Analyst: iPhone To Trounce Palm Pre In First Weekend Sales - InformationWeek

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6/18/2009
02:07 PM
Eric Ogren
Eric Ogren
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Analyst: iPhone To Trounce Palm Pre In First Weekend Sales

Last year, Apple and AT&T sold about one million iPhones the first weekend it became available for sale. This year, analysts predict half that much, but still believe it will easily surpass the Palm Pre's sales figures.Update: Line already forming in NYC!

Last year, Apple and AT&T sold about one million iPhones the first weekend it became available for sale. This year, analysts predict half that much, but still believe it will easily surpass the Palm Pre's sales figures.Update: Line already forming in NYC!The iPhone 3G went on sale at 8AM on Friday, July 11, 2008. Due the low(er) price, new customers flocked in droves and bought it at some point over the launch weekend. According to Apple, about one million people did so.

Several weeks ago, one of the most anticipated phones of 2009 -- the Palm Pre -- went on sale at Sprint stores and other retailers. Sprint claims the Pre broke all its previous one-day and three-day sales figures. It didn't say exactly how many it sold, but analysts pegged the number at somewhere between 50,000 and 100,000. That's a pretty wide range, and even 100,000 is only a tenth of the number of iPhone 3Gs sold last year.

Starting tomorrow, the Apple iPhone 3GS goes on sale at 7AM for those who pre-ordered (8AM for "regular" people). Piper Jaffray analyst Gene Munster is predicting that Apple and AT&T will sell about 500,000 iPhones over its first weekend of availability.

In a research note he issued today, Munster said, "Most customers will be able to purchase the new iPhone 3GS for $199 (the same price as the previous model). As such, the change in value proposition for the iPhone 3GS is not as meaningful as it was for the iPhone 3G, leading to less of a surge in units at launch. Moreover, the iPhone 3G was available in 21 countries at launch vs. the iPhone 3GS which will sell into 8 countries at launch (then over 70 more throughout the summer). These factors lead us to expect about half as many iPhone 3GS units at launch (500k) as Apple sold in the first weekend of iPhone 3G availability in 2008 (1m)."

I agree with Munster that Apple will certainly sell fewer iPhone 3GS. First, there aren't that many current iPhone 3G customers who qualify for the fully subsidized prices of $200 and $300 for the 16GB and 32GB models, respectively. I, for example, don't qualify for the upgrade and will have to pay $500 if I want the 32GB model. For anyone else in the same boat as me, that $500 price take will certainly give pause.

Despite the prospect of selling fewer devices than last year, Apple's iPhone 3GS will almost certainly show up the Palm Pre by a factor of at least five.

Update: - According to Engadget, there is already a line forming at the 5th Avenue Apple store in New York City. Given the extremely rainy weather, I'd call this a "dedicated" bunch of devotees.

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