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It’s Never Gonna Sell…

June 23rd, 2010

Apple just sold 3 million iPads in 80 days. It is estimated that, even on the lowest-priced model, Apple gets a bit over $200 in profit. If that’s the case, Apple just made over $600 million in less than three months on one product.

Not too shabby.

In the next few days, the iPhone 4 is coming out, and Apple makes maybe $300 a pop for each one of those. And Apple seems to estimate that for the first quarter, it will move an average of 3 million of those per month. Reviews are now out, and all rave, calling the iPhone 4 the best smartphone on the market (MossbergPogueUSATodayEngadget).

Hey, here’s a blast from the past:

“The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks. In terms of its impact on the industry, the iPhone is less relevant. […] Apple will sell a few to its fans, but the iPhone won’t make a long-term mark on the industry.”

–Matthew Lynn, Bloomberg, Jan 13, 2007

He wasn’t the only one. Ah, it brings back the memories from the days when people were predicting Apple’s imminent demise every other week, or so it seemed. Here’s a prognostication from May 2003–this after the iPod was a success and the Mac market share was on the rise:

“Is Apple doomed to fail? If I had to bet on it I would say they absolutely are. No one at Apple has the guts to correct the mistakes of Steve Jobs. Apple is a toy for Steve, and a way to massage his ego. Right now no PC company makes hardware that looks as good as Macs, and no OS looks as good as OS X. That can, and will, change very soon. The PC world has gotten the message, and they’ll soon drive the final nail into the Apple coffin.”

–John Manzione, MacNet, May 08, 2003

Gee whiz, kinda sounds like what they’re saying about iPads now, doesn’t it? It’s cool, but just wait, all those other manufacturers are coming out with much better stuff real soon!

And from just a few days later:

“Many close observers of the legendary Silicon Valley company believe shareholders shouldn’t be selling the stock. They should be buying it, they say, in order to press the 48-year-old Jobs to split Apple into two separate companies built around its hardware and software lines of businesses, or get new management that will. ‘Given what their valuation currently is, I think this is something they will eventually have to do,’ argues Rob Enderle, a research fellow at Giga, a research unit of Santa Clara, Calif.-based Forrester Research Inc. ‘They have to dig themselves out of the going-out-of-business cycle they are currently in.’”

–Joshua Jaffe , TheDeal.com, May 12, 2003

Needless to say, Apple didn’t split into pieces.

On May 9, 2003, Apple’s stock price was at $9, up from about $7 a week before. But let’s say you bought it at $9 at that time, and invested $10,000. Taking into account the stock split in 2005, you’d have over $600,000 in Apple stock right now.

Me, I waited way too long. I started thinking about it back in ’03, but chickened out, and have seen what I got only triple in value. Coulda shoulda woulda.

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  1. Tim
    June 23rd, 2010 at 14:59 | #1

    Apple sold 700,000 Iphones in Korea in roughly 6 months, or Roughly 25,000 a week, in Korea. On the subway it is easily the most common single phone you see. Using your numbers, that’s $200,000,000 profit pulled out of Korea in 6 roughly 6 month time frame. They might take a Billion out of Korea by the end of the year with the new Ipad and Iphone.

    A billion here, a billion there, it starts to add up.

    The Iphone could go out of fashion here if Samseung pulls up with something flashier that does more. But that’s only about a 25% possibility. Apple has the big lead in applications and cache and there is not cost penalty – yet.

    Touche, Apple.

  2. Troy
    June 23rd, 2010 at 19:24 | #2

    Watching the WWDC videos this year was very painful to me.

    I saw a couple of Apple coworkers from my time there. Apple was at $100 when I joined, and I didn’t ask for options since I thought everything was overpriced during the dotcom boom. But they gave me 1000 options anyway, which became 2000 @ $50 with the first split and 4000 @ $25 with the 2nd (assuming I hadn’t taken the option re-pricing deal from 2003). Plus Apple has a program where you can buy 10% of your salary in stock at 15% off of the low for the period, that would have been good for another $1M worth of stock.

    All told if I had stayed at Apple I’d have 20,000 shares or so now. Le sigh. All because of that damn iPod! Whocouldaknown?

  3. Troy
    June 23rd, 2010 at 19:27 | #3

    Samseung pulls up with something flashier that does more

    Problem is Samsung is reliant on second-parties for their OS.

    Samsung can copy but Apple owns the space and all others are competing for scraps with me-too offerings and a fragmented platform (either Windows 7 or Android).

    The iPhone 4 is an amazing tour-de-force of technology. The only thing the platform needs now is USB 3.

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