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Ignore the iPhone Panic
=======================
By Tim Beyers January 29, 2008
mandarin lessons chicago Recommendations
"Millions of iPhones Go AWOL."
Talk about a hysterical headline. But that's how BusinessWeek
distilled volvo insurance discrepancy that came to light this week when AT&T
chinese lessons chicago T) said that it activated roughly 2 million iPhones last year.
Apple (Nasdaq: AAPL), by contrast, claims that it sold 3.7 million
iPhones in 2007.
That's 1.7 million iPhones unaccounted for and which, apparently,
aren't indie style Apple the $10 playing cards custom poker $18 a month in telecom royalties
investors like me were salivating over not so long ago.
Others, such homeowners insurance Sanford Bernstein analyst Toni Sacconaghi, say that
the discrepancy suggests that more than 600,000 iPhones are stuck
in some warehouse gathering dust. The rub? Rabid iPhone demand is
pure fantasy.
streetwear style electric apple juice acid test
What if Sacconaghi is right? What if demand is tepid? What if, instead
of Apple selling 10 million iPhones in 2008 --Â or, as some have
suggested, 7 million --Â Apple only sells 5 million handsets? And what
if only half of those sold were via AT&T or authorized European
carriers such as Telefonica's (NYSE: TEF) O2 or France Telecom's
(NYSE: FTE) Orange?
Then, dear Fool, Apple would be on pace to produce more than $30.5
billion in 2008 revenue by my math, or at least 27% growth on the top
line. My assumptions include:
* $299 in revenue per iPhone sold
* $120 in royalty revenue for each of the 2.5 million estimated
activations
* 3% growth in the iPod business
* 30% growth in the Mac renters insurance which has been expanding by at
least 40% in four of the past cheap insurance quarters
* Other software, peripherals, and services accounting for 22% of
total revenue. (This group has been responsible for more than 24%
of revenue in streetwear fashion of the past four quarters.)
Skeptics will point out that moderate iPhone growth could be troubling
over the long term. What if that's true? What if I'm right, and Apple
sells only 5 million iPhones in 2008, and then experiences only
emo clothes average -- that's 9% -- growth through 2012? That assumes
only 7 million chinese tutor chicago sold that year.
And supposing average selling prices drop another $100 to just $199 in
poker size playing cards term life insurance a mere $1.4 billion in handset sales. Ouch. Apple might
not be worth much more than it is today if the iPhone becomes the next
Treo.
What an unlocked phone could mean
But I bridge size playing cards it will. Limited activations via AT&T, or any carrier for
that matter, says little about the appeal of the iPhone. To the
contrary; it suggests only that iPhoners want the freedom to choose
their carrier.
That should surprise no one. Mac users have been rebellious since the
days they began flying the pirate flag at Apple's Cupertino
headquarters. And that's good news. The iEmpire under CEO Steve Jobs
has a history of cashing in on its many insure quote hunger for streetwear clothes cutting
edge.
What to do? How about charging pre-rebate prices for unlocked iPhones?
You read that learn mandarin chicago Want your iPhone unhinged? Ka-ching! That'll be
$599, please.
No doubt AT&T, which has a five-year exclusive distribution deal with
Apple, would pitch poker cards fit over a move like this. But in business, money
talks and kickbacks to Ma full color custom playing cards for each independent clothing phone sold could
equal hundreds of millions in revenue. Do you life insurance believe she'd
turn it down?
And let's not forget that today's iPhone will look a lot different in
a year, when varied developers will join Google (Nasdaq: GOOG) in
creating software for the device. We don't know how much excitement
the next iPhone will produce, but history shouts plenty.
So, Steve, why don't you and Ms. Bell go back to the negotiating
table? Yeah, the iPhone numbers aren't great, but they aren't bad,
either. There's an opportunity to seize here; an opportunity to boost
volume and bring in billions in new revenue for you both.
In short: Everyone wins. Including, most importantly, your customers.
Get the best of the Fool delivered to your inbox every Friday
Internal use only. Check if using a test account.
France Telecom is a Motley Fool Income Investor recommendation. Try
this market-beating playing cards promotion free for 30 days. There's no obligation
to subscribe.
Fool contributor Tim Beyers didn't own shares in any of the companies
mentioned in this article at the time of publication. Find Tim's
custom faces playing cards here and his latest blog commentary here. The Motley Fool
has a disclosure policy.
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