Concerns over iPhone activation totals at AT&T & Verizon seen as overblown
Investors on Tuesday expressed concern that iPhone activations at AT&T had dropped 43 percent quarter over quarter, but one analysis notes that iPhone activations in the U.S. have historically dropped the quarter after a product launch.
Apple stock took a hit Tuesday morning ahead of the company's own earnings report, which will come after markets close in the afternoon. The drop was attributed to carrier AT&T's earnings, in which the company announced it activated 4.3 million iPhones in the first quarter of calendar 2012, representing 78 percent of all smartphones activated at AT&T.
But the 4.3 million iPhones activated at AT&T was also a decrease of 43 percent from the previous holiday quarter, during which the iPhone 4S was launched in the U.S.
While some investors have focused on that quarter-over-quarter drop, analyst Brian White with Topeka Capital Markets issued a note to investors Tuesday morning to dispel some of those concerns. He said it's more accurate to analyze AT&T's iPhone activations the quarter after a new iPhone launch, rather than focus on what appears at first blush to be a "soft" number.
White estimates that AT&T accounted for 14.5 percent of all iPhone shipments in the March quarter, down from 20.5 percent of shipments during the holiday 2011 quarter. AT&T's estimated share was pushed down because the iPhone 4S became available in more than 75 countries by the end of calendar 2011.
During 2011, AT&T accounted for an average of just over 18 percent of total smartphone shipments. But the iPhone 4S, which launched last October, was also the fastest international roll-out Apple had ever accomplished with a new iPhone model.
White noted that AT&T's percentage contribution of total iPhone shipments "fell substantially during the first full quarter" after both the iPhone 3GS launch in 2009, and the iPhone 4 debut in 2010. Specifically, in 2009, AT&T's share fell from 43 percent of iPhone shipments in the launch quarter to 35 percent in the following quarter, while a similar drop from 37 percent to 25 percent occurred in 2010.
"Due to the decline in U.S. iPhone activations after a launch and the ramp of international markets, we believe it is difficult for investors to read much into either AT&T or Verizon's... iPhone activations to estimate total iPhone shipments for this March quarter," White wrote.
He sees AAPL stock as an "attractive" option for investors given the pullback that has occurred in recent weeks. White had also said in a separate note issued on Monday that he believes recent losses for Apple have just been "profit taking" by investors, rather than any legitimate concerns over the company's business.
Apple stock took a hit Tuesday morning ahead of the company's own earnings report, which will come after markets close in the afternoon. The drop was attributed to carrier AT&T's earnings, in which the company announced it activated 4.3 million iPhones in the first quarter of calendar 2012, representing 78 percent of all smartphones activated at AT&T.
But the 4.3 million iPhones activated at AT&T was also a decrease of 43 percent from the previous holiday quarter, during which the iPhone 4S was launched in the U.S.
While some investors have focused on that quarter-over-quarter drop, analyst Brian White with Topeka Capital Markets issued a note to investors Tuesday morning to dispel some of those concerns. He said it's more accurate to analyze AT&T's iPhone activations the quarter after a new iPhone launch, rather than focus on what appears at first blush to be a "soft" number.
White estimates that AT&T accounted for 14.5 percent of all iPhone shipments in the March quarter, down from 20.5 percent of shipments during the holiday 2011 quarter. AT&T's estimated share was pushed down because the iPhone 4S became available in more than 75 countries by the end of calendar 2011.
During 2011, AT&T accounted for an average of just over 18 percent of total smartphone shipments. But the iPhone 4S, which launched last October, was also the fastest international roll-out Apple had ever accomplished with a new iPhone model.
White noted that AT&T's percentage contribution of total iPhone shipments "fell substantially during the first full quarter" after both the iPhone 3GS launch in 2009, and the iPhone 4 debut in 2010. Specifically, in 2009, AT&T's share fell from 43 percent of iPhone shipments in the launch quarter to 35 percent in the following quarter, while a similar drop from 37 percent to 25 percent occurred in 2010.
"Due to the decline in U.S. iPhone activations after a launch and the ramp of international markets, we believe it is difficult for investors to read much into either AT&T or Verizon's... iPhone activations to estimate total iPhone shipments for this March quarter," White wrote.
He sees AAPL stock as an "attractive" option for investors given the pullback that has occurred in recent weeks. White had also said in a separate note issued on Monday that he believes recent losses for Apple have just been "profit taking" by investors, rather than any legitimate concerns over the company's business.
Comments
Quote:
Originally Posted by jason98
It will only get worse in q2 and q3 unless they are back to June release cycle.
No, not really. And good luck thinking they're going back to June.
So basically Apple had a ridiculous quarter last quarter that would be damn near impossible to repeat but wall street will be all doom and gloom anyway because Apple didn't repeat it. Fact is AT&T activated a million more iPhones this quarter than they did this quarter last year. And Apple still sells more iPhones on AT&T and Verizon than all other smartphones combined.
The say this the day before a result? Haha!!
Its important to remember, in relation to AT&T numbers, that AT&T in January stopped allowing customers to upgrade their iPhone's at a reduced price (I think $200) before their contract was up - which they did previously. Now they have to pay the retail price for the iPhone if they want to upgrade early or wait until their 2 years is up.
This might explain why the AT&T numbers are significantly lower than the Verizon numbers. Either way all the carriers want to drive activations to other phones as the iPhone 4S costs them more than the other phones.
Quote:
Originally Posted by jason98
It will only get worse in q2 and q3 unless they are back to June release cycle.
It's not that's better or worse, but in the US we're getting close to smartphone saturation, for now. The adoption rate will slow, for everyone. There's still growth, but not exponential growth. At this point, the majority of people that want iPhones, have them. Product lifecycle fails no one...
Quote:
Either way all the carriers want to drive activations to other phones as the iPhone 4S costs them more than the other phones
Thats what they do in Australia, Optus tries to talk us out of iPhones saying how much more powerful Android is. I laughed and told him to stfu
Is anyone really surprised? It’s the iPhone 4(s)ame phone. Its biggest differentiator, arguably, is Siri, which is a piece of software. The phone is so much the same as the iPhone 4 that they opted to lock iPhone 4 people out of Siri because without it the differences would really be negligible to many people. We want new new new here in the US – and the iPhone 4S was only kinda new, cool as it is.
As a hobby, I have bought and sold probably 60 iOS devices since the launch of iPhone 4 and I can say with absolute certainty that the 4S dropped in resale value more quickly than any other iOS device. I personally was so very disappointed when the 4S launched but my contract was up so I got the 64GB version and sold it immediately for about a $550 profit. I bought another 64GB version back again a month later for that same profit number. Gotta love Craiglist! My wife's contract came up in March and she is just going to wait until October because she doesn't see the iPhone 4S as a worthwhile upgrade. This is one sale Apple has lost due to a lack of significant change in the iPhone - and I am sure she is not the only one.
Despite my huge disappointment in the 4S, I am still an iPhone / iOS fan – but Apple could lose me if they fail to keep pace with some of the very usable capabilities that their competition has been implementing.
I for one do not believe that one size fits all and would really appreciate at least a couple of options with the iPhone other than amount of memory. They do it with their notebooks and desktops, they can certainly do it with their phones.
Come on Apple!
Clicking 'edit' brings up both a blank 'reply' and an editor. UGH!
Quote:
Originally Posted by geoadm
Thats what they do in Australia, Optus tries to talk us out of iPhones saying how much more powerful Android is. I laughed and told him to stfu
That's funny, obviously the right response there. In the finance world where the results of the carriers is talked about - they constantly talk about and bemoan how the iPhone's are costing them much more money than other phones and they want any way to get people off of them. At this point customers will drive it all, but any option the carriers have to push folks to other phones - expect them to do it.
The only ones whose panties are tied in a bunch are the short-termists and day-traders.
A fantastic long-term buying opportunity that some of have been gleefully waiting for!
Quote:
Originally Posted by AppleInsider
Investors on Tuesday expressed concern that iPhone activations at AT&T had dropped 43 percent quarter over quarter, but one analysis notes that iPhone activations in the U.S. have historically dropped the quarter after a product launch.
Not to mention, of course, that the previous quarter was the Christmas quarter and sales were miles ahead of even the most optimistic projections.
For consumer products, sales ALWAYS drop between the Christmas quarter and the Jan-Mar quarter.
They tried this 2 years ago with the iPad. They compared the Jan-Mar quarter to the previous Oct-Dec quarter and there were all sorts of reports about how the iPad's sales were disappointing because they had declined quarter over quarter. It didn't matter that they were up 100% from the previous Jan-Mar quarter.
I am becoming convinced that people are intentionally manipulating Apple stock. Previously, I just wrote it off to ignorance, but it's becoming too obvious and too frequent to be purely ignorance.
Quote:
Originally Posted by Sasparilla
Its important to remember, in relation to AT&T numbers, that AT&T in January stopped allowing customers to upgrade their iPhone's at a reduced price (I think $200) before their contract was up - which they did previously. Now they have to pay the retail price for the iPhone if they want to upgrade early or wait until their 2 years is up.
This might explain why the AT&T numbers are significantly lower than the Verizon numbers. Either way all the carriers want to drive activations to other phones as the iPhone 4S costs them more than the other phones.
Could be part of it. The biggest part, though, is simply the calendar.
Ok, you seem to understand a phone is all about software.
Nope, you really do not get it. While the cloner companies push spec sheets, Apple pushes features. Some may be hardware, but mostly features are software. Software is what truly makes phones unique.
Hmm, most of this analysis seems nonsensical as Apple have increased their share of the carriers sales relative to Android. If the carriers are complaining about the iPhone subsidy then, it would seem Apple should call their bluff (probably AT&T's bluff) and drop from that network. The iPhone would still be on far more carriers than a year or so ago, in the US.
Whats the complaint again? People don't have unlimited data plans. iPhone plans last a few years. Ergo per month take is $100 per iPhone user, and the subsidy is removed in a fee months. If they had capital costs to make the networks better that's sunk by now. And iPhone users browse more than Android users, I wonder are they even doing the maths right.
As for the number of worldwide iPhones sold it should increase because the 4S was released in many more countries this Q.
Quote:
Originally Posted by Sasparilla
Its important to remember, in relation to AT&T numbers, that AT&T in January stopped allowing customers to upgrade their iPhone's at a reduced price (I think $200) before their contract was up - which they did previously. Now they have to pay the retail price for the iPhone if they want to upgrade early or wait until their 2 years is up.
This might explain why the AT&T numbers are significantly lower than the Verizon numbers. Either way all the carriers want to drive activations to other phones as the iPhone 4S costs them more than the other phones.
really? why is my wife's iphone eligible after only 18 months?
but she's waiting for the liquid terminator iphone and keeping hers
Quote:
Originally Posted by al_bundy
really? why is my wife's iphone eligible after only 18 months?
but she's waiting for the liquid terminator iphone and keeping hers
They were talking about AT&T eliminating upgrades on the iPhone until 2 years is up on CNBC this morning but it seems the newscasters were over doing it there. I found a Reuters article and this is what it says:
"reducing smartphone sales by tightening their upgrade policies since they were weighed down by hefty subsidies for iPhone in fourth quarter, when the latest model hit stores."
So if you have an early upgrade opportunity consider yourself lucky as you are a customer that they want to take care of. But overall they are significantly reducing them and is one of the reasons they have given that their profits were up significantly.
Here's the article:
http://www.reuters.com/article/2012/04/24/att-idUSL3E8FO8YY20120424
That begs the next question, which is do you go for the 4S or do you wait for a 5?
Originally Posted by Sasparilla
Its important to remember, in relation to AT&T numbers, that AT&T in January stopped allowing customers to upgrade their iPhone's at a reduced price (I think $200) before their contract was up - which they did previously. Now they have to pay the retail price for the iPhone if they want to upgrade early or wait until their 2 years is up.
I just checked my account and it TOO is eligible for upgrade at 18 months, but the second iPhone on the account (family plan) won't upgrade until the full two years. We tend to only upgrade one phone at a time keeping the newest one, so when the next iPhone releases, we will upgrade the iPhone 4 (32G), keeping the iPhone 4S (32G) and getting a new iPhone (5?). Always remember that AT&T can, and has in the past, decided to allow upgrades, at one year as a way to move the installed base forward and locking in contracts for another year. There is really no reason for it to allow such in the middle of a product cycle. WIth the next iPhone getting LTE, AT&T may well want to move as many users as possible over to the newer technology due to improvements in overall data bandwidth, due to improvements in not only the speed of LTE, but the efficiency with which it uses spectrum. Of course, I may totally wrong regarding that possibility.
david
Quote:
Originally Posted by Brian Ward
Is anyone really surprised? .......<<blah blah blah >> ... my contract was up so I got the 64GB version and sold it immediately for about a $550 profit. I bought another 64GB version back again a month later for that same profit number. <<blah blah blah>> ....Come on Apple!
LOL. You just explained to us why your analysis of the iPhone, its capabilities, and its desirability is pure nonsense.
Quote:
Originally Posted by anantksundaram
The only ones whose panties are tied in a bunch are the short-termists and day-traders.
A fantastic long-term buying opportunity that some of have been gleefully waiting for!
Looking at the volume numbers, a lot of people had that very thought on April 10, and have lost huge amounts of money. Billions of dollars so far.
Quote:
Originally Posted by bullhead
Nope, you really do not get it. While the cloner companies push spec sheets, Apple pushes features. Some may be hardware, but mostly features are software. Software is what truly makes phones unique.
Apple has excellent hardware. If not for the software, a lot of folks would be very happy with Apple products.