Apps will drive iPhone sales – Goldman Sachs

 On strength of the multiplicity of soon-available applications, Apple will sell 20 million iPhones by the end of 2009, selling another 10 million in 2010, says Goldman Sachs.

"Third-party applications will differentiate the iPhone from a growing number of its smartphone competitors,” analyst David Bailey told The Financial Post. The analyst pointed out that deployment of Mac OS X on the device offers a “more robust” application development environment for developers, with the App Store promising a much better user experience, likely to sell more applications than existing smartphone application purchasing systems.

The analyst predicts applications will cost between 99-cents and $29.99, depending on how sophisticated the apps are, he also anticipates some smaller software solutions will be made available at no charge to iPhone users.

Predicting a huge number of applications for the device, the analyst pointed out, “Apple’s expanding addressable market for iPhone applications, in turn, should attract software developers’ interest and development resources, leading to a broader selection of third-party applications available at the App Store.”

Meanwhile, the pre-release hype for the next-generation device and continued anticipation for the upcoming iPhone Software 2.0 remains. The existing model is in ever-shorter supply worldwide, prompting Roger Entner, senior vice president at market research firm IAG Nielsen to observe Apple to be managing supply to prevent disappointing customers. “You can say what you want about Steve Jobs, but he’s learning from his mistakes. They are cleaning out the supply channel.”

A wave of recent deals with mobile telecoms firms suggests Apple hopes to sell millions of units of the device within weeks of its debut, with the only major countries without an iPhone distribution agreement at present being Japan, Russia and China. Apple has otherwise inked deals that mean the iPhone will be available to over 600 million mobile phone users worldwide (estimated). At present, the device, which has sold just over five million units, is available to a potential 153 million users.

Mobile networks now concede iPhone users are colossal consumers of data bandwidth – mainly because the device actually lets them use such connectivity in a useful and approachable way. T-Mobile iPhone customers consume 30 times more data than its other wireless customers, the New York Times claims.



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