I do not buy this prediction on several counts. None of the analysts seem to take into consideration that the 2008Q3 numbers were artificially suppressed, which made the 2008Q4 numbers much better. Apple ran out of iPhones in mid-May 2008 and so the 0.717 million number is probably at least 1 million smaller than might be expected and the 2008Q4 numbers be like 1 million phones higher than expected.

By comparison the iPhone release in 2009 contributed significantly to the 2009Q3 numbers, which suggests that the 2009Q4 number might not be much better than the 2009Q3 numbers. If the numbers are the same as 2009Q3, Apple will not reach 20 million sales in FY2009. I might believe 19 million. In any case, if the 2009Q4 numbers match the 2009Q3 numbers, it will still represent approximately a 50 percent growth year-over-year for the sum of Q3 and Q4.

The second assumption to which I take exception is that Apple will start selling iPhones through Verizon. Verizon is still requiring cell phone manufacturers to act as suppliers and insisting that they are the retailer. That view was very apparent when they stated that phones sold through Verizon would work with their store and not the manufacturers. I do not believe that Apple would agree to either of these requirements. All of the negotiations that have been reported clearly indicated that Apple desires to sell the iPhone itself and to have the iPhone be identified as an Apple product rather than a cellular provider’s handset.

I suspect that Apple would prefer to see the cellular providers allowing the manufacturers to sell the phones and allowing the users to purchase contracts for cellular service from any provider whose network is certified to work with the handset. Unfortunately that situation will not arise unless someone forces the industry to engage in some realistic advertising that separates out the cost of the phone from the cost of the cellular service. So long as the industry is allowed to call the “down payment” on the phone the price of the phone and to hide the true cost in the contract, it will be impossible for the cell phone manufacturers to compete fairly. This tactic has been immensely successful, if you judge by the number of technical reporters who referred to the drop in the up front price of the iPhone as a “cheaper iPhone.”

Disclaimer: I am not privy to any insider information on how the industry works, however, I am somewhat knowledgeable about retail sales.