Apple Hopes to Sell 1 Million IPhones in Three Months

SAN FRANCISCO -(Dow Jones)- Apple said Wednesday that it hopes to sell its one millionth iPhone by the end of its first full quarter of sales, slower than some may have anticipated.

Apple's overall strong results lifted the company's stock in after-hours trading. Shares recently traded at $147.80, up 7.3% from Wednesday's close. The stock's all-time intraday regular-session high, set Monday, is $145.22.

Apple's iPhone forecast suggests the wild estimates surrounding its launch - such as those suggesting 700,000 units sold over the first weekend - may have been off base. In light of that, Apple may face pressure to spur sales by introducing the next version of its iPhone sooner than planned, such as one that fixes the iPhone's most discussed flaws, its slow Internet network.

The iPhone operates on AT&T's Edge wireless data network, which provides an Internet experience that is similar to a fast dial-up connection.

That's too slow for some people, especially those weaned on broadband. As a result, many say they are putting off buying the device until it can be connected to a faster wireless data network.

"It's just too slow for me," said Ben Creighton, a 45-year-old Richmond, Calif., resident who was shopping for an iPhone in San Francisco. While the iPhone offers a faster Wi-Fi wireless connection, "there's going to be lots of times when I won't be near a Wi-Fi network,' he added.

Speculation is increasing that Apple will introduce an improved iPhone around November, in order to keep sales momentum going. Apple's goal is to sell 10 million iPhones by the end of 2008.

"Steve Jobs (Apple's Chief Executive) admitted the iPhone's connectivity could use an improvement," said George Iwanyc, of CIBC World Markets. "We believe that 'improvement' could come soon."

That improvement would be an iPhone compatible with the growing number of third-generation cellphone networks that have Internet connections that rival and, in some instances, surpass the performance of a wired Internet connection.

An upgraded iPhone is expected. Recent patents point to a smaller, slimmed down version of the device, but many don't expect that until sometime next year.

Meanwhile, Apple plans to sell the iPhone in Europe soon, as it tries to meet its goal of selling a million of the devices over the next three months. It will also introduce the iPhone in Asia in 2008.

AT&T was first to indicate this week that iPhone sales results may not have been as robust as suggested when it reported Tuesday that 146,000 iPhone buyers signed up for service in the first two days of its launch.

Apple said it sold 270,000 iPhones during the device's first 30 hours of availability, and it recorded $92 million in deferred revenue from iPhone and Apple TV sales for the quarter ended June 30. In the quarter ended March 31, before the iPhone went on sale, Apple reported $10 million in deferred revenue in that category.

As a whole, though, Apple's booming core businesses is masking any iPhone disappointment. As its third-quarter financial results show, its core businesses of selling computers is setting sales records and eating up market share.

-By Ben Charny; Dow Jones Newswires; 415-765-8230; ben.charny@dowjones.com

Corrected July 25, 2007, 19:37 EDT (23:37 GMT)

(END) Dow Jones Newswires"

Posted to the site on 26th July 2007