Apple Claims iPhone 3G Outsold RIM BlackBerry Last Quarter

Appleā€™s Goal to Ship 10 Million Handsets in 2008 Achieved

by Anton Shilov
10/22/2008 | 09:06 PM

Apple has managed to achieve its goal of selling 10 million of its iPhone multimedia-enabled handsets several months earlier than it originally hoped. Moreover, thanks to adding new countries into the list or territories where iPhone devices are available, Apple has managed to outsell Research in Motion’s Blackberry smartphones in calendar Q3 2008, the company said.

Apple iPhone 3G More Popular than RIM BlackBerry – Apple


“We sold nearly 6.9 million iPhones during the September quarter, exceeding the 6.1 million units shipped over the entire lifetime of the first generation iPhone. And with more than two months to go in the calendar year, we have already surpassed our goal of 10 million iPhone sales in calendar 2008,” said Peter Oppenheimer, chief financial officer of Apple, during the most recent conference call with financial analysts.

The company set the goal of selling 10 million Apple iPhone cellular phones in calendar 2008 when it formally introduced its first handset in early 2007. According to Gartner market research firm, approximately 1.28 billion of mobile phones will be shipped this year, which means that Apple’s unit market share will remain under 1%. It should be kept in mind that smartphones represent a relatively tiny fraction of the whole market, hence, the iPhone will hardly ever get as popular as mainstream cell-phones.

Thanks to expansion of Apple iPhone 3G into 51 countries, Apple still managed to outsell RIM, which is the world’s second largest maker of smartphones and which has not entered tens of new markets during the most recent quarter.

“Apple beat RIM. In their most recent quarter, Research in Motion, or RIM, reported selling 6.1 million BlackBerry devices. Compared to our most recent quarter sales of 6.9 million iPhones, Apple outsold RIM last quarter and this is a milestone for us. RIM is a good company that makes good products and so it is surprising that after only 15 months in the market, we could outsell them in any quarter,” said Steve. Jobs, chief executive of Apple.

Apple – “The Third Largest Mobile Phone Supplier As Measured in Revenues”

Thanks to shipping loads of expensive iPhone devices in quantities, Apple pronounced itself the world’s third largest supplier of cellphones, as measured by revenues.

“As measured in revenues, not units, Apple has become the third largest mobile phone supplier. Let’s look at the ranking: Nokia is clearly number one at $12.7 billion, Samsung number two at $5.9, Apple is number three at $4.6 billion, Sony Ericsson is at number four at $4.2 billion. LG is the number five with $3.4 billion, Motorola, the number six, is at $3.2 billion and RIM, number seven, is at $2.1 billion,” Mr. Jobs explained.

It should be noted that in accordance with the subscription accounting treatment required by GAAP (generally accepted account policy), Apple recognizes revenue and cost of goods sold for iPhone and Apple TV over their economic lives. This means that if only actual hardware price the users pay for the iPhone when they pick it up from a store would have been considered, then Apple’s revenue would be $1.75 billion (assuming that an average selling price of a single iPhone 3G is $250).

Given that with the new iPhone 3G Apple entered tens of new markets, it is natural that sales of Apple iPhone skyrocketed to 6.9 million from less than a million in Q2 2008. As a result, Mr. Jobs warned that such strong sales may not be sustainable going forward.

“Both of these things, beating RIM in units and becoming the third largest mobile supplier in revenues are amazing feats, but part of this was the result of expanding into over 50 countries and there’s no guarantee that sustained sales will equal initial sales,” said CEO of Apple.

Apple Posts One of the Best Quarters in Its History

Apple has today announced financial results for its fiscal 2008 fourth quarter ended September 27, 2008. The company posted revenue of $7.9 billion and net quarterly profit of $1.14 billion, or $1.26 per diluted share. These results compare to revenue of $6.22 billion and net quarterly profit of $904 million, or $1.01 per diluted share, in the year-ago quarter. Gross margin was 34.7%, up from 33.6% in the year-ago quarter. International sales accounted for 41% of the quarter’s revenue.

“Apple just reported one of the best quarters in its history, with a spectacular performance by the iPhone – we sold more phones than RIM,” said Steve Jobs. “We don’t yet know how this economic downturn will affect Apple. But we’re armed with the strongest product line in our history, the most talented employees and the best customers in our industry. And $25 billion of cash safely in the bank with zero debt.”