To put the report into perspective, look at the unit sales graph below, keeping in mind that it shows quarters for calendar years, not Apple's fiscal year, which starts in October (click to enlarge):
The unit movement pattern shows the impact of Apple's product releases. Up until this year, there's been a new iPhone that became available at the end of June, just in time to give a spike to Q3 sales. In the summer of 2009, Apple introduced the 3GS, but still kept the 3G as a less expensive choice. Apple was also expanding the number of its geographic markets. That was the first year that the iPhone sold more in the last calendar quarter than in the quarter of the new model's introduction.
Last year, Apple introduced the iPhone 4, which had features that drove a strong consumer response, keeping the 3GS as the new low-price version. By 2011 Q1, Apple was selling iPhones to Verizon (VZ) customers as well as those of AT&T (T), expanding the domestic market.
So how should Apple expect unit sales to go for an iPhone 5? Here's another graph showing a trend line of two additional quarters, which would count for sales through this September (click to enlarge):
Should things continue in the way they have, you might expect 22 million units for that quarter. However, what happens if there's an iPhone 5? Again, let's look at the past. In 2009, the 3GS introduction resulted in a 41 percent sequential quarterly growth. Last year, the iPhone 4 and additional markets pushed sequential growth to 68 percent. This year, Apple's supply chain was hit by the Japanese earthquake and tsunami, which constrained supply. Countering that, the white iPhone finally started to ship.
Assuming that Apple has now largely recovered from the supply chain problems, even if Q2 sales were flat, that would give a base of about 18.6 million. A 35 percent quarter-to-quarter growth -- significantly less than with either the 4 or the 3GS, would result in 25.1 million units being sold in the third quarter.
The rumors say that the iPhone 5 will be thinner and lighter than the 4 and have an 8-megapixel camera as well. Plus, the entire smartphone market still continues to grow. In short, is 25 million an aggressive goal for Apple? No, it's simply a realistic projection.
That's for total iPhone sales. Apple will likely make the iPhone 4 the new lower cost model, if not create a three-tier choice, with the 3GS remaining at $49 (or perhaps lower) and the 4 at maybe a $99 price point. A strict extrapolation of sales wouldn't be just for the iPhone 5. However, by the time Apple releases the new model, holiday shopping will likely be in full swing and the company won't want to run out of the new models.
So, 25 million is hardly an extravagant manufacturing run. If the combination of new features and previous iPhone owners now waiting for an upgrade (their two-year mark having been up in June or July) does well, then the quarter the 5 is available, we might see Apple's total quarterly unit sales hit 28 million or possibly more.
All this is just another headache for Research in Motion (RIMM). RIM has just slipped into third place for smartphone sales in the U.S., a key market for the company. Google (GOOG) Android and Apple's iPhone are the number one and two platforms, respectively. Given that RIM still won't be ready with its new high-end smartphones, I suspect that 25 million for Apple, and however many more for all the Android phones put together, might be conservative.