This is all because Steve Jobs is a genius. Wait until Apple opens a North Pole store to sell iCe to the Eskimos.

North Pole store??!! Any idea when? We are waiting..

I agree syeve jobs has done some amazing things, and i suspect he will retire in the not to distant future, he has set apple up for at least the next 10 years wil os development and a whole new playform with another steadily getting more recognition (appletv) he deserves a rest, and lets not forget that there is a LOT of talent at apple, steve is just a good dictator lol

OK run some additional numbers here:

IF they sell the phone at a $50 discount to the carriers, say $350 and it costs them $125 to build {I added a little added parts cost for conservatism } that gives them a gross margin of 64%, about double the margin on the computer lines.

And that money HITS THE BOTTOM LINE now, instead of being prorated over the 24 months life of the ATT contract as before.

Now we start the GOODIES:

1 - MobileMe, the replacement for .Mac, which is the central hub of the PUSH and SHARE system, annual cost is $99, I would imagine that at LEAST 1/2 of the buyers will opt in on that.

2 - Repair and replacement APPLECARE, if anything goes wrong, for two years they will fix it for free, ANYTHING but abuse. That goes for $70 a unit, say 1/3 opt for that one.

3 - Many of the units will be 16 Gig, not 8 Gig, that adds another 100 bucks, say 1/2 are the upgraded units, that number seems to be what I've seen on the other products, people go bigger, to make the planned obsolescence factor take longer.

4 - Applications store. This is THE SLEEPER, with the unit good for gaming, professional apps, and sharing apps, and apps for this and that all one CLICK away from a purchase, and Apple gets 30% of the revenue for each such purchase. If the average user buys 5 apps a year, for $15 average an app, that is $75 x 0.30 = $22.50.

5 - it is ALSO a movie player, and an media/song player, and most will buy a few movies, rent a few, and purchase some song. I'm ignoring this, as most could most likely do that with an iPod before, BUT many of these will be sold in countries without much Apple presence, they will be net new buyers, but factoring that in is tough to compute, so on IGNORE.

ADD these all up:

1 - Profit per sale, with 1/2 8G and 1/2 16G - $325 [ave]
2 - Mobile Me, with 1/2 buying in - $50 [ave]
3 - AppleCare, service contract 1/3 buying - $23 [ave]
4 - ApplicationStore, see math above - $22

MINIMUM TOTAL for YEAR one of ownership - $420 per unit average

NOW... if they sell 15 million units over first year, starting with July 11, that works out to $6.3 Billion and that works out to $7.250 per diluted share!

Given that the street is looking for UNDER $6 per share earnings now, over the next year, this is a pretty impressive JOLT flowing towards the bottom line { lots of factors will influence that, but this is a down and dirty looksee }

AND....

AND....

The "Halo Effect" of 70 nations with hands on OS X, the superior operating system, and this will GOOSE the rest of the system hard too. I suspect that the users will see the obvious benefits of this well designed, well executed system, and the sales of Macs, both lap and desk will experience a QUICK and persuasive move in places that had never produced any sales whatsoever.

This is NOT a phone guys, this is a PLATFORM, and like the iPod, it will spawn off software, peripherals, third party apps {20,000 in the pipeline already according to some } and be a PARADIGM CHANGER.

{ if anyone catches any mistakes on my math or thinking, PLEASE let me know, and remember I'm doing this off the top of my head here, thinking out loud as I type }

Servers are essentially free there already, they were put in place for the iTunes distribution, I believe they pay AKEMAI to put in nodes around the country for distributed processing and downloading, so the incremental bandwidth is indeed a factor, but seriously, what is the actual cost of bandwidth to a huge bulk user like Apple, should be an infinitesimal amount?

Well given that most of the developmental costs on the iPhone were factored into the first model, I'm assuming this round, version II, will have a much lower assigned factor.

And I really believe I {intentionally} massively UNDERSTATED the revenue from the APPSTORE part of things. I can see program developers porting down/over, most of the popular programs, professional and otherwise in a slimmed down version for the iPhone OS, those apps will be offered at MUCH greater prices than the $15/app I assumed above.

My guess is that MOBILEME priced at $99 per year, costs Apple incrementally $5 MAX. And the APPLECARE for $70 for two years, should have a 65% expected net, most service contracts are never used, but are really insurance more than anything else.

There is another factor here too. If ONE family member gets the iPhone and loves it, won't the teenagers pout for one, and the Mrs too? { remember, there are plenty of affluent families out there, with the means to spend, recession or not? }

AND THE REAL sleeper. The RECAPTURE EFFECT©™.

I'm assuming that out of the 6 million sold, 30% are unlocked and floating around the world. I can see 1/3 of those wanting to use MOBILEME so you are now monatarizing 2 million units that previously were going to add ZERO future income other than the iTUNES store purchases.

The more you tear this all down, and count the elements that will contribute to the bottom line, the better it gets.

To quote my kids, "No, Duh!".

I can't stand all this pontificating about a shortage of iPhone 3G units. This is obvious and does not require anyone to expend even one iota of thought to predict.

Forget manufacturing cost, forget markup, forget market share, and forget all this analysis (notice the "anal" in analysis).

The simple fact is that this product will be another sellout for Apple. There are MANY people who held off buying the original iPhone because of its shortcomings, most of which have been resolved in this version (Exchange support, 3G data speed and applications).

I am waiting for the iPhone 3G. I will be standing in line on July 11, 2008 to get my greedy little paws on one. I will buy the 16GB version for $299 and sign-up for the $30 per month data plan (and my wife will be pissed).

This version of the iPhone gives me what I want and I WILL now buy one.

The biggest mistake they made was locking it so badly with ATT that no one is able to buy it online and crack it. That will definitely hurt the browser share they had on the mobile market. THey need to open up and stop being arrogant. Otherwise, Apple Rocks!

Forget any number$, ca$h, tango denaro$, etc

Apple, and Steve Jobs, are all about Changing the World™

THAT can't be measured in $$$

What CAN be measured, if you care to try, is the fact that the iPhone (and Apple) will, eventually, bring in more money than they know what to do with

AND, one day, maybe 20 years or so from now, Apple's value will make Microsoft's current Kazillions look like chump change

And, that's a fact, Jack :-)

BC