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iPhone predictions: eBayed at $5000, returns, campouts, and more

Posted on June 15, 2007 by Jeremy Toeman

I still don’t quite understand the key motivators that’ll drive iPhone sales, but I do agree that they’ll be selling a boatload.  Assuming there’s no big price drop, I don’t see them moving 10 million in year one (nor 45 million in 2009, come on!), but somewhere in the 4-6 million certainly seems right to me in comparison with a worldwide smartphone market of 113 million units this year.  Then again, since the experts themselves seem to argue about whether the market is going up or down, who knows how big the market really is?

One thing that’s for sure is there’s a chunk of people with a fever, and that fever can only be cured by one thing: iPhone.  They want it, and want it bad.  Americans today have a lot more gadget lust than years ago, and are willing to pitch tents, camp out, and overpay for their “gottahaveits”.  When the Xbox 360 launched in North America, it sold out within hours, and was on eBay for ridiculous prices.  A former coworker of mine managed to get 4 Premium units and sold two for $2500 each, but the record was apparently set at $10,400.  Here are a few predictions I’ll make:

  1. They will not have 3 million units ready by June 29th.  The lead-times to build such high-quality, customized hardware are probably 8-12 weeks, and they’re probably still wrapping up the final software release now, which doesn’t give them enough QA time to load it on all the devices AND ship them to their distribution centers AND ship them to AT&T stores, all of which is not quite overnight.
  2. Diehards will be seen camping out outside of stores as soon as the 24th.  Photos will be taken, put online, and Dugg within hours.  Despite a “6pm local time” statement, by the night of the 28th, I predict no fewer than 50% of all locations stocking iPhones will have one camper.
  3. Major metropolitan areas will be sold out within 30 minutes, and few, if any, units will be available by close of business on the 29th.  I doubt we’ll see shootings, but there’ll be no fewer than 3 fights on record nationwide.  I’ll give a slight outside chance on one AT&T store being vandalized by frustrated customers.
  4. The first wave of public dissatisfied grumpiness will start one week after launch, and steadily increase.  There’s so much hype and the expectations are just too high.  Don’t get me wrong, this won’t be a bomb like the last time Apple was involved in a phone, but I anticipate backlash.  My belief is that human nature shows that people root for the underdog, but turn on a winner, and Apple’s moved into the ‘winner’ camp of late.  I do predict that the iPhone will have higher return rates than anything else both Apple and AT&T sell (at present).
  5. Expect heavy eBay gouging for iPhones for the first month.  Yes, you’ll need to be in contract, but still, they’re comfortable enough betting on AT&T customers, so there’s nothing to prevent someone from signing up, paying out the cancellation fee (or just transferring service to another phone), then selling out the unit online.  Assuming I’m correct about unit shortages for the first week-to-month, I think we’ll see some skyrocketing on eBay, and I’ve polled around some peers for their opinions as well:

Jeremy Toeman: $5000 will be the record price for an iPhone sold on eBay.

Michael Gartenberg (Jupiter analyst): “you’ll see units with an asking price of 3k and more than a few sold at $1,000 or above”

Ryan Block (Engadget Editor-in-Chief): “all bets are off with unlocked [phones]”

Dave Zatz (tech blogger and Sling Media employee): “due to a two year contract, if the price points hold the same for both the new *and* current customers, there won’t be much of an initial aftermarket ”

Veronica Belmont (said whilst prepping her latest CNET podcast): “[I] predict they hit $1200”

Ben Drawbaugh (EngadgetHD writer): “if there wasn’t the 3 million units rumour out there, I would say about 700, but I think there might actually be enough to go around, but I’m not good at predicting these types of things”

Ross Rubin (NPD analyst): “availability is still unknown but, if it approaches the level of consoles during last year’s holiday, I’d guess $2,500 to $3,000.”

Kevin Tofel (Managing Editor, jkOnTheRun): “The new math: how many ebay Wii’s will equal one iPhone. I say three.”

There you have it.  We’ll see who’s right and wrong in the coming months.  Either way, they’ve done a heck of a job building buzz and hype.  Now it’s time for sales.

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Posted in Marketing, Mobile Technology | 7 Comments
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7 thoughts on “iPhone predictions: eBayed at $5000, returns, campouts, and more”

  1. Pingback: Zatz Not Funny!»Blog Archive » Archos Preps TV Plus Media Extender

  2. John Gibson says:
    June 15, 2007 at 1:10 pm

    No removable SIM Card = big hit to the secondary market.

    Reply
  3. Dave Zatz says:
    June 15, 2007 at 2:00 pm

    In theory, I agree with you John… But I’m not convinced we know the deal for sure on the SIM. Here’s a pic of the top which *might* reveal a SIM tray:
    http://www.iphonealley.com/images/storyimages/june07/simtop.JPG

    I think the two year contract thing will limit sales/resales. It’s not going to be the PS3 all over again.

    Reply
  4. Dave Zatz says:
    June 17, 2007 at 6:48 am

    The other thing which will limit the secondary market is that only one of the top four phone carriers will support the iPhone. Whereas the PS3 and Wii don’t care what brand of television you’re using…

    Reply
  5. Avi Greengart says:
    June 19, 2007 at 1:47 pm

    Dave,

    Apple told me that the SIM card will be removable. They would not clarify whether other SIMs will work, whether it is locked to AT&T, etc. But I can confirm that there is a SIM, and it is removable.

    -avi

    Reply
  6. bluderfok says:
    June 20, 2007 at 12:20 am

    ‘The first wave of public dissatisfied grumpiness will start one week after launch, and steadily increase’, this happens to all revolutional products, I can still remember when iPod was launched everybody were saying it was gonna be another failure, but at the end, iPod took over the market of Mp3 player.

    http://www.mp4-converter.net/iphone-converter/

    Reply
  7. Dave Zatz says:
    July 1, 2007 at 6:10 am

    So did I win? 😉

    Reply

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Jeremy Toeman is a seasoned Product leader with over 20 years experience in the convergence of digital media, mobile entertainment, social entertainment, smart TV and consumer technology. Prior ventures and projects include CNET, Viggle/Dijit/Nextguide, Sling Media, VUDU, Clicker, DivX, Rovi, Mediabolic, Boxee, and many other consumer technology companies. This blog represents his personal opinion and outlook on things.

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