Investors' hopes for the iPhone may be too high

SAN FRANCISCO -- Apple Inc., whose market value passed $100 billion in May as euphoria mounted over its iPhone, may be facing investor expectations that are too high.

Apple may sell as many as 200,000 iPhones in the product's first two days on the market this week, and as many as 3 million in the second half of the year, according to the most optimistic analyst estimates. Apple, in its only public forecast, says it plans to sell 10 million next year.

Sales at those levels would outdo the iPod, Apple's best-selling product to date, for comparable periods. The danger is Apple may fall short of projections and damp investor enthusiasm for the product.

"There's definitely a lot of buzz," said Andy Hargreaves, an analyst at Pacific Crest Securities in Portland, Ore. "If they only sell 100,000, that would be bad," and the stock would fall.

With iPhone partner AT&T Inc., Cupertino, Calif.-based Apple will begin selling the combination iPod and mobile phone Friday.

Apple shares have gained 43 percent since chief executive Steve Jobs unveiled the iPhone Jan. 9. Investors are betting Jobs can give Apple a foothold in an industry almost four times as big as the personal-computer market. The iPhone will become Apple's third major business, along with the Macintosh computer and iPod player, which each have sales of $10 billion a year.