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iPhone said to have 15% US share in 2009

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.



By Electronista Staff
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Comments

  1. rytc

    Senior User

    Joined: Jan 2001

    0

    prepaid

    Peope on prepay expect to pay more for a decent phone than those on a subscription - that's part of the deal. The advantage is you choose how much you pay each month. Apple charging 600 for a smartphone is hardly out of line and the people who only want a $50 are not Apple's market anyway.

  1. WiseWeasel

    Junior Member

    Joined: Apr 1999

    +2

    BS

    15% of the entire US cell phone market sounds a bit ridiculous for a non-free phone. Are you sure they didn't say 15% of the US smartphone market? I hope for the sake of my Apple stock they're right, but the skeptic in me has to call BS on this one...

  1. testudo

    Forum Regular

    Joined: Aug 2001

    -3

    Re: BS

    Can't be 15%. They have Apple at 19 million in sales next year. According to the always correct wikipedia, there's some 3.3 billion cellphone subscriptions out there, and even taking some of those as dead or muliple, you're still less than 1% of the world population of cell phone owners.

  1. icewing

    Fresh-Faced Recruit

    Joined: May 2008

    +1

    more BS

    "...most customers are "unlikely to do the math" "

    Riiiigggghhhhtttt. Well, I did the math, and I can't afford enough lube to switch to ATT...

  1. cmoney

    Mac Enthusiast

    Joined: Sep 2000

    +1

    Re: BS

    Sounds plausible. Considering this link anyway: http://www.macrumors.com/2008/02/05/iphone-with-28-of-u-s-smartphone-marketshare-for-q4-2007/

    According to them, they already have over 15% marketshare of the US Smartphone market.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    +1

    Re: BS

    It might sound plausible, the the smartphone market is a whole lot smaller than the entire phone market (say 10% of it, more or less).

  1. Guest

    Fresh-Faced Recruit

    Joined: Nov 1999

    0

    by marketshare

    they mean "percentage of all cell phones sold during the year", not "percentage of all cell phones sold, ever".

  1. ender

    Junior Member

    Joined: Mar 1999

    +1

    No way

    The math just doesn't add up. Verizon has the largest market share (with the acquisition of Alltel). I don't know that exact market share numbers, but with Sprint, US Cellular, and others taking some of the market, let's put ATT at 40%. The means that for the iPhone to get 15% share of the entire US cell phone market, it would have to account for over 42% of ATT total cell phone sales.

    So nearly HALF of the phones ATT sells in 2009 would be iPhones? Very doubtful.

  1. ender

    Junior Member

    Joined: Mar 1999

    +1

    Math error

    Oops, I made a math error above. It wouldn't be over 42% of ATT sales. It would be over 37% of ATT sales needing to be iPhones. So well over a 1/3 of ATT sales. Still very doubtful.

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