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Day October 4, 2011

Let's talk 'Let's talk iPhone' on 5by5.tv

Thirty minutes after the end of the ‘Let’s talk iPhone’ event, 5by5.tv will be hosting a set of commentators[1] giving initial impressions of announcements.

“Tune-in” at http://5by5.tv/live

I’ll update this post with a link for the download once available.

[UPDATE]

Dan Benjamin talks about Apple’s “Let’s Talk iPhone” event with Dan Moren, Marco Arment, John Siracusa, John Gruber, Horace Dediu, Arnold Kim, and Christina Warren. Topics include the iPhone 4S hardware and form factor, the iOS update, the “geek letdown”, Siri, iPods, pricing, release dates, AppleCare, carriers, serious stats, iCloud and iTunes Match, the non-geek response, and more.

Download the episode here.

  1.  @marcoarment @asymco @arnoldkim @dmoren (@gruber & @jsnell if avail)

Sprint's gamble

The Wall Street Journal reported that Sprint Nextel made a “multibillion-dollar” gamble on the iPhone. This is based on information that Sprint committed to buy 30.5 million iPhones over the next four years.

Wall Street Journal reporters calculated that the deal is worth around $20 billion on the basis of iPhone ASP during the last quarter (about $650). That Sprint would get that price is possible but not necessarily correct as there is likely to be some discount and the ASP Apple receives includes accessories.

But the “gamble” is more than the deal value. The way it’s being reported is that Sprint bet the company on being able to sell this many iPhones. So naturally we have to ask: how hard can it be to sell 31 million iPhones?

First, note that the order is over a four year period. It’s also not likely to be linear, with volumes accelerating over time. If I estimate a ramp where in year one the commitment is for 4 million, year two 6, year three 9 and year four 12 million we get a total of 31 million. Can Sprint sell this volume?

To get an idea we can look at the sales rates for the other US operators. I built a table of iPhone sales by Operator last July. The data is shown in the following chart:

What is interesting is to see the number of iPhones sold in a given time frame as a percent of subscriber base.