In a recent analyst call he showed some numbers that don’t quite convince me. I’m told he’s very worried about that.
The last three columns are estimates, of course, although he must have a pretty good idea where 2009 is going to land.
And it is the estimates I have a problem with.
Compare the iPod (blue) evolution with the iPhone’s (red). True, they have taken the world by storm this year, as they did in 2005 when they trebled iPod sales year-on-year.
But the iPod had no real competition, and still doesn’t, unlike the iPhone: the enemy there was slow-moving Microsoft who was pursuing the Zune as a money-losing hobby, here you have Nokia and Palm and everybody else and his brother – these people are fighting for their life. The iPod can be used everywhere right out of the box, no need for carriers agreements or anything, unlike the iPhone. These favourable conditions notwithstanding, iPod revenue growth petered out after 2005 and will likely turn negative this year.
Yet Oppenheimer is projecting doubling iPhone sales again in 2010 and at least another 50% growth in 2011. That to me is smoking (bad quality) crack.
Also, I am not sure I really believe the flat gross margin: I thought iPhones contribute less GM than, say, Mac computers: with their relative weight increasing so dramatically, I’d be curious to understand how you can realistically expect flat GM%. Not to mention a (slowly) improving Operating Margin, but I guess every chart like this must have a small positive derivative on OM%, lest be bashed by analysts…