILITY!"

2008 Jul 14 09:54 AM