Today, the iPod; tomorrow, the iPhone.
Investors Thursday cheered Apple's record second-quarter results, which showed major sales growth for its iPod digital music device and Mac computers. But Apple's best days are ahead, tech analysts say.
Apple is putting most of its energies into the June release of the iPhone, a combination iPod/Internet browser and cellphone that will sell for $499 and $599. Apple CEO Steve Jobs has projected sales of 10 million iPhones in its first year. At an average price of $500, that would generate $5 billion in additional retail sales.
"The iPhone has the potential to be even bigger than the iPod," says Gene Munster, an analyst with Piper Jaffray. "The cellphone market is gigantic."
Charles Wolf, president of investment consultant Wolf Insights, says Apple will likely follow its iPod pricing strategy — starting with a high retail price, and lowering it as costs decrease. "Once the price comes down, Apple could get to a 5% market share of phones, good for 75 to 100 million units a year," Wolf says.
Mac sales have doubled from five years ago, when the iPod was introduced. Wolf believes the iPhone will have a similar "halo effect."
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