Remember the first year of the Nintendo Wii? The game system was so hot that stores couldn’t keep it in stock. Long lines of parents stretched in front of stores, all hoping to snag one of the coveted systems to have one under the tree Christmas morning. Apple has that kind of cache with the iPhone, except it’s yearly launches leave the Wii choking on its dust.
With demand outstripping supply, Apple likely could have sold more than “over five million” iPhones over the first weekend. However, producing more iPhones is just one way for Apple to sell even more phones. Apple also has a bench full of potential new distributors.
A large part of Apple’s success has come from adding carriers, (read: potential customers). Apple originally started with just AT&T in the U.S. If you wanted an iPhone, you came to AT&T, plain and simple.
But now, AT&T doesn’t have a monopoly, the Wall Street Journal reported: “By last December, after the launch of the iPhone 4S, Apple’s smartphone was with 230 carriers in 105 countries. That helps explain why iPhone sales grew to 93 million devices in 2011 from 4 million in 2007.”
Now Sprint and Verizon are benefiting from the iPhone halo. Despite the $15.5 billion Sprint is paying Apple over the next four years, they expect the iPhone to add to its profits, to slow customer defections, and to bring on new users.
The “Fool” points out: “Apple still has a number of expansion options. T-Mobile USA, South Korea’s LG Telecom, Japan’s NTT DoCoMo, and China Mobile are large carriers that do not yet offer iPhone 5. The latest iPhone is the first of its kind to offer a chip compatible with China Mobile, the world’s largest carrier.”
One analyst calculates Apple can still target another 500 million subscribers, which would be a 50% increase from the 1 billion already targeted by current carriers. While we’re at it, let’s be sure to note that of those 500 million, only 175 million would come from T-Mobile, LG Telecom, NTT, and China Mobile.
Sure, eventually distribution channels will begin to saturate. That’s when the iPhone moves form being a growth story to being a cash cow. Money to fund other Apple inventions and innovations.