So why is Apple 'confident'?
AT&T said Thursday that it ended 2007 with about 2 million iPhone customers total.
The Financial Times reports that iPhone sales in the U.K. fell below expectations in the previous quarter -- Apple reportedly sold 190,000 iPhones in the U.K. since its launch Nov. 9, which is less than the carrier's target of 200,000 and Gartner's estimate of 350,000 to 400,000. Overall European sales are similarly below projections.
Apple reportedly lowered projected shipments of iPhones for the current quarter (from January through March) from 2 million iPhones to between 1 million and 1.2 million (based on information from Taiwanese iPhone component suppliers).
Here's the most interesting bit: Given all this data pointing to high inventory, lowered shipments and "disappointing" sales, why did Apple's CFO Peter Oppenheimer say Tuesday that Apple "felt confident" about reaching its goal of 10 million iPhones by the end of 2008?
Apple would need to sell 200% more iPhones than they already have in order to reach this goal. Either Apple can't wait to "disappoint" Wall Street again, or the company's got one of three things up their sleeve: New markets, new prices or new iPhones.
At this point, I don't think new markets can get them anywhere near 10 million by the end of the year. They've already hit the biggest potential markets. Talks with Chinese carriers haven't really started. And I doubt China would provide a huge market for the iPhone anyway. The iPhone is too expensive for China and, besides, they've already got a bunch of iPhone counterfeit clones for Apple to compete with.
I also don't think new pricing will do the trick, although I am willing to predict that Apple will drop iPhone pricing this year. The cheapskate holdouts aren't going to out-buy the rabid Apple fans and gadget freaks who already own iPhones.
The most likely scenario is that Apple will unveil a new iPhone this summer, or fall at the latest.
This is interesting because to date we have no way to estimate how often Apple plans to refresh the iPhone line with new versions. The iPod nano is the only Apple player to be refreshed every year like clockwork. The other models vary from 20 month cycles for the Shuffle to the sub-year cycles of the Classic.
A new iPhone is likely to offer goodies like 3G, GPS, more software flexibility and fixes for the many small annoyances that some current users complain about.
The only way Apple could possibly feel "confident" of reaching 10 million units by the end of 2008 is if the company were to sell more iPhones during next year's holiday season than they did during this year's. And the only way to do that is to sell to existing users. And the only way to do that is to come out with a new iPhone.
And that's good news.