Jobs' Impending Return, iPhone 3G S Sales Boost Apple

The continued success of the iPhone (the 3G S sold more than one million since its debut Friday) and speculation over CEO Steve Jobs' return to active duty suggest Apple's smartphone will remain the market leader.

Apple announced on Monday that sales of its latest incarnation of the iPhone smartphone, the iPhone 3G S, had broken the one million mark on June 21, the device's third day of release. The iPhone 16GB is available for $199, with an expanded 32GB model for $299. Apple has also reduced the price of the iPhone 3G to $99 for the 8GB model. "Customers are voting and the iPhone is winning," Apple CEO Steve Jobs said in a statement. "With over 50,000 applications available from Apple's revolutionary App Store, iPhone momentum is stronger than ever."

In addition to the iPhone 3G S' warm reception during a chilly economic period for consumers, speculation is growing that Jobs, on medical leave for the past six months, is close to returning to active duty at the company. The Wall Street Journal reported on Saturday that Jobs received a liver transplant in Tennessee "about two months ago." While Apple won't confirm when, or if, Jobs is to return by the end of June, a spokesperson told the paper the company is looking forward to his return by the close of the month.

One clue offered by Apple was the statement by Jobs on the company's release regarding iPhone 3G S sales, his first since taking a medical leave of absence in January. "It seems like the Apple PR folks are cranking it up in terms of Jobs' visibility, but historically they're pretty mum about the direct stuff," said Michael Oh, president of Apple specialist and reseller Tech Superpowers. "The more information that is creeping out, even the rumors that he's been seen on campus, it does seem that he's back to a certain point--what it comes down to is, -to what extent?'"

Despite the continued success of the iPhone, Apple faces renewed competition from smartphone makers such as Palm; the company's touch-screen Pre smartphone debuted earlier this month, retails for $199, while T-Mobile USA is getting ready to release its touch-screen iPhone competitor, the myTouch 3G smartphone, on June 22. It will be the second smartphone running Google's open-source Android operating system. The myTouch 3G will also retail for $199 with a two-year contract.

However, Oh said he thinks the iPhone is likely to lead the smartphone market for the time being. "Certainly the numbers over the weekend are a strong indication that when it comes to awareness that people have about the product, the iPhone still has it," he said. "A lot of phones that are coming out will end up being in the same category [as the iPhone], but the iPhone has so much momentum. It's the same thing with the iPod."  

Oh said much of the iPhone's continued success can be attributed to Apple's App Store, which through innovation has created more iPhone loyalty. Competitors such as the Pre, or even Nokia's $700 N97, which comes preloaded with the competing Ovi application store, won't be able to grab a significant slice of market share immediately. "Apple for the time being is going to be at the top of the heap," he said. "The Pre by no means is an iPhone killer. With this momentum, nothing out there is going to be an iPhone killer."