Saying that price is the "biggest barrier" to the iPhone growing in popularity, a financial analyst predicts lower-priced iPhones in the model's expected refresh this June. Morgan Stanley analyst Katy Huberty also said that the new model will feature new technology, including what is vaguely referred to as "gesture-based functionality," and that this could propel Apple stock to as much as $435 per share (it is selling at $202 as of this writing). In a separate report, a different analyst predicted that half of Apple's revenue in 2010 would come from iPhone sales.
Apple's pattern has always been to drop the price of existing models whenever they upgrade the line. Last year, for example, the price of the iPhone 3G dropped to $99 in the US when the 3GS came out, featuring video recording, a compass, line-speed encryption, voice control, etc. In her report to clients today which was revealed by the Fortune Brainstorm Tech blog on CNNMoney
, Huberty released the completely unsurprising resuts of a survey that most people hesitated buying an iPhone because of its price, especially where there is no carrier subsidy. She claimed that Apple could get up to 10% of the mobile phone market worldwide by dropping what is called the Total Cost of Ownership (TCO) of the phone, which would include things like initial purchase price, wireless plan and repair. Huberty also told her clients that she anticipates Apple to sell 6 million iPads this year, much higher than Wall Street's consensus of 3 to 4 million.
Separately, Toni Sacconaghi, an analyst with Bernstein Research, in a note to investors reported by the Barron's Tech Trader Daily blog
, said that Apple is on track to sell 45 to 50 million iPhones this year, which would be more than double the 20.7 million iPhones sold last year. This would bring in 45 to 50% of Apple’s total revenue, up from 30% in 2009. Sacconaghi also predicted that Apple will sell 2.2 million iPads in 2010 and 6.8 million the following year.
Even by the lowest estimates, Apple is poised to make a wad of money in the coming couple of years. The company is already sitting on a cash pile of about $25 billion US, and sources present at the Apple shareholder meeting this week
reported that Steve Jobs said he doesn't intend to use the money to buy back stock or pay dividends to investors. Instead, according to the mercurial CEO, the cash will be used for "big, bold moves" such as acquisitions of new technology. “We are a large enough business now that, in order to really move the needle, we have to be thinking pretty bold," he said.