Report: iPhone to Account for Half of Apple Revenue By 2011

The iPhone, initially a sideline to Apple’s main Mac sales, could account for up to half of the Cupertino, Calif. firm’s revenue by 2011, according to an analyst. The company is on track to sell 45 to 50 million handsets next year, more than double the 20.7 million iPhones sold in fiscal 2009.

Toni Sacconaghi, analyst with Bernstein Research, in a note to investors, said the iPhone could become 45 percent to 50 percent of Apple’s revenue, up from 30 percent in 2009. The analyst forecasts iPhone sales will reach 40 million to 50 million units in fiscal 2011, a dramatic increase from 20.7 million sold in 2009. The company should report sales of 8.7 million for the first fiscal quarter of 2010, he adds.

Apple Chief Operating Officer Tim Cook recently told analysts he sees plenty of opportunity for growing the iPhone platform. “The platform (is getting) larger and larger, the ecosystem better and better, and there are more and more apps that people can’t live without,” he said.

Earlier this week, we reported on news Apple may be looking to use the iPhone OS in more devices, including the MacBook, Mac mini and Apple TV. The Cupertino, Calif. company is seeking an Engineering Manager to oversee including the “iPhone OS on new platforms.”

Sacconaghi also predicted Apple will sell 2.2 million iPads in 2010 and 6.8 percent for 2011. The figure is on par with a number of analyst forecasts. After an initial burst of exuberance, some analysts have trimmed their sales expectations for the new tablet device, citing a ‘reassessment‘ of Apple’s latest consumer gadget.

Earlier this month, Needham announced a forecast of 2 million tablet sales a year after it was introduced, down from an earlier prediction of 4 million. The analyst gave the iPad a cautious thumbs-up, telling investors it was “cautiously optimistic” of the device’s early success. Piper Jaffray analyst Gene Munster also declared “measured enthusiasm” for the iPad, expecting 4 million in first-year sales and by 2011 accounting for 7.5 percent of Apple revenue.

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[Via Barron's]

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Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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patrick f
Interesting. And the reason for this is that the price of an iPhone is very competitive, a great value, compared to other phones out there.
Macs are not competitive and their market, as you can see, is not growing nowhere as fast as the iPhone. Because people do not see the value.
I’ve been a Mac user for 20 years. I just switched to Windows 7 and I like it. I got a cheaper laptop that *fits my needs*. My daughter’s MacBook is failing, and although she is a long-time Mac fanatic, she likes Windows 7 and will probably get a cheap laptop with Windows 7 that will *fit her needs.*
I never thought my daughter and I would say that Windows 7 is as good as OS X.
Some ignorant Mac zealot is probably going to post and say that Windows is crap and Macs are a better value. Fine. Live with your blinders on.
P
patrick f
Oh yeah, my point is that, as we all know, Apple could gain a lot of Mac share if they simply came out with a computer around $700.
LOTS of people in my family love OS X. They love the Mac. However, they don’t have $1000 to plunk down on the cheapest MacBook. They are all using Windows laptops /netbooks that they could afford.
Apple/Steve Jobs doesn’t care about this class of people who don’t have the disposable income to afford a Mac nor is it not important enough for them to drop $1000 on a computer. Apple should come out and say that: “We don’t care about this market.” It hovers in the realm of snobbery.
Again, I’m a LONG-TIME Mac user. Or was.
My basic point is that Apple should ship a $700 (or $650?) laptop.
Don’t get me started on the iPad!!! I like it, I will probably get one, my daughters will probably buy their own, but they are NOT MacBooks/laptops. They are what they are.
See, I’m already anticipating attacks from the fanatics who will rationalize everything Steve Jobs says.
Apple: You know it. Your iPhone is an awesome value. I LOVE it. My daughters LOVE it. It kicks butt. Maybe you could do the same for the MacBook? Make something that poorer people can buy? The working class? Ones who surf the web and do email and some games and would think of spending less than 1k on a computer? Is this too hard for you? Can you simply say you don’t care about these people? Zealots: Can you defend Apple on this point? Do you know of any working class people who can’t afford a lot for a computer? Can you tell me my $350 computer is garbage? Please, tell me that. Okay? Offend some more PC people. How is that? You are better than us, right?
Jim D
That’s basically correct Patrick. Apple’s in the business to make money, so they go after the market segment with the highest margins, the high-end. Since there are plenty of offerings in the mid to low end of the market from other manufacturers and you’re happy with your selection, what’s the problem? Apple doesn’t want to fight it out in the low-margin, high-volume segment. That’s their right and it’s been working out very well for them. You may as well complain that BMW and Audi don’t make economy cars.
NickBob
Ok, so Windows 7 has an interface that doesn’t suck. Will the equipment last as long before it needs replacement for one reason or another? Will a problem arise in the OS that requires tech support, and if so does that support system work smoothly? I’ve read that 7 addresses the security issues well, but the proof is as ever in the pudding, they have a reputation to overcome, I’d be leery until a new track record has been established. I’ve been a Mac guy since 1990 too, and there are many thongs I’m ignorant about, but there’s more to a Mac than it’s useability. Windows 3 was “good enough” for most folks in the dark days, but that didn’t mean it was all that good. Computers are systems, and having used Windows devices at work I’m in no hurry to save a few hundred bucks in exchange for more frequent equipment refreshments and hours of troubles with balky machines. My Macs aren’t perfect either, but there’s no doubt which is the better value over even the medium run.
NickBob
Patrick, put the iPad back on the table. All six models are under your $1000 price request, one is at half that, they have the iPhone UI you LOVE, and they do all the functions you list as needs- email, surfing, and a lot more besides. I’d wager that they do everything your $300 netbook does, and will do them well for a lot longer before it’s time to replace it. Maybe the cover charge is a little higher, but they refill the drinks for free, the food is cheaper and less fattening, and when you walk away from the table you’ll have spent more on the Windows unit than you would have for a Mac. That’s not snobbery, it’s rationality. Total cost of ownership and satisfaction with product are Apple strengths, and that’s not an accident.
http://www.cyclelogicpress.com Neil Anderson
That’s a lot of revenue. When do you think Apple will have enough cash to buy Microsoft?
CaryMG
What NickBob said.