updated 01:55 pm EDT, Tue July 1, 2008
Bernstein on iPhone Share
iPhones have the potential to take almost a sixth of the entire US cellphone subscription market by the end of next year, according to a new report by Bernstein analyst Toni Sacconaghi. He estimates that the up-front price cut on the phone and its new features will potentially give Apple as much as 15 percent of all US postpaid (traditional subscription) business during calendar 2009. The higher service fees may affect what the phone designer can do to change its pricing, but most customers are "unlikely to do the math" that would deter them from picking up what is superficially a less expensive phone, the researcher says.
The estimate also has Apple claiming up to six percent of subscription users worldwide and that the California company is now estimated to ship 8.5 million iPhones between July 11th and the end of 2008, with a predicted 19.5 million shipped in 2009.
Subscription marketshare won't matter as much outside of the US, Sacconaghi warns. While subscriptions are common in North America and a few other countries, about 70 percent of the iPhone's potential market prefers pay-as-you-go (prepaid) phones. Apple's willingness to charge $600 or more for a prepaid iPhone is feared to potentially scare away customers who are both used to lower-cost devices and who have accounted for less than a quarter of all smartphone sales in the past. About 8 million (41 percent) of the predicted iPhone shipments next year are believed to be headed to prepaid customers.
The report follows official word from some Apple competitors that are currently struggling in the marketplace. Sony Ericsson has recently warned that it would ship less than expected during the spring as it loses share in the mid-range and high-end markets, while Palm has traded income for marketshare by selling its $99 Centro, which let it sell nearly one million phones in the past three months but which led to losing $43.4 million in the same period.
BlackBerry designer Research in Motion has also said it would increase spending in the coming months in a move widely thought to be a marketshare grab as it launches the BlackBerry Bold and the upcoming, touchscreen BlackBerry Thunder in a bid to corner the home user's smartphone market before Apple gains a larger stake.