Why Apple's iPhone sales aren't really that RIMarkable

By Ian Betteridge

For anyone who's followed Apple's fortunes over the years, the transformation of the company has been remarkable. And that's not just a statement about its finances – it long ago shook off the "beleaguered" tag of the late 90's – but also describes the core of the company's business.

Ten years ago, it made computers. Now it's the iPod company, and with the incredible results it posted this week, it's probably fairer to call it "the iPhone company". In a year, phones have gone from almost nothing to providing 39% of its revenues. No one else has managed to make this transformation from computer company to consumer electronics business so successfully. But not quite so successful as some web sites would have you believe...

To get an idea of just how big the iPhone 3G launch was it's worth comparing this quarter with the previous one. In the quarter which ran from April to June, Apple sold only 717,000 iPhones, as demand dwindled in anticipation of the 3G model and as it ran its own stocks down. This quarter, the company came close to trebling its previous record for iPhone sales, when in the three months leading up to Christmas 2007 it sold an impressive-sounding 2.3 million phones.

By any standards, this is massive growth. But if you take a look at the circumstances which surround it, it's perhaps not as surprising as it appears at first.

The first thing to consider is coverage. Officially, the first-generation iPhone was available in only a handful of countries, primarily the US, UK, France and Germany. Apple launched the 3G model in 22 countries on the same day, and is expanding this to over 70. This means that the number of people who could potentially buy an iPhone has jumped from around 500 million to something in the region of 2.5 billion. With a jump in availability that high, you're always going to get a big increase in sales.Continued...