• Ad Age, Monday, January 19, 2009 11 AM

As I was reading Rita Chang's story this morning about Apple possibly leaving $80 million on the table this holiday season because would-be gift-givers of iPhones could not sign the two-year contract with AT&T that's required as past of the transaction, I kept thinking: What makes the iPhone different from most other phones?

As if she were on the other end of my thought on a crystal-clear connection, Chang answers: "There was hue and cry because, well, it's the iPhone, with its attendant cult following common to all things Apple."

Piper Jaffray estimates that Apple could have sold 300,000 to 400,000 more iPhones if it were easier to give them as gifts. Since the entry-level phone costs $199, the unrealized revenue could be as much as $80 million. But as it was, the company sold 3.8 million units in December, just over half of what it estimates were fourth-quarter unit sales.

Piper Jaffray says Apple will roll out a low-end iPhone model by the end of the first quarter. "If that scenario bears out," Chang writes, "people could start gifting the iPhone to themselves."

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