June 25 (Bloomberg) -- 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 that Apple may fall short of projections for initial sales 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, Oregon. ``If they only sell 100,000, that would be bad'' and the stock will fall. Hargreaves is one of two analysts predicting two-day sales of 200,000.

With iPhone partner AT&T Inc., Cupertino, California-based Apple will begin selling the combination iPod and mobile phone on June 29 in the U.S.

Apple shares have gained 43 percent since Chief Executive Officer Steve Jobs unveiled the iPhone Jan. 9, seven times faster than the Standard & Poor's 500 Index. The shares closed at a record high of $125.09 on June 18. Apple fell 66 cents to $122.34 at 4 p.m. New York time in Nasdaq Stock Market trading.

Betting on Jobs

Investors are betting Jobs, 52, can deliver on his sales promise and give Apple a foothold in an industry that's 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 about $10 billion a year, Jobs told attendees at a conference on May 30. Slimmer and higher-capacity versions of the iPod and faster Macs built with Intel Corp. chips helped sales more than triple in five years to almost $20 billion in 2006.

The iPhone may have a greater impact on Apple's revenue than the iPod because of its price and the potential number of units sold. Apple will sell two models, a 4-gigabyte version for $499 and an 8-gigabyte model for $559. IPods start at $79 for the Shuffle and up to $349 for the most expensive video version.

Apple also will get an undisclosed piece of the monthly subscription fee charged by AT&T, the iPhone's exclusive wireless service provider. A two-year contract with AT&T is required.

Price Issue

Analysts don't expect the iPhone to have a significant effect on Apple's revenue this year or next because the company said in April it will recognize revenue from sales of the device over two years, rather than in the quarter it's sold.

San Antonio-based AT&T may pay Apple $5 to $10 per month per subscriber, said UBS analyst Benjamin Reitzes in New York. He estimates sales of 150,000 iPhones on June 29 and June 30, the last two days of Apple's third quarter. He says that would add more than $8 million to Apple's revenue for the quarter.

Apple spokeswoman Natalie Kerris declined to comment beyond confirming that iPhone sales will begin June 29.

Apple may report a 21 percent jump in total third-quarter revenue to $5.29 billion, according to the average estimate of analysts surveyed by Bloomberg. Fourth-quarter sales may rise 24 percent to a quarterly record of $6.02 billion, the analysts estimate.

The iPhone's price and the required service contract, a boon to Apple if unit sales reach projections, may prove to be a deterrent to some potential buyers.

While 60 percent of 465 people questioned in an IDC survey released last week said they were interested in the iPhone, just 10 percent said they may buy one at full price.

No Simple Sale

Outside of early adopters and die-hard Apple fans who will buy regardless of price, ``the associated costs of ownership will persuade many others into a `wait and see' position,'' said Shiv Bakhshi, a researcher for Framingham, Massachusetts-based IDC.

One of the least optimistic projections of sales for the first two days is 50,000 units, by analyst Shaw Wu of American Technology Research in San Francisco.

``The iPhone is not a simple sale,'' said Wu, who rates Apple's shares ``buy'' and doesn't own them. ``You have to sign up the customer for service. Can they even get a couple of hundred thousand people through the stores in two days?''

Expectations that the iPhone will outsell the iPod led Piper Jaffray analyst Gene Munster earlier this month to raise his share-price forecast for Apple by 14 percent to $160 this month.

Munster expects iPhone sales of 200,000 units the first two days, 1 million in the quarter ending Sept. 30 and 2 million in the holiday quarter. Apple sold 381,000 iPods in the first year after Jobs unveiled the player in October 2001.

The iPhone will go on sale at 6 p.m. in each time zone in the U.S. Apple will sell it through its Web site and 162 retail outlets, as well as at 1,800 AT&T-owned stores.

The following table shows estimates for unit sales of the iPhone.

                             Fiscal Year       Fiscal Year
                             Ending Sept. 2007 Ending Sept. 2008
================================================================
American Technology Research  250,000          **
Bear Stearns & Co.            650,000          **
Credit Suisse                 1.7 million      12.3 million
Pacific Crest Securities      800,000           4.8 million
Piper Jaffray & Co.           1.2 million       8   million
UBS AG                        950,000           8.1 million
================================================================
**Not available
Source: Analyst research reports

To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net.

Last Updated: June 25, 2007 16:08 EDT