Half-a-Million iPhone 3G S at Launch, Analyst Says

Did Apple eat its own lunch by offering the iPhone 3G for a mere $99? Sales of the iPhone 3G S, which hits the shelves tomorrow, are expected to be lower than the iPhone 3G at its launch.

At least, Piper Jaffray’s Gene Munster thinks so. He predicts half a million iPhone 3G S units will be sold this weekend, which is still five times more than Palm reported for the Pre but only half of the million iPhone 3G units sold. Munster thinks iPhone 3G S sales will be less in the first weekend for a number of reasons:

The iPhone 3G S costs $199, which is the same as the iPhone 3G when it first came out. But Munster says the iPhone 3G had a much higher value prop over the previous model (think: 3G!) than the iPhone 3G S does over the iPhone 3G – that is, the iPhone 3G S has a better camera, video and is faster but not much more. Thus, there will be “less of a surge in units at launch,” Munster says in a research note.

Another reason iPhone 3G S sales won’t be as impressive as its predecessor’s sales, says Munster, is due to a limited launch. The iPhone 3G S will debut in eight countries, whereas the iPhone 3G launched in 21 countries.

On the flip side, AT&T and Best Buy did sell out their pre-order allotments of the iPhone 3G S. Of course, Apple also ran out of iPhone 3Gs last year, as inventories were tight for weeks after the launch last summer.

Are you buying an iPhone 3G S? Send me an email at tkaneshige@cio.com. Or follow me on Twitter @kaneshige. Follow everything from CIO.com on Twitter @CIOonline.