A scary thought for Apple (AAPL) investors, courtesy of Bernstein analyst Toni Sacconaghi: Apple's Steve Jobs may miss his iPhone sales prediction of 10 million units in 2008.
Barron's Eric Savitz summarizes a transcript from a recent Bernstein conference call. Key stats: During the busy December quarter, Apple sold about 180,000 iPhones per week. Annualized, that's 9.3 million phones -- a run-rate that, with no growth, would put 2008 below Jobs' (conservative) public goal. Taking "particularly disappointing" European sales and seasonality into consideration, Sacconaghi projects sales of 7.9 million iPhones for calendar 2008 -- more than 20% below Jobs' goal.
We've been iPhone skeptics in the past, but in this case we think that Sacconaghi is being too pessimistic -- if anything, we think that Apple will be able to boost its December run rate during the course of the year. How? Some combination of the following:
Sell the iPhone in more countries. An Asia rollout, for instance, is already in the works.
Introduce new phones that run on a faster, "3G" wireless Internet service. Again, already planned.
A scaled-down "iPhone nano" with a price point to match, aimed at a broader audience.
Price cuts on current iPhones. (This has worked in the past.)
New software features, like support for third-party apps, that will make the phones more attractive to on-the-fence buyers. This was supposed to be happening this month, but BusinessWeek reports this could be delayed a few weeks.
Sacconaghi expects iPhone revenue to make up a puny 6% of Apple's fiscal 2008 sales, but almost 25% of the company's revenue in fiscal 2012. And he sees iPhones accounting for half of Apple's sales growth in the next four years, and as much as 80% of its profit growth. But we're also skeptical of that claim -- we think analysts continue to underestimate the growth and potential of Apple's core Mac line.