Apple is heading into a tough year. The company’s CEO Steve Jobs is going to be hard pressed to make his 10 million iPhone sales target in 2008. But even worse for Apple, many of the new media-phones aren’t showing up on AT&T subscriber lists which cuts deep into Apple/AT&T revenue sharing.

Apple sold 2.3 million iPhones in the final quarter of 2007. It sounds like a lot but the holiday season should have set a benchmark. If Apple keeps up that rate of sales through next year it’ll fall well short of its target.

To sell 10 million iPhones in 2008, Apple will have to sell 200,000 more iPhones every quarter this year than it did during the Christmas quarter of 2007.

Apple also reported it sold 3.7 million iPhones in 2007. AT&T, the exclusive iPhone network, said it activated less than two million iPhones.

They’re calling it "The case of The Missing iPhones" - but it’s no mystery.

Businessweek has sources that estimate some 1 million iPhones have been stripped down and unlocked. Unlocking your iPhone opens it to business with any GSM network provider you choose. It’s legal but against the wishes of Apple and AT&T.

These reports and a lackluster Macworld havn’t instilled confidence in Apple stock over the last month. Apple shares are down 34% in January, much further than the overall 13% drop in Nasdaq.

Apple has a tough road to climb with profits generated from iPhone likely to be lower than expected. iTunes dominance of online music is also waning. Competition in the online media market is going to be fierce in 2008.

Although one would-be competitor tripped on its own bootstraps, high powered online figures like Amazon.com and others selling DRM-free music will offer legitimate competition to Apple.

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This entry was posted on Wednesday, January 30th, 2008 at 12:21 pm and is filed under Portable. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.