Analysts: iPhone 4 Should Bring Apple More Sales

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iPhone_4

Despite the leaks and purported advance photos of Apple’s new iPhone 4, analysts found enough in Monday’s presentation to tell investors the new handset likely means greater profits for the Cupertino, Calif. firm. High profile analyst Gene Munster Tuesday declared the iPhone 4 “significantly more advanced than the next best alternative.”

By including features such as videochat normally found elsewhere, such as computers, “the iPhone is taking unit and dollar share from other device categories,” Munster wrote. The new iPhone means Apple likely could beat Wall Street’s expectations for 8.7 million devices sold this quarter, the Piper Jaffray analyst said.


Because the iPhone 4 includes many improvements over the previous version, more owners will likely upgrade from their current iPhone 3GS. AT&T, the exclusive U.S. iPhone carrier, announced it will reduce the price for early upgrades to the new handset. It will cost $199 to upgrade to the 16GB iPhone 4 or $299 for the 32GB model before December 31. Apple CEO Steve Jobs described the upgrade pricing as “generous.”

Yair Reiner of Oppenheimer said the iPhone 4 “catapults the smartphone category forward along every axis of relevance to consumers: OS sophistication, speed, battery life, display resolution, video connectivity and camera quality.” Although Apple’s competitors, such as the HTC Incredible, may be an improvement over previous attempts, “the iPhone 4 suggests the stronger competition has sparked an almost fierce level of innovation at Apple,” Reiner told investors.

The new 5-megapixel camera able to create 720p video is “orders of magnitude more sophisticated than anything previously attempted in a smartphone,” Reiner said, citing checks with suppliers.

Reiner also pointed to Apple’s decision to fast-track global shipments of the new iPhone. After a June 24 debut in the U.S., U.K., France, Germany and Japan, by September a full 87 countries will get their hands the device. The analyst raised his third-quarter revenue estimate to $14.8 billion, up from $13.6 billion.

Kaufman Bros. analyst Shaw Wu told investors both the iPhone’s new size and features will be a “powerful catalyst” for increased sales. Like Munster, Wu pointed to the FaceTime video chat as a feature that would catch consumer attention. The inclusion of a gyroscope could create “a new generation of software, particularly gaming, featuring six-axis motion control.”

Wu conservatively estimates Apple will sell 8.05 million iPhones for June.

J.P. Morgan’s Mark Moskowitz said the iPhone 4 will be viewed as “the must-have device for users seeking advanced wireless handset connectivity solutions” and will keep Apple in the smartphone vanguard. The iPhone 4 “stands to increase adoption rates by new customers and also accelerate rates from existing customers.” Although some consumers may be disappointed that Apple did not unveil a lower-priced iPhone, the App Store will sell the iPhone, not the price, according to the analyst.

Robert Cihra, analyst with Caris & Company, said what was important about Monday’s announcement was what was not said. The question of Verizon getting the iPhone is not if, but when. By not announcing a deal, it allows interest to continue to build, a factor the analyst describes as a “back-pocket catalyst” for Apple.

Like the others, Cihra raised his sales estimates. He expects Apple will sell 8.7 million iPhones for the June quarter, up from 7.7 million. With 41 million iPhones sold during calendar 2010, Apple has 17 percent of the smartphone market and much room to grow, he said.

Apple could also sell 11 million iPads for calendar 2010, almost double the 6 million Cihra previously projected.

What’s in a name? For RBC analyst Mike Abramsky it means war. The analyst called Apple’s decision to rename the iPhone OS “iOS” a signal the Cupertino, Calif. company will continue its quest for “dominating personal computing.” The new name helps the company bring “simplicity, user experience, iTunes integration, developer momentum and cross-platform across all future Apple mobile devices,” Abramsky said. The analyst expects Apple will ship 100 million iOS devices in June, “gaining scale as smartphones/iPads outsell PCs.”

An estimated 18 million to 20 million 2G and 3G owners could upgrade with 50 percent of survey respondents saying they were “likely to upgrade.” Such numbers could result in between 9 million and 10 million in iPhone 4 sales from upgrades alone.

Broadpoint AmTech analyst Brian Marshall also weighed-in on the impact of the new iPhone. Although the new produce produced no real “material surprises,” Apple’s CEO Steve Jobs left the analyst “thoroughly impressed” and with greater confidence in his existing projections. Apple could sell 8.8 million iPhones for the June quarter, with 40 million for calendar 2010, he wrote.

[via AppleInsider]

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