Did iPhone Sales Pass 10M Already?

Smartphone sales were up handsomely in the U.S. in the first half of the year and the average price of smartphones was down 26% to $174 in August (via NPD Group). With consumer spending on the wane and all the doom and gloom of the current economic climate likely to seal wallets even tighter, some analysts still believe smartphone sales will remain resilient, lower prices and increased competition luring consumers to substantial improvements and value at relatively low entry points. There’s not really any way of validating the forward looking claims but to start the week, a handful of new smartphone data points have hit the market to help fuel the debate.One even suggests Apple (AAPL) may have already sold ten million iPhones in 2008.

iPhone Sales Beyond 10m Units Already?
Just a week ago, Pacific Crest analysts issued a report projecting that Apple would cut their 2008 3G build targets from 18 million units to 14 or 15million.  They blamed “supply chain channel checks" but said they didn’t believe the adjustment would have much impact on Apple’s sales. Monday, independent bloggers came out with a bullish projection of their own that suggested (if they’re accurate) that the production shortage would really have no impact. Using data collected over two months from participants at the Mac Observer’s web forum and Investor Village, bloggers Andy Zaky and Turley Muller published a report saying Apple may have already exceeded their annual iPhone sales goal of ten million phones. 

The basis for the writers’ claim was the interpretation of International Mobile Equipment Identity (IMEI) numbers. These unique numbers are assigned to every GSM phone to help the operating carrier network identify the phone as a valid device. They’re used largely as a tool to prevent stolen phones from being used without authorization (via the IMEI number a phone can be blocked from accessing the network).  

Every IMEI number is a unique 17 or 15 digit sequence. Like a credit card number, each different grouping  of the digits has a specific meaning. The first set, the Type Allocation Code (TAC), represents the particular model of phone. The second set, a six number sequence, represents the serial number of the specific unit. Since only six digits are allocated for the serial number, every million units (999,999), a new TAC number is added for the phone model (the additional numbers are for check sum and software version information).   

From August through September, new iPhone buyers around the world submitted their IMEI information to the web forums. The cumulative numbers were assembled into a Google spreadsheet and analyzed. The last number provided was a phone manufactured on September 29th and purchased on October 5th.  Its sequential number was 9,190,680. 

Recognizing not all manufactured phones are sold, that some have defects or are still in inventory and others may have been exchanged, the bloggers interpreted the results saying that “[the number] suggests that even if a whopping 1.5million iPhones of the total IMEI registered devices are unsold as of today…it would still put 3G sales at 7.6 million units and 2008 iPhone sales at over 10 million units.”

The report is a bold claim and the logic seems sound. The question is: was the interpretation of the IMEI numbers accurate? That’s hard to know. While the spreadsheet is out there for review, the report presumes Apple is in fact using all of the numbers in the sequence. It’s possible that may not be the case. 

But if the interpretation is accurate?…. It means Apple reached their iPhones sales target three months early and may be on track to exceed expectations.     

Carrier Defections for Must-Have Phone?
Another bullish bit of data favoring iPhones was released in a report from the NPD Group. After announcing that smartphone growth was up by 71% in the first half of the year, NPD is now also reporting that 30% of new iPhone 3G purchasers switched carries in order to add the iPhone to their pocket. 24% of the new buyers jumped from T-Mobile. 19 percent defected from Sprint (S) (via Newsfactor).

Blackberry App Store and GPhone Emulator
Rounding out the latest phone news: Blackberry specific website Crackberry.com reports, citing leaked information, that the upcoming Blackberry Storm touch powered phone will be supported by an open application store of its own. The Blackberry Application Center will aim to rival Apple’s App Store and Google’s (GOOG) Android Market when released.

And for gadget hounds hoping to get a glimpse of the G1 Android phone? T-Mobile has launched a website with a software emulator that allows an “online demo” of the new operating system. It’s available here.

Comments

[iJah420:]

Just to refresh ALL you NAYSAYERS memories.

From your FEARLESS LEADER STEVE and I'm not talking Jobs.

I am SO Glad I stuck with AAPL.

However, I am subjected to their CRAPWARE EVERY DAY because my superiors know SO MUCH MORE than I do. Just like their DUMB ASS FEARLESS MONKEY BOY LEADER!!!!

People who BASH APPLE I say to you #$%^&% YOU you are so short sighted and close minded it makes my stomach CHURN!!

I am a very advanced user xross multiple platforms so DO NOT come back with your canned reply that I'm some FANBOY!! I know what works and I tell you right now MSFT is in trouble. Good Luck with that Vista enterprise roll out it is just a gem of a roll out NOT!!!! What a JOKE!!! Just like the following quote.........

Ballmer: iPhone has 'no chance'
The iPhone has no hope of gaining a true foothold in the cellphone marketplace, according to Microsoft CEO Steve Ballmer. The company head told an interviewer at the USA Today that, as with computers, future control of the mobile handset business would primarily depend on software influence rather than hardware. Apple's insistence on attaching its code to a premium device could prevent it from getting any more than a small percentage of the world's cellphone user base, Ballmer predicted.

"Would I trade 96% of the market for 4% of the market? I want to have products that appeal to everybody," he said. "We'll get a chance to go through this [Apple versus Microsoft debate] again in phones and music players. There's no chance that the iPhone is going to get any significant market share. No chance. It's a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I'd prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get."

He also suggested that Apple might be creating too narrow a focus by stressing media playback on the iPhone instead of the possibilities of a general operating system such as Windows Mobile. The heavily-rumored Zune phone was again dismissed as impossible and against the company's mobile product philosophy.

"We wouldn't define our phone experience just by music. A phone is really a general purpose device," he summarized. "You want to make telephone calls, you want to get and receive messages, text, e-mail, whatever your preference is."

The iPod's success in the world of strictly entertainment-oriented handhelds was downplayed. Apple "got out early" with a good mix of media player hardware and software, according to Ballmer, but there was still an opportunity for the Zune line to have its own success. Its sales campaign would be "less edgy" and appeal to more buyers, he said. The remark appeared to ignore the company's existing campaigns, which have included Adult Swim and graffiti-themed limited runs of the player.

Microsoft currently holds a small but substantial portion of the cellphone OS business, which is currently dominated by variants on the open-source Symbian. The Zune's share has largely remained locked at roughly 9 percent of the US hard disk-based media player market since its introduction in November 2006.

Have NICE DAY!!!

iJah420 says DENY DENY DENY all you want.... the numbers AAPL will post will speak VOLUMES!

2008 Oct 07 09:18 AM

[Apple at 60$:]

SELL UR APPLE SHARES NOW BEFORE IT GOES DOWN TO 60 BEFORE EARNING

2008 Oct 07 10:30 AM

[iJah420:]

So very naive you are.....

DENY DENY DENY.... How many other tech Co. have 20B in CASH!.

and MSFT just keeps revolutionizing the industry with HOT! products like ZUNE!...

COME ON!

iJah420 says wait till you see the new laptops from AAPL. The best Dell can do is offer a candy coated colored shells that run an OS that tastes like $%&$ on the inside... Good Lord!

2008 Oct 07 10:51 AM

[chano:]

@ijah420 - admire your passion
@ A@60$-Fool! Buy buy buy. Never mind the rollercoaster due to Repube incompetence, AAPL is just about to switch on the turbo they've been spiining up.
The marvellous thing is that Apple has everything it needs to blitz the markets its in for at least a decade, likely much longer as others will have to play catch and, as MicroSpoof has shown that is well nigh impossible even with all the copiers running at max I mean of course the markets in - Computers, mobilie media and cellphones and who-knows-what-next? If the PC and shortsell zits don't see that, it has to be because they they choose the rectum view of the world. eeesh!

2008 Oct 07 11:06 AM

[iJah420:]

OH! AND NO DEBT!!!!

Apple has NO DEBT!

iJah420 says ;) like they owe nobody any $$$$. Big Big deal with the US where it is today. I suggest loading up on large qtys of RIM....Why? Because the symbol speaks for itself when the shareholders get the high hard RIM job from a Co. that bilked their customers.

To say RIM offers a quality products is just kidding themselves. Can't WAIT to see this BOLD in action. What a Joke.

And Gary Krakow's youtube video has been YANKED. It explained how pathetic the trackball is on those things. Shot after 6 months of use can't scroll left or right...just keep your heads in the sand that way you wont be able to SEE the 2nd tidal wave coming called the second coming of AAPL.

2008 Oct 07 11:10 AM

[erstwhile:]

Astounding. Fanbois bleating up AAPL. I wouldn't touch this stock for a while.

AAPL is going to be facing more and more competition in the Market. Ballmer is right, an iPod that can make calls has an appeal to a limited market. As more competent smartphones arrive (Android will spur a ton of interesting devices) the competition will increase. The non ATT carriers are greatly incentivized to break the iPhone's lock on the market.

Apple were there first with the Apple ][ and the iPhone could be another case of the SJ driven company painting itself into a corner while the market matures and moves forward.

It's called capitalism - have you heard of it?

Look AAPL is always a risky stock. Apple will be greatly affected by the storm in the economy, precisely because it is a premium product that carries a big mark up for it's industrial design. So if the US consumer's discretionary income is hit, AAPL sales will be hit. Since AAPL is propped up by people "hoping" it can run up again, it's generally a stock that is overvalued (much like it's producs), and therefore considerably volatile.

AAPL is down 40% over the last 12 months, MSFT is down less than 20%, the DJIA is down around 30%.

You can slag MSFT all you like, but as a company they are stronger and less exposed (whilst AAPL is attempting to morph into a retailer, and move away from solely being a hardware company, it's not there yet). They have a diverse customer base (business to consumer).

Beware AAPL.

2008 Oct 07 12:14 PM

[iJah420:]

AAPL is down 40% over the last 12 months, MSFT is down less than 20%, the DJIA is down around 30%.

AAPL is down due in part to FALSIFIED reports from the likes of iReport a division of CNN. This kind of callous reporting is just the tip of the iceberg when it comes to individuals envious of something as insanely great as AAPL and what it has created.

Instead of inventing something new and better they stoop to the level of half baked copies, slander and unethical business practices.

You know THE SYSTEM!!....quite frankly THE SYSTEM SUCKS AND IS TERRIBLY BROKEN. Capitalism!! you say....700B $$$ GOVERNMENT BAILOUT!!! YEAH RIGHT!!!! WHAT A CROCK!!! Just like to yellow journalists who are paid to bash AAPL.

If the MESSIAH Obahma gets in We can all kiss our Capitalistic USA BYE BYE!!!! Welcome to our new KING...

King Barack!!!

iJah420 says very sad indeed.

Apple will prove you all wrong in the next 5 years.... You know WHY?

because they Think Different. I'm done here.

2008 Oct 07 12:33 PM

[Murphy Mac:]

erstwhile said Apple is TRYING to morph into a retailer. Hello - they generate more revenue than any other retailer. How long have the others (Gap, Sony, Bose, J. Crew) been at this retail game? How many other PC makers have tried retail and failed spectacularly?

Apple is a tiny ball right now, but it's a snowball Mr. erstwhile. This blip will pass....

2008 Oct 07 12:43 PM

[Itsonlymoney:]

The markets perception of value relative to a stocks price is not the same thing as the underlying worth of any particular company. When these two are out of sync there is opportunity in both directions. Since AAPL does not chose to share their cash hoard with shareholders there is no disincentive to trading. Why are so many arguing with the market. If you are holding or buying for the long term quit complaining, or add to your positions when you think the crowd has it wrong. If you are trading and can profit from it, good luck. Right now cash is more desirable than stocks so the prices are falling. Good for us. It takes less cash to buy the same good companies.

2008 Oct 07 01:31 PM

[Vox Rationalis:]

Toni - still waiting for you to admit you don't know what "trailing PE" means.

seekingalpha.com/artic...

2008 Oct 07 03:39 PM

[brewer:]

erstwhile, that bit about Apple 'trying' to do retail is funny. Murphy has it right, Apple is king of retail. LJah420 is right about Apple, they are going to take at least 1/2 of Microsoft's bacon in the next few years. Not that Micrsoft's stock has done anything but pay dividends lately. Not that that is a bad thing, but you would think it would go up a FEW bucks in the past 10 years or so. If you are smart, sell MSFT and buy APPLE. If not, then just keep using windows and pretend you know what you are doing. The real techs have left that weak, weak OS behind.

2008 Oct 07 04:43 PM

[Sekar:]

People like Brewer and Toni try to trash anyone who is critical of Apple. Those like Brewer claim that "Keep in mind, the rotary dial phone is also a touch based device". Are these guys living in fantasy world? Look at where Apple stock is. In Jan 2008, I predicted the share price to drop to around $85-90, when there was a big hype about iPhones crossing 10 M mark soon. Yes, Apple indeed sold nearly 10 M as analyzed by Turley Muller of seekingalpha. Steve Jobs boldly predicted that Apple would sell 10 M iPhones in one year and he thought that consumers would queue up to buy these phones. In reality this did not happen, until the price was slashed after 45 days and a cheaper 3G version was introduced. To continue this momentum, Apple has to slash the prices to appease frugal consumers in other countries. Hey Brewer, I didn't know that rotary phone is also a touch based device - what a great discovery ??? Try to sell few Apple shares to Wall St. with your discovery. You can also stand in front of NYC 5th Avenue store to demonstrate that rotary phones are also touch based device.

2008 Oct 08 11:48 AM