Woods said that the company has "taken an aspirational device and delivered it an affordable price point. The volume will be extraordinary." He's referring to the fact that the second-generation iPhone will debut at $200 with a two-year contract, well below the price of its predecessor.
While Woods' estimate is on the high end of analysts' estimates, he's hardly alone in being bullish on the iPhone. Gene Munster from Piper Jaffray is predicting Apple will sell 45 million smartphones in 2009. He's assuming, though, that the iPhone will be introduced in China, and Apple will launch an even less expensive model early next year.
There's some evidence that these analysts aren't being overly optimistic. The European wireless carrier O2 has had 130,000 people say they are interested in getting an iPhone 3G after it debuts on June 11. Last year, when his telecom also let users indicate interest in the original iPhone before its launch, only 35,000 people did so.
A Cash Cow?
All these iPhones could be a significant source of revenue for Apple, even at the new lower cost.
Portelligent did an analysis of the cost of the parts that will go into this smartphone, and estimates it could be little as $100. That's well below the materials cost of the original iPhone: $170.
Making a profit off selling the iPhone 3G is important to Apple, as it won't get a share of user's monthly wireless service fees, as it did with the original iPhone.
Still, the company is looking for other ways to pull in revenue. It's new MobileMe service -- which will let users synchronize their emails, contacts, and calendars between their iPhone, Mac or Windows computer -- will cost $100 a year.