New business model paves way for Apple to move 23 million iPhone 3G handsets in 12 months

By now it’s obvious that Apple is planning to hit the global smartphone market hard with the next-generation iPhone 3G priced at just $199 for the 8GB base-model. And, we already know that the iPhone 3G will be selling like Botox treatments in Beverly Hills.

But, just how many iPhone 3G units will Apple sell through its first year of sales? Pacific Crest’s Andy Hargreaves likens Apple’s new iPhone 3G pricing structure to past price-cuts on the iPod and Sony PSP handheld gaming device. Both products saw massive increases in sales volume once the devices broke below that almost-magical $200 price barrier.

iPod sales chart

As such, the iPhone 3G’s $199 price-point could help Apple to boost handset sales to levels several times greater than we saw with the original iPhone. In comparison, Apple saw their yearly iPods sales volume grow from 8.3 million units to 32 million when they lowered the price-tag to just south of $200. If that same trend holds true for the iPhone, Apple could see iPhone sales increase from 6 million to 23 million units over a 12 month sales cycle.

Of course, the numbers are just projections and they don’t even consider the effect of heavily subsidized (and even free) iPhone 3G offers from carriers outside the US. With O2 offering the 8GB and 16GB iPhone 3G variants for prices ranging from free to £159, Apple could see millions of iPhone 3G handsets sold in the UK alone – adding to Apple’s worldwide sales figures.

And, given Google’s Android delays, Apple will likely be sitting pretty on their pile of iPhone 3G cash. Just how pretty they’ll be sitting remains to be seen.

[Via: Apple Insider]

  • Mark

    Of course the numbers don’t take into account that neither the iPod or PSP has a $70 per month two year subscription charge attached to them.

    Not a relevant comparison methinks.

  • fenris

    Fast forward to 2010 – “the iPhone sold twice as much in december compared to august (4 units vs. 2) – will this be the breakthrough EVERYONE has been waiting for? We have the definitive and objective analysis, right here on LapWorld – no need to think, just read it and believe it!”.

  • xpr

    There are 12 million people willing to buy this crap??

    Probably in America because in Europe where I am there is a compete negative reaction regarding iPhone 3G.

  • Will Park
  • Raidium

    lol. He replies with nothing but a link. And yet, he gets the point across.

  • Mr-X

    “Apple could see millions of iPhone 3G handsets sold in the UK alone”

    I wish you saw the way I laughed at that. £159 on an 18 month contract is what I would expect to pay for a brand new, luxury 8XXX series Nokia device on launch day, not a locked down device like the iPhone.

    Sorry to tell you, Will, but when the N95 8GB/N82/Viewty/Samsung Soul/K850i are all free on 12 month(cheap) contracts and the iPhone is only free on 18 month(expensive) plans, I don’t see the iPhone having success like it does in your mind.

    There is still hope, actually! Apple could run adverts on TV every 15 minutes like they did with the first iPhone!

    Oh, that didn’t work too well the first time either…

  • Will Park

    I thought it would be most effective, Raidium :)

    Mr-X. I’m glad you had a good laugh – we all need some more laughter in our lives. But, while I do see the iPhone being successful in the UK, it’s not just my point of view. The article I referenced above is based on numbers from O2.

    Time will tell

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