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Monday, April 28, 2008, 08:00 am PT (11:00 am ET)

Report: Apple places order for 24-25 million 3G iPhones

Long-time iPod manufacturer and current iPhone builder Foxconn Electronics has been selected by Apple to assemble the company's upcoming 3G iPhone handset, with volume shipments expected to begin this June, says a new report out of the Far East.

Citing sources at component suppliers as well as foreign institutional investors, the Chinese-language Commercial Times reports that the Taipei-based manufacturer was recently instructed by Apple to begin procuring component materials for the next-generation touch-screen handsets for an initial test build no later than the end of May.

Shipments of the 3G iPhone are expected to top three million units in June with the model likely to ship a total of 24-25 million units throughout its life-cycle, the paper added.

Since introducing its first-generation iPhone last June, Apple has managed to sell just shy of 6 million units with help from exclusive wireless partners in the US, UK, Germany, France, Austria and Ireland. However, a flurry of recent reports have suggested the Cupertino-based company will forgo exclusive carrier contracts as it expands distribution of the handsets to additional European nations and portions of Asia around the same time it unveils its 3G offering.

Specifically, Italian newspaper Repubblica reported last week that Apple had inked a deal with Telecom Italia Mobile (TIM) to begin selling a 3G iPhone through the carriers retail shops. The report added, however, that the exclusivity to TIM would last only a few months and that other Italian carriers would immediately be free to offer the handset, which would ship unlocked, to their own customers.

That report added to similar claims emerging out of Australia and was soon followed by an almost identical report out of Belgium. In the case of the latter, regional publication Astel.be. cited sources in saying that three Belgian carriers — Proximus, Mobistar and BASE — were each creating special data packages for the 3G iPhone, and that Mobistar would likely have a several month exclusive to market the handset through its retail shops like Italy's TIM.

Sales of iPhones have thus far been described as lackluster in Europe, as customers largely chose to forgo the existing model in favor of waiting for a version capable of taking advantage of third-generation wireless networks, which are most prevalent in the region.

As such, the iPhone currently stands as a relatively minor contributor to Apple's top line, generating only 2-3 percent of the company's revenue. However, analysts on Wall Street believe that sales of the device one day become as large as the the company's current Mac business, fueling approximately $15 - $20 billion in annualized revenue, as the iPhone capitalizes on a global handset market ten times the size of the worldwide PC market.

In March, Commercial Times reported that Foxconn was amongst those Taiwanese assemblers bidding on Apple's 3G iPhone contract, with DowJones claiming shortly thereafter that a deal between the two companies had been reached.