3G iPhone Speculation Out of Control, says Pacific Crest

With less that a week to go until Steve Jobs takes center stage, some analysts are trying to throw a little cold water on the outrageous numbers being bandied about by Apple fans. Sizing the market for iPhones should be a relatively mundane exercise, but some people are clearly taking leave of their senses:

Pacific Crest’s Andy Hargreaves today asserts that the numbers have gotten out of hand. He points out in a research report this morning that the carriers that have announced deals with Apple have total subscribers of 669 million people, an increase of 520 million in the last month. That’s impressive: Global handset sales are expected to 1.27 billion this year, growing to 1.37 billion next year. But to state the obvious, not everyone wants a smartphone. “A substantial majority of these subscribers should not be considered potential iPhone purchasers,” he cautions. Hargreaves forecasts global smartphone sales at 61 million units this year, and 81.3 million next year; of that he sees Apple taking 17.2% share this year, and 18.8% next year. That comes to 10.5 million units in 2008, and 15.3 million in 2009.

That said, Hargreaves says current estimates could be driven higher by compelling corporate software applications for the phone; and he says carrier subsidies that lower the cost of the phone for customers would also boost demand. Another potential boost: carrier deals in China, Russia and Japan. Seeking Alpha

Of course, this is setting up to be a classic sell the news opportunity. The iPhone noise on the internet is likely to reach a crescendo by Monday, and the watching the price action in Apple, Inc. should prove to be quite entertaining.

It almost seems too easy, perhaps the stock will confound the bears who expect a sharp sell off following the news. While Apple fans are supremely confident, Wall Street is rattled, and the jitters are likely to spill over into the few hiding places longs have been able to find.

One thing cannot be denied: the battle for smartphone supremacy is setting up to be epic, and the Apple camp brings plenty of color to the drab canyons on Wall Street.

How Big Is the Potential iPhone Market?
Seeking Alpha
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