Apple's iPhone was the top-selling smartphone in July, research firm iSuppli reported Tuesday. On the basis of sales figures so far, iSupply predicted that 2007 iPhone sales would reach 4.5 million, would triple in 2008, and would hit 30 million in 2011.
"This is a remarkable accomplishment for Apple," iSuppli said in a statement. It's "likely," the firm said, that iPhone sales so far represent the strongest start for a handset in history.
"While the speed of the iPhone's ascent to the top of the smartphone and feature-phone charts is remarkable, it's equally amazing that Apple achieved this in the face of numerous, well-entrenched competitors," the firm said.
Top Smartphone and Feature Phone
Greg Sheppard, chief development officer for iSuppli and the author of the study, said that there "was a lot of pent-up demand" for the phone. "The follow-up months will be the real proof of the pudding," he said in a telephone interview. Still, he said, it is a data  point that iPhone "popped out ahead" of BlackBerrys, Palms, and other leaders in the smart phone category.
Steve Jobs' latest device tends to be seen as straddling two market segments -- smartphones, which allow users to install applications, and feature phones, which allow users to play multimedia. The iPhone matched sales of the leading feature phone, the LG Chocolate, Sheppard said, noting that some people probably wouldn't put the iPhone directly in competition with smartphones. "But," he said, "if you really look at it, it's a smartphone."
As strong as iPhone sales were, the overall numbers are still quite small. The two iPhone models accounted for just 1.8 percent of all U.S. handset sales. "If you compare this phone with Razrs, for example, it's still quite small," Sheppard said. "It's an interesting note, out of the chute they're able to stay on par" with the market leaders.
Buyers Rich, Young, Male
Who bought iPhones? Perhaps not surprisingly, the demographics skew upscale, young, and male. The iSuppli researchers found that 57 percent of purchasers were under 35, 52 percent were male, and 62 percent had a college degree. "Certainly, it skewed toward higher income levels," Sheppard said. The immediate sales were to early adopters, people for whom having the latest cool technology is important.
"We see it diffusing more and more into the marketplace," he said. "Certainly, there is price sensitivity." He pointed out the two main cost-drivers in the iPhone are memory and the screen. "Memory will keep going down in price and we expect to see entry-level price points continue to drift down." On the other side of the equation, Apple can be expected to offer more memory.
Sheppard said that in 2007, Apple is building out its marketing, setting up distribution channels and readying a global deployment . Once that infrastructure is set, "we're looking for a big jump in '08," he said. "We're assuming it's going to be a big product, that Apple will roll out new iPhone products." Given that the worldwide market for cell phones is over two billion, there's a very large upside for a must-have device.
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