Apple Inc has sold 4 million iPhones exactly 200 days after launching the device. Speaking at a Macworld conference, the Apple chief executive, Steve Jobs, said the figure represented an average of 20,000 iPhones sold per day. Jobs also said the iPhone has now become the second most popular smartphone handset in the United States, with a 19.5% market share, and is second only to Research in Motions BlackBerry devices. Apple launched the iPhone in the United States on 29 June 2007, and sold close to 1.4 million units in just three months. The company subsequently launched the device in Europe, initially in Germany and the United Kingdom on 19 September 2007, and on 29 November 2007 in France.

Meanwhile, Apple has unveiled new features for the iPhone for 2008, conspicuously avoiding any suggestion of a 3G version for the year. The company said it will begin to offer movie rentals via the iTunes retail portal, and will tweak the phones software to enable it support the service. Apple added that it will add maps with location awareness, based on the service being developed with Google and Skyhook Wireless. Also, the company is upgrading the iPhone software to enable users to send SMS messages to multiple recipients and customise the front page of the browser. Jobs further confirmed that the thirdparty development kit, expected to enable external software programmers to write software that will fit into the iPhone, is still on track to be launched in February.

Outlook and Implications

So Far, So Good: Hitting the 4millionhandsetshipment mark is a big achievement for Apple and cements its position as a player in the global mobile handset market. As expected, most of the sales figures would have derived from the United States, where the combination of frenzied hype and an abundance of loyal Apple fans have helped the device to record impressive sales figures. Europe has proved a tougher market to crack, and the iPhones lack of 3G and Apples revenuesharing methods have undermined interest in the device. Orange France has said it sold 70,000 units by yearend 2007, although French press reports suggest the iPhone did not give a markedly significant advantage to Orange over its rivals. In Germany, TMobile is still cagey about its iPhone sales figures after fending off a legal challenge from Vodafone. O2 in the United Kingdom has equally been cagey, especially after speculation in the U.K. media suggested the company did not meet its iPhone shipment targets. Crucially, given that European laws have watered down Apple and its partners stranglehold on the iPhone value chain, the device is now widely on sale on the internet, removing the expectancy that has helped to whip up further frenzy. As such, expected partnerships in other countries, such as Australia, China, Italy and Spain, have so far not materialised, suggesting a tougher future for the iPhone in 2008. As the novelty of the iPhone wears off, Global Insight believes Apple will have to reinvent the device in order to avoid it becoming little more than media hype.

Jobs Keeps the Market Waiting: Apples refusal to suggest a timetable for the 3G version of the iPhone is characteristically in line with the companys strategy of keeping the market expectant. No doubt Apple is developing a 3G version, but would rather use the announcement of such a version to rekindle interest in the device. The company is also branching out into other services, and the proposed movie rental service is capable of crushing the barriers to video services on mobile phones, and opening up an entirely new revenue line for the company. Given that movie downloads and sundry services cannot continue to rely on EDGE when much faster HSDPA networks are available, the absence of a 3G iPhone may dampen anxiety for the new services, and further make a 3G iPhone a necessity more than a novelty.

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