Lowering the short-term expectationsNo doubt, the early part of this trajectory may be far less explosive than the iPhone hype may have suggested. Unlike many past Apple products, there is no multi-week wait for shoppers to get their hands on an iPhone: From Apple's online store, the iPhones can be at your door in one to two days, with free shipping, no less. The company says it plans to sell its one-millionth iPhone by the time its fourth quarter ends, on Sept. 30 (the iPod, by comparison, took seven quarters to reach that level). And rather than raise its long-term guidance, Apple stuck by its goal to sell 10 million iPhones in fiscal 2008.
One bit of anecdotal evidence: The iPhone has dropped from number one on the top sellers list on Apple's Web site to number five, behind items such as the iPod nano and iTunes gift cards. "We're past the initial bubble (of sales to Mac fans and early adopters), and back in the building-the-business phase," says Munster.
Certainly, that is the message Apple seems to be trying to send with its conservative guidance for the September quarter. While the company blew away consensus earnings per share targets of US$0.66 this quarter by delivering US$0.92 earnings per share, it says it will only be able to deliver US$0.65 in the current quarter, due to an expected increase in component prices, back-to-school promotions, and relatively mediocre revenue growth of around 19 percent. But given the roll the company has been on, most analysts do not put much faith in such numbers. "The guidance is really crummy, but I don't know that it even matters," says American Technology Research analyst Shaw Wu. "It was an awesome quarter."
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