Apple Won't Sell 10 Million iPhones in '08, Says Analyst

Toni Sacconaghi -- the analyst who caused a brief stir by speculating that user-demand for the iPhone was waning, and that 660,000 of the devices were gathering dust in various back-room warehouses -- has another ominous prediction: Steve Jobs won't hit his magic 10 million iPhone mark in 2008.

Once again, the Bernstein Research analyst uses some shady metrics mixed with a bit of guesswork, and concludes that Apple will likely sell only 8 million iPhones by the end of 2008.

Sacconaghi's method for coming to this number is interesting. And by interesting, I mean completely based on whimsy. He basically takes the 180,000 per week average in iPhone sales that Apple saw during the holidays and uses it as a kind of fixed best case rate going forward (completely disregarding along the way the impact of new international iPhone introductions, the SDK, second-generation iPhones and future price cuts). Bam, 8 million iPhones in 2008. What, you wanted something more precise?

MarketWatch has a few other juicy quotes from Sacconaghi's latest research note:

Apple's goal of selling 10 million iPhones this year is optimistic, particularly if Apple insists on carrier revenue sharing without significant price cuts or new model introductions.

EPICENTER recently examined the potential impact of talks between Apple and China Mobile breaking down last month. And without a doubt, Apple lost a lot of potential sales there. But that's really the only (semi-) concrete example of Apple hurting its iPhone sales prospects.

I have no idea where Sacconaghi gets his other two "ifs." Indeed, price-cuts are almost a certainty going forward -- especially given that the iPhone generates gross margins of 60 percent by most estimates. Oh, and AT&T has already admitted that a new (3-G) model will be out sometime this year, another factor that could bump iPhone sales significantly.

While Sacconaghi got hung up on the 900,000 AT&T says it activated during the fourth quarter and comparing that number to the 4
million iPhones Apple says it has sold through mid-January, there's still no overwhelming evidence that sales are dropping. In fact, if we use that numbers Apple has released, we find that iPhone sales more than doubled from the third quarter to the fourth quarter of 2007. If things keep going that way, 10 million in iPhones sales could end up being a very low-end estimate.