Q4 = $7.13 Billion

What is 0.575% of this revenue stream ? $409 milion...no wonder they opted to avoid licensing fees.

Interesting to note that the iPhone began selling in 2007, the same year EDIG hired Duane Morris LLP.

3.iPhone Unit Sales, ASP and Revenue Estimates for Q4 2010

The only firm basis one has in making a prediction based on the seasonal trend is looking at Q3 to Q4 of 2009. The sequential growth from Q3 to Q4 of 2007 is entirely unreliable owing to the fact that the iPhone was released just two days before the end of Q3. Thus, there effectively is no sequential trend between Q3 and Q4 of 2007.

2008 is also unreliable because Apple suspended sales of the iPhone in Q3 2008 and that’s why they only sold 717,000 total units in the quarter.One couldn’t buy an iPhone for a large portion of time.So it’s hard to gauge exactly how big the difference would have actually been had the iPhone been on sale for the duration of Q3 2008.

First, it would be wise to notice that iPhone sales have absolutely exploded in Q1 and Q2 of 2010.So that suggests that interest is outright accelerating for the device.Not just for iPhone 4, but for any iPhone period. We should have seen a very weak Q2 due to general seasonal weakness, and due to the fact that everyone knew that iPhone 4 was just around the corner. This didn't happen. Instead, Apple, defying all logic, went on to post record iPhone sales in Q2. That would not have happened if iPhone sales weren't drastically accelerating on an ongoing sequential basis.

Moreover, if we look at 2009, and if we look at the year over year growth rates, we can get a rough idea of what to expect in Q4. In 2009, we saw a 2,159,000 unit sales jump in Q4 over Q3 or roughly 41.6% sequential rise in sales. If we look at the year over year growth rate in Q4 of 2008 to Q4 of 2009 with the iPhone 3G to iPhone 3GS, we only saw a jump of 475,000 units or roughly 6.9% YoY growth.

Yet, given that iPhone 4 is a whole new design, and given the fact that we’re seeing record demand in pre-orders, it stands to reason to expect a larger YoY rise.Especially because if we use the YoY growth rate of 6.9% we would only get 7,875,000 total units sold in the quarter which is significantly below Q2 numbers (Apple’s weakest quarter of the year). That number wouldn't make any sense because how can one expect to see weaker sales in a quarter that benefits from an iPhone launch?

Thus, I think its best to look at the actual unit sales growth number instead of the rate.Adding a 2.1 million unit rise to Q4 of this year, like the 2.1 million unit rise last year, makes a lot more sense.Because trying to use the sequential growth rate of 41.6% would just be silly considering the law of large numbers.It’s much easier to go from 4 million to 6 million units than to go from 9 million to 13 million units.I think a good first call would put iPhone sales at 11.5 million units for Q4 of 2010.That gives us a very solid sequential growth rate that can be adjusted as we get news from NPD and Apple regarding iPhone sales as the quarter progresses.