Apple forecast to sell as many as 5M T-Mobile iPhones in first year
With the iPhone officially coming in 2013 to T-Mobile USA, the fourth-largest carrier in the U.S., one analyst has projected that the deal will add nearly 5 million sales for Apple.
Amit Daryanani with RBC Capital Markets said in a note to investors on Thursday that with about 33 million subscribers on T-Mobile, Apple could sell about 4.8 million iPhones in the first year.
He noted that Sprint, which is the third-largest carrier in America, sold 6.3 million iPhones in the first year of availability. That represented about 20 percent of the total number of postpaid subscribers at Sprint.
Of T-Mobile's 33 million subscribers, about 70 percent of those are postpaid. That means there are about 24 million postpaid subscribers that Apple could target.
Assuming the same 20 percent of those buy an iPhone that did so on Sprint, that puts Apple in line to sell 4.8 million units in the first year. As such, Daryanani had projected that the addition of T-Mobile USA as an official carrier partner will net Apple between 4 million and 5 million more iPhone sales.
He assumes those iPhones sold to T-Mobile customers would have an average selling price of about $600 and gross margins around 50 percent. that would add more than 60 cents to RBC's projected $50 earning-per-share estimate for Apple's fiscal year 2013.
T-Mobile's parent company, Deutsche Telekom, announced earlier Thursday that it has reached an agreement with Apple to begin selling the company's products in America next year. Though specific products were not mentioned, the company's CEO later confirmed that its U.S. branch will indeed begin selling the iPhone next year with a "dramatically different" experience for customers.
According to GigaOm, that experience will entail T-Mobile's unsubsidized "Value Plans," which will feature cheaper rates for voice and data, but will require customers to pay a larger upfront cost to buy a new phone. T-Mobile is transitioning after 80 percent of its customers last quarter opted for Value Plans.
While an unsubsidized, unlocked iPhone starts at $649 through other carriers, T-Mobile USA CEO John Legere implied that his company will lessen the burden on customers by offering a monthly finance plan, charging a flat sum up front and then a monthly fee thereafter to pay off the device in installments.
Beyond the iPhone, Daryanani believes iPad sales through T-Mobile would offer even more upside potential, particularly with the entry-level iPad mini. If T-Mobile were to add an additional 2 million in incremental unit sales, i would equate to an additional 25 cents to Apple's projected earnings per share .
RBC Capital Markets has maintained its "outperform" rating for AAPL stock with a price target of $750.
Amit Daryanani with RBC Capital Markets said in a note to investors on Thursday that with about 33 million subscribers on T-Mobile, Apple could sell about 4.8 million iPhones in the first year.
He noted that Sprint, which is the third-largest carrier in America, sold 6.3 million iPhones in the first year of availability. That represented about 20 percent of the total number of postpaid subscribers at Sprint.
Of T-Mobile's 33 million subscribers, about 70 percent of those are postpaid. That means there are about 24 million postpaid subscribers that Apple could target.
Assuming the same 20 percent of those buy an iPhone that did so on Sprint, that puts Apple in line to sell 4.8 million units in the first year. As such, Daryanani had projected that the addition of T-Mobile USA as an official carrier partner will net Apple between 4 million and 5 million more iPhone sales.
He assumes those iPhones sold to T-Mobile customers would have an average selling price of about $600 and gross margins around 50 percent. that would add more than 60 cents to RBC's projected $50 earning-per-share estimate for Apple's fiscal year 2013.
T-Mobile's parent company, Deutsche Telekom, announced earlier Thursday that it has reached an agreement with Apple to begin selling the company's products in America next year. Though specific products were not mentioned, the company's CEO later confirmed that its U.S. branch will indeed begin selling the iPhone next year with a "dramatically different" experience for customers.
According to GigaOm, that experience will entail T-Mobile's unsubsidized "Value Plans," which will feature cheaper rates for voice and data, but will require customers to pay a larger upfront cost to buy a new phone. T-Mobile is transitioning after 80 percent of its customers last quarter opted for Value Plans.
While an unsubsidized, unlocked iPhone starts at $649 through other carriers, T-Mobile USA CEO John Legere implied that his company will lessen the burden on customers by offering a monthly finance plan, charging a flat sum up front and then a monthly fee thereafter to pay off the device in installments.
Beyond the iPhone, Daryanani believes iPad sales through T-Mobile would offer even more upside potential, particularly with the entry-level iPad mini. If T-Mobile were to add an additional 2 million in incremental unit sales, i would equate to an additional 25 cents to Apple's projected earnings per share .
RBC Capital Markets has maintained its "outperform" rating for AAPL stock with a price target of $750.
Comments
Originally Posted by ankleskater
It's not even sure that T-Mobile will get the iPhone…
The article specifically says that.
Getting the iPhone is great. The "death of subsidies" will be the death of T-Mobile.
(Apple products %u2260 iPhone)
Aha, you posted from the article page, I see. U+2260… Oh! ?! That's a shame.
Quote:
Originally Posted by gwmac
Competition is always a good thing. Right now Verizon has the largest LTE map by far, but by this time next year they will not have nearly as big of an advantage as the others finish their rollout. Then people will start comparing based on price and how much data you get for the plan. If you can save $40 a month, get LTE with good coverage, and get unlimited data or even twice as much as Verizon offers that will make a lot of people at least consider switching carriers.
Your LTE map is meaningless if your service is crap.
Oh just peachy keen. Now AAPL will drop another 5% on this disappointing news.
Quote:
Originally Posted by Tallest Skil
The article specifically says that.
Getting the iPhone is great. The "death of subsidies" will be the death of T-Mobile.
It depends on the plan costs. If their prepaid plans are outpacing the others, that could mean otherwise. I also don't really expect the constant annual upgrade cycle to go on indefinitely.
Originally Posted by hmm
I also don't really expect the constant annual upgrade cycle to go on indefinitely.
Why?
Quote:
Originally Posted by gwmac
Competition is always a good thing. Right now Verizon has the largest LTE map by far, but by this time next year they will not have nearly as big of an advantage as the others finish their rollout. Then people will start comparing based on price and how much data you get for the plan. If you can save $40 a month, get LTE with good coverage, and get unlimited data or even twice as much as Verizon offers that will make a lot of people at least consider switching carriers.
Honestly, LTE is over rated. First, most people's plans on Verizon and AT&T have caps. So, the faster you go, the faster you eat through your cap. Second, you really don't need LTE speed for reading your email, surfing the web, or even streaming music.You can do all that on T-Mobile's Edge right now. LTE is nice for videos for sure, however, videos kill caps like crazy.
T-Mobile's 4G is very fast, and T-Mobile's plans are unlimited. Moreover, it is much cheaper on T-Mobile. I have two people on unlimited plans on T-Mobile for what would cost one person on AT&T. I am very excited about this announcement. T-Mobile also has value plans where you bring your own phone. Where it gets interesting is you can have T-Mobile buy the phone for you and after you make a down payment you make monthly payments. When it is paid off, the price of the plan goes back down.
Quote:
Originally Posted by Tallest Skil
The article specifically says that.
Getting the iPhone is great. The "death of subsidies" will be the death of T-Mobile.
It is a myth that subsidies hurt the carriers. Sure, the carriers take a hit to purchase the phones. For most carriers, however, the subsidies get people committed to a two year plan. Moreover, having the subsidies on phones people want keep people on the network. Since customer upgrade cycles are staggered, the hit should be manageable. T-Mobile was bleeding hundreds of thousands of customers and the most cited reason for the flight was the lack of iPhone. T-Mobile's data network is faster than Sprints, and the plans cheaper. I expect it to win lots of customers back.
T-Mobile also has interesting options in buying phones. For instance, I can get a $50 a month unlimited everything value plan from T-Mobile. I have to commit to a two year plan. Now if a hot phone comes out that I want, T-Mobile will buy the phone for me. I will pay T-Mobile a down payment, and a monthly payment on top of the $50. After the phone is paid off, the price of my plan drops back down to the $50. Companies like Verizon, Sprint, and AT&T keep the price of the plan the same even after the phone is paid off.
T-Mobile already subsidizes a lot of phones. It also does crazy one day events where it will give people the hottest phones for free in exchange for the two year contract. Lots of people got the Galaxy III on T-Mobile that way. People also mistakenly think the carriers pay full retail price for the phone. They pay the wholesale.
I am sure it differs by area, but where I live T-Mobile is the best carrier for an iPhone. T-Mobile also does data and voice at the same time like on AT&T.
Quote:
Originally Posted by Curtis Hannah
Apple could have a 2013 IPhone well I don't see Tmobile getting 5 million sold in less than 4 months especially with it could be delayed till then like this.
Your assuming T-Mobile will get the phone later in the year. The latest iPhone works on T-Mobile right now. It can't access T-Mobile's 4G currently, but to remedy that all Apple has to do is issue a firmware update to the current phone.
Apple is also smart. It needs something magically to happen every quarter. Bringing T-Mobile on board during the traditionally slow first quarter will help Apple make earnings. This is much like Apple brought Sprint on board several months before releasing a new iPhone.
T-Mobile just simply sucks all the way around. There's a reason why they're bleeding customers and its not necessarily because they didn't have the iPhone. Dropped calls galore, horrid support, overall coverage sucks, etc. They may be cheap but you get what you pay for. I've had nothing but bad experiences with T-Mobile and will never go back to them again. I'll gladly pay $20/mo more for better service. Its money well spent.
I wouldn't be surprised if this really doesn't help them with customer losses.
Quote:
Originally Posted by macxpress
T-Mobile just simply sucks all the way around. There's a reason why they're bleeding customers and its not necessarily because they didn't have the iPhone. Dropped calls galore, horrid support, overall coverage sucks, etc. They may be cheap but you get what you pay for. I've had nothing but bad experiences with T-Mobile and will never go back to them again. I'll gladly pay $20/mo more for better service. Its money well spent.
I wouldn't be surprised if this really doesn't help them with customer losses.
And please enlighten us why T-Mobile sucks more than AT&T, Verizon, and Sprint. Moreover, carrier service is largely based on where you live. In many places of Michigan, T-Mobile has superior service to AT&T. Moreover, people forget AT&T had horrible data service when the iPhone came out. The influx of customers allowed it to invest in its network.
I have been on AT&T, Verizon, Sprint, and now T-Mobile. They all suck. T-Mobile just sucks less. In my experience, the little guy tries harder. Further, T-Mobile has adopted a more European philosophy towards customer service (although it's automated service you need to use to get to the actual people stinks).
I have been on T-Mobile for three years (after leaving AT&T). The only time I have had a dropped call was when talking to friends on AT&T and the calls were dropped on their end. This has happened maybe four times in three years. Moreover, T-Mobile does not nickel and dime you on everything. The plans are mostly all inclusive. On its own initiative T-Mobile reached out to customers and asked if anybody needed an indoor tower and if they did the towers would be provided free. .I didn't need one, as my signal is fine inside. AT&T charges over a hundred dollars for this tower, and I needed one while on AT&T.
Further, you pay a lot more than $20 a month more on AT&T and Verizon UNLESS you are getting some corporate and/or government discount, but even than you pay more. Go price the plans. On AT&T and Verizon you can't get unlimited data anymore. On AT&T you pay over a hundred and thirty dollars a month for one person to get unlimited calling and texting with a cap on data. The same plan on T-Mobile costs $59 a month and you get unlimited data.
If you read the statements of T-Mobile's CEO the number one reason T-Mobile has lost customers is not having the iPhone.
Quote:
Originally Posted by TBell
And please enlighten us why T-Mobile sucks more than AT&T, Verizon, and Sprint. Moreover, carrier service is largely based on where you live. In many places of Michigan, T-Mobile has superior service to AT&T. Moreover, people forget AT&T had horrible data service when the iPhone came out. The influx of customers allowed it to invest in its network.
I have been on AT&T, Verizon, Sprint, and now T-Mobile. They all suck. T-Mobile just sucks less. In my experience, the little guy tries harder. Further, T-Mobile has adopted a more European philosophy towards customer service (although it's automated service you need to use to get to the actual people stinks).
I have been on T-Mobile for three years (after leaving AT&T). The only time I have had a dropped call was when talking to friends on AT&T and the calls were dropped on their end. This has happened maybe four times in three years. Moreover, T-Mobile does not nickel and dime you on everything. The plans are mostly all inclusive. On its own initiative T-Mobile reached out to customers and asked if anybody needed an indoor tower and if they did the towers would be provided free. .I didn't need one, as my signal is fine inside. AT&T charges over a hundred dollars for this tower, and I needed one while on AT&T.
Further, you pay a lot more than $20 a month more on AT&T and Verizon UNLESS you are getting some corporate and/or government discount, but even than you pay more. Go price the plans. On AT&T and Verizon you can't get unlimited data anymore. On AT&T you pay over a hundred and thirty dollars a month for one person to get unlimited calling and texting with a cap on data. The same plan on T-Mobile costs $59 a month and you get unlimited data.
If you read the statements of T-Mobile's CEO the number one reason T-Mobile has lost customers is not having the iPhone.
As I said, I had horrible experiences with T-Mobile. The fact that they don't nickel and dime you is BS. They all do in some way. They have traditionally shitty coverage, where I live, where I've traveled, shopped, etc. Just because you in particular have good service doesn't mean everyone does. Overall, Verizon has the best coverage and experience IMO. I've been with Verizon, AT&T, and T-Mobile and I always end up coming back to Verizon. Sure, T-Mobile is cheaper but its also a cheap POS service as well. So you get what you pay for. Cheaper doesn't mean its better.
The CEO is just covering his ass blaming the lack of an iPhone for loss of customers (which probably is partially true), however T-Mobile issues expand way beyond the lack of the iPhone.
Yay T-mobile. Please get ipad as well