3G iPhone: If They Build It, Will You Buy?

Apple (Nasdaq: AAPL) will manufacture 11 million 3G iPhones this summer, projects a Bank of America (NYSE: BAC) analyst. Furthermore, demand for the devices will be so great that he'll likely revise upward his previous estimate of 8 million sales in 2008.

After conducting a "channel check," BofA's Scott Craig said in a research note that Apple is gearing up to begin manufacturing the next generation of its iPhones this summer, with 3 million coming off factory lines in May, according to press reports. An additional 8 million iPhones are expected in June.

The 3G iPhones -- if Craig has assessed the situation correctly -- will come to market as the first-generation 2.5G iPhone is updated sometime this summer.

The final version of the iPhone software development kit is likely to arrive this summer as well, according to accounts. It's expected to ramp up adoption of the current-generation handset as developers build new applications for it.

How Many?

Given the many choices that will presumably be available this summer, it's fair to wonder if 11 million iPhones will be snapped up -- as the first-generation handsets were last summer -- or if they will languish on the shelves.

The current sales projections of the 3G iPhone may be a little aggressive, according to Joel Evans, founder and chief geek at Geek.com.

"People made their choices when the iPhone first came out," Evans told MacNewsWorld. "They knew there would be later versions that ran better and on a faster network. I doubt many of the current users are willing to plunk down another (US)$500 to $600 to get 3G connectivity."

Though he loves his iPhone, Evans admitted he hates the connection speed. "Using WiFi -- or in my house -- it works great, but not with the current connection that they offer." Still, he's not planning to buy the 3G version when it first comes out.

A Little Lower

The 10-million sales estimate is too high -- but not by much, said Michael Voellinger, telecommunications analyst for telecom research and consultancy Telwares.

Many current iPhone owners may be willing to spend money to swap out their phones, he told MacNewsWorld. Also, more businesses are likely to be drawn to the 3G version. His estimate for sales? Seven million.

Businesses may indeed be more interested in the iPhone once it's 3G-capable.

"I've heard rumors that 3G is 10 times the speed of the EDGE network, which the iPhone currently uses," LaBreche CFO Jacob Trippel told MacNewsWorld. "This means that there will be no delays in e-mail transmission and Web page loading, and more reliable connections to other networks."