AT&T stores recommending RIM over the iPhone

[AppleInsider]

In resuming its coverage of Apple, JMP Securities has issued a note warning of slower growth due to global economic factors and indicating that AT&T retail stores were quick to recommend RIM BlackBerry phones over the iPhone 3G, particularly for email.

Little room for upside surprises

The firm assigned Apple a Market Perform rating, citing new product cycles for the iPhone 3G and new iPods released this week but also noting a deceleration in year over year growth and warning that margins "appear to be near peak levels."

In a summary that referenced the slow selling Lisa from the early 80s and the Newton from the mid 90s, JMP stated, "Our concern with AAPL stock is that we believe there is little room for upside surprises."

The note also reported, "For the last 11 quarters management has given forward revenue guidance, Wall Street’s consensus has always been above that guidance, and for the most part the company has reported slightly above that consensus estimate."

Retail store reports

The firm performed checks at 31 Apple, 8 Best Buy, and 11 AT&T retail stores. Apple retail employees reported a "a slowdown from the initial frenzy" in iPhone 3G sales, with only 10% of stores remaining sold out of inventory. Best Buy reported steady sales with normal inventory levels.

At eleven AT&T stores it visited, JMP found that employees were twice as likely to initially recommend a BlackBerry Curve or Pearl over the iPhone when asked to suggest a "phone to access the Internet and check email."

When asked specifically about email, employees would consistently suggest a BlackBerry first. When browsing the web was mentioned, AT&T stores would always recommend the iPhone first.

Year over year performance

While Apple has seen accelerating its year over year revenue growth in every quarter from the March 2007 quarter (21% growth) through March 2008 quarter (43%), JMP notes that the latest June quarter saw only 38% growth over the previous year ago quarter. The firm sees revenue growth slowing again in the September quarter, and is modeling for 31% growth over last year's record revenues.

JMP also warned that in terms of operating margins, Apple's year over year growth has fallen or remained flat, although margins over the last year have stayed in a tight range from 17.2% to 19.2%, excluding the December 2007 quarter, which saw 21.1% operating margins.

Product lineup

"Apple has done an exceptional job of gaining [Mac] market share over the last several years," JMP noted, although it continued by saying, "Given the deteriorating macroeconomic environment, we believe it is unlikely that Apple will be able to match the 2007 feat in 2008."

Among iPods, the report highlighted that Apple's year over year average sales growth over the last four quarters have slowed to "a leisurely 9%, well below the double-and triple-digit growth enjoyed a few years ago." The firm noted that high end iPod sales are being replaced by iPhones, "leaving a skew to lower-end shuffle and nano products."

JMP called the iPhone a "hit product" that caught Nokia, RIM, Motorola, Palm and Samsung "flat-footed," but noted competitors are working to make "notable changes in strategy to deal with the iPhone."

"Samsung and LG have started to roll out iPhone 'clones' with touch screens, like the Samsung Instinct and LG Dare. While we believe these phones are not as good as the iPhone, we believe they have caused pricing issues," the report stated.

Apple in the overall economy

JMP also warned that Apple's stock is looking expensive in comparison with other large-capitalization technology stocks, stating, "We note that Apple has been growing much faster than its comparable companies, though many have higher margins."

The firm also stated "Because Apple has invested heavily in its own chain of retail stores, an overall economic slowdown or slowing demand for the company's products will not only affect sales growth but also impact profit margins due to the fixed-cost nature of the retail stores."

It further warned "As iPods and other music sales become a greater percentage of sales, Apple may experience pressure on overall gross margins because those products carry a lower gross margin." In its own earning reports, Apple noted that rapidly growing sales in the iTunes Store were getting large enough to have a downward impact on the company's overall margins, as it runs the music store primarily to make content available to its users, rather than to claim huge profits.

[joelesler]

Isn't that going to be largely subjective upon the sales person? Of course AT&T is going to recommend the Blackberry. The service costs more (59.99 IIRC). -- If I am wrong, I am wrong.. but it makes sense from a business standpoint. Whether it's right or not is a different matter.

[joelesler]

(I would delete this comment, but seeing as how I am apparently unable to find the delete button. Fail)

[macFanDave]

If AT&T is steering customers away from the iPhone, does Apple have to keep the exclusivity (monopoly) arrangement with them?

That just doesn't sound right. Apple would be pretty stupid to enter into an agreement with a partner who can put their product on the back burner. They've done stupid things before, but I'd be hard pressed to believe that they would enter into such a dumb agreement.

I think that many American customers would be thrilled to get an iPhone from a service provider they actually like (or hate the least )

[GT500Shlby]

Do these "Analysts" have anything better to do? Seriously. Everything they state is like "Duhhh, Captain Obvious"

Business Majors should not be allowed anywhere near tech.

[roehlstation]

Originally Posted by macFanDave

If AT&T is steering customers away from the iPhone, does Apple have to keep the exclusivity (monopoly) arrangement with them?

That just doesn't sound right. Apple would be pretty stupid to enter into an agreement with a partner who can put their product on the back burner. They've done stupid things before, but I'd be hard pressed to believe that they would enter into such a dumb agreement.

I think that many American customers would be thrilled to get an iPhone from a service provider they actually like (or hate the least )

More than likely the AT&T Reps aren't trying to talk anyone out of an iPhone, likely what is going on is someone asks a question about which handles email better....blah blah, and so AT&T reps just make the recommendation, right now with the Mobile Me issues, the RIM mail solution is just more reliable at this time. Mail on the iPhone is fine for what I do, but ther are a lot of features that some may want that right now is something handled better on a Blackberry, just from the network standpoint.


and on another note.
I've seen the word "Monopoly" thrown around a lot in the last few months and am frustrated because most of what people are talking about would not at all fit the textbook definition of Monopoly. Besides that, Monopolies are NOT illegal, anti-trust practices are.

[nagromme]

From one perspective, AT&T would be stupid to ever recommend an iPhone, and Apple isn't much hurt by recommendations to get a BlackBerry. Because people seem to have been buying all the iPhones Apple can make, regardless. Every iPhone AT&T sells to one person is a lost sale to another person who wants one and walks away. My local AT&T store told me that some days they have them in stock, some days not. Still after all this time.

So, may as well offer the person a BlackBerry first. If they take it, that's a sale, AND they can still sell the iPhone to someone else.

Now, that availability balance may be settling with time, but so far, I bet AT&T's actions haven't reduced iPhone total sales much if it all.

[hittrj01]

Originally Posted by macFanDave

If AT&T is steering customers away from the iPhone, does Apple have to keep the exclusivity (monopoly) arrangement with them?

That just doesn't sound right. Apple would be pretty stupid to enter into an agreement with a partner who can put their product on the back burner. They've done stupid things before, but I'd be hard pressed to believe that they would enter into such a dumb agreement.

I think that many American customers would be thrilled to get an iPhone from a service provider they actually like (or hate the least )

AT&T does not HAVE to push the iPhone on everybody. They have contracts with other companies, such as RIM, Samsung, LG, etc. No, these other companies are not exclusive, but they do bring revenue into AT&T just like Apple does. Being an iPhone fan, if I were working at an AT&T store I would certainly show customers the benefits of the phone, but if there is a salesman that prefers a Blackberry or a Windows Mobile phone over an iPhone, he/she is most likely going to recommend those to customers. Unless I'm mistaken, there is nothing in the contract explicitly stating that AT&T must push the iPhone, but they shoud recommend it at least as often as their other phones in order to be a good business partner, and the fact that they recommend it hands down for web browsing sounds like they are at least putting it out there as often as Blackberries and other phones. I understand your wishful thinking of trying to get the iPhone on other carriers, I'd rather deal with anybody other than AT&T too, but AT&T is not doing anything wrong, and they have every right to recommend a Blackberry to someone they think would rather have a Blackberry.

[Booga]

Originally Posted by macFanDave

If AT&T is steering customers away from the iPhone, does Apple have to keep the exclusivity (monopoly) arrangement with them?

That just doesn't sound right. Apple would be pretty stupid to enter into an agreement with a partner who can put their product on the back burner. They've done stupid things before, but I'd be hard pressed to believe that they would enter into such a dumb agreement.

I think that many American customers would be thrilled to get an iPhone from a service provider they actually like (or hate the least )

I'm glad AT&T is being honest with their customers. I'm an iPhone 3G (and iPod Touch) owner, and have a BlackBerry through work. No question that the interface is better on the iPhone, but the overall email experience is still better on the BlackBerry. (Just as there's absolutely no question that browsing is vastly better on the iPhone.) If I had to give one up it would be the BlackBerry in an instant, but if email were my #1 priority by any significant margin that might not be true.

[SteveLV702]

I have a 16GB iPhone 3G - White for personal use and a Blackberry Curve 8320 for business and I would never recommend the crapberry. Not only does it go super slow on the net (edge) edge on crapberry was slower then the edge on my first gen iPhones edge. But also the web browser totally stinks and so does the email client... I would rather get a windows mobile phone over the crapberry. My work is gonna give me the Blackberry Bold once its released hopefully its better otherwise they will see about developing our software for the iPhone then I would just be able to get another iPhone for work and use it cause its freaking awesome.

[wbrasington]

If I'm reading this right, we've all just be sucked in to another Appleinsider attempt at higher clicks.

AT&T

If you ask to browse the web, they recommend the iPhone.
If you ask to do email, they recommend Blackberry.

For these two parts.... who is surprised?

If you ask about both, you get some ratio of sometimes iPhone and sometimes Blackberry.

Who is surprised.

Gawd....... do you actually expect AT&T would NEVER recommend one or the other?

You could leave the entire story the same, and not change a single word, but change the title to:

AT&T stores recommend the iPhone over RIM

Gee, I wonder why they did it this way, just trying to tease the monkey?

[echosonic]

I will never understand how some f-Tard wall street Face-Rapist gets away with dumping all over AAPL and nobody kicks him in the taint for making statements like:

"Our concern with AAPL stock is that we believe there is little room for upside surprises."

And then following them up with data like:

"While Apple has seen accelerating its year over year revenue growth in every quarter from the March 2007 quarter (21% growth) through March 2008 quarter (43%), JMP notes that the latest June quarter saw only 38% growth over the previous year ago quarter. The firm sees revenue growth slowing again in the September quarter, and is modeling for 31% growth over last year's record revenues."

That's right, he said "ONLY 38% GROWTH."

How in Holy Fuckdom do you call yourself a "Securities Firm" whilst perpetrating such ass-hattery?

Tell me how many publicly-traded companies can project a 31% increase in profits YOY with 99% certainty, and become shat upon by these stinky-fingered dinks?

They are a bunch of idiot-ass-munching market-manipulating sons-of-whores and should all have their asses removed.

[dm3]

This story seems to repeatedly contradict itself. Making a negative statement based on positive sounding information. Overall sounds very negative while sighting lots of positives. I'm confused.

As an example, at the end, it says

It further warned "As iPods and other music sales become a greater percentage of sales, Apple may experience pressure on overall gross margins because those products carry a lower gross margin." In its own earning reports, Apple noted that rapidly growing sales in the iTunes Store were getting large enough to have a downward impact on the company's overall margins, as it runs the music store primarily to make content available to its users, rather than to claim huge profits.

Meanwhile earlier it complained that ipod sales were stalling.

Among iPods, the report highlighted that Apple's year over year average sales growth over the last four quarters have slowed to "a leisurely 9%, well below the double-and triple-digit growth enjoyed a few years ago." The firm noted that high end iPod sales are being replaced by iPhones, "leaving a skew to lower-end shuffle and nano products."

So how can you have it both ways. iPods are greater percentage of sales, yet iPod sales it slowing?

Everyone knows Mac sales are exploding.

Great news is cast in a negative light,

The firm performed checks at 31 Apple, 8 Best Buy, and 11 AT&T retail stores. Apple retail employees reported a "a slowdown from the initial frenzy" in iPhone 3G sales, with only 10% of stores remaining sold out of inventory. Best Buy reported steady sales with normal inventory levels.

Did they really expect the "initial frenzy" to continue? 10% of the stores remain sold out?! Thats either great because it shows incredible sustained high demand, or still great because they've improved their supply channel to keep up with demand.

Etc. etc. I always wonder why analysts love to bash apple. I wish there was reporting that was less colored one way of the other. Just facts without so much commentary.

[solipsism]

Originally Posted by macFanDave

If AT&T is steering customers away from the iPhone, does Apple have to keep the exclusivity (monopoly) arrangement with them?

That just doesn't sound right. Apple would be pretty stupid to enter into an agreement with a partner who can put their product on the back burner. They've done stupid things before, but I'd be hard pressed to believe that they would enter into such a dumb agreement.

I think that many American customers would be thrilled to get an iPhone from a service provider they actually like (or hate the least )

From the quoted sentence below it doesn't really sound like they are shunning the iPhone.

Originally Posted by Appleinsider

When asked specifically about email, employees would consistently suggest a BlackBerry first. When browsing the web was mentioned, AT&T stores would always recommend the iPhone first

.
Though I don't necessarily agree with recommending the recommending a BB just because someone says email. If it's Exchange, sure, but with more and more people going into smartphones there is more of a likelihood that they need a phone with a good web browser. Hotmail/MSN and Yahoo customers all check their email from the web, unless the they have paid accounts which allow for POP access. Many of these people also use other web-based email services, like Facebook and MySpace, for daily correspondence.

It's also possible that AT&T supply is still quite strained so that there is no stock immediately available for purchase or that it's rampant popularity means that they don't have to push the device like the do other smartphones. It could mean that the people doing these survey are simply coming in business attire which is giving the CSR an impression of what they think the customer might want. If we do the some survey with a bunch of teenagers I'd think the results would be quite different.

[wbrasington]

Originally Posted by echosonic

I will never understand how some f-Tard wall street Face-Rapist gets away with dumping all over AAPL and nobody kicks him in the taint for making statements like:



And then following them up with data like:



That's right, he said "ONLY 38% GROWTH."

How in Holy Fuckdom do you call yourself a "Securities Firm" whilst perpetrating such ass-hattery?

Tell me how many publicly-traded companies can project a 31% increase in profits YOY with 99% certainty, and become shat upon by these stinky-fingered dinks?

They are a bunch of idiot-ass-munching market-manipulating sons-of-whores and should all have their asses removed.

Said with the proper amount of dignity required in the current situation.

[Foo2]

Originally Posted by echosonic

I will never understand how some f-Tard wall street Face-Rapist gets away with dumping all over AAPL...

But what do you really think about it?

[JeffDM]

Originally Posted by joelesler

Isn't that going to be largely subjective upon the sales person? Of course AT&T is going to recommend the Blackberry. The service costs more (59.99 IIRC). -- If I am wrong, I am wrong.. but it makes sense from a business standpoint. Whether it's right or not is a different matter.

Is that just for BB service, as in no voice? I pay 69.99, not counting "taxes" and "fees".

Originally Posted by macFanDave

If AT&T is steering customers away from the iPhone, does Apple have to keep the exclusivity (monopoly) arrangement with them?

If that's monopoly, then every carrier is guilty of it. Every carrier gets exclusive versions, even if it's an exclusive color. Instinct is exclusive to Sprint, are you not going to complain about that, or is it just a double standard on your part?

Also, it's not in any legal definition of monopoly, I wish people would with throwing the word out as it actually applies to the situation in any non-retarted sense.

I think that many American customers would be thrilled to get an iPhone from a service provider they actually like (or hate the least

There are only two carriers in the US of any significance that offer GSM service.

[iVlad]

LOL this article is funny. Of course Apple is gonna have a slow down of sales. Any product does this. After release it goes down, because everyone already bough it. Blackberry needs to compete harder with iPhone and AT&T employees know nothing about their phones anyway, why do you think Apple makes so many iPhone ads showing how to use iPhone and what it does.

[Hal 9000]

Originally Posted by joelesler

Isn't that going to be largely subjective upon the sales person? Of course AT&T is going to recommend the Blackberry. The service costs more (59.99 IIRC). -- If I am wrong, I am wrong.. but it makes sense from a business standpoint. Whether it's right or not is a different matter.

Has anyone had any luck with actually setting up an exchange account on your iPhone? The apple tutorial really sucks. No doubt setting up Exchange email is a big issue for corporate users.

[quinney]

Originally Posted by AppleInsider

In a summary that referenced the slow selling Lisa from the early 80s and the Newton from the mid 90s, JMP stated, "Our concern with AAPL stock is that we believe there is little room for upside surprises."

This type of statement is necessary to indoctrinate investors with the idea that AAPL
will not have upside surprises. After a period of indoctrination, it is much more
likely that people will be able to actually be surprised by good results. This factor,
along with new products and the alleged short positions of some hedge funds, could
set the stage for an explosive rally later this year. (took my pangloss pills this morning)

[C6Fan]

I'm not surprised. The AT&T employees i spoke with were pissed at what they said was AT&T's intentional shorting of supply of iPhones to screw them out of commissions. Apple stores had them in stock but you had yo order one and wait a week to 10 days from AT&T. Apple doesn't pay sales reps commission according to the AT&T employees but AT&T does. When you can sell all you can get a plentiful supply would mean big $$ for the AT&T sales force.

No wonder they recommend something they have in stock!

[Booga]

Originally Posted by C6Fan

I'm not surprised. The AT&T employees i spoke with were pissed at what they said was AT&T's intentional shorting of supply of iPhones to screw them out of commissions. Apple stores had them in stock but you had yo order one and wait a week to 10 days from AT&T. Apple doesn't pay sales reps commission according to the AT&T employees but AT&T does. When you can sell all you can get a plentiful supply would mean big $$ for the AT&T sales force.

No wonder they recommend something they have in stock!

The stocking issue was definitely weird around here. When I got my iPhone 3G a month ago, AT&T stores were quoting anywhere from 7-30 days of waiting list depending on the location. I walked into the Freehold Apple Store and bought one the next morning without waiting in line or anything. I think Apple and AT&T both lost out on some sales over that one, but probably not too many. In the end I suspect most people who went out to buy an iPhone 3G eventually bought an iPhone 3G. (I'm certainly seeing them everywhere around here.)

[Oh Blah Dee Blah Dah]

RE: "... The firm noted that high end iPod sales are being replaced by iPhones, "leaving a skew to lower-end shuffle and nano products. ..."

======================
The iPhone is an iPod

Apple has the entire mobile music segment covered with its iPods. Here's how:

1. iPod Shuffle - mobile music basic device
2. iPod Nano - mobile music, video, and games
3. iPod touch - mobile music, video, games, and PDA
4. iPod iPhone - mobile music, video, games, PDA, and phone

As you can see from the above, the iPhone is really an extension of the iPod product line; it's an iPod with a PHONE. So Apple can satisfy anyone who wants mobile music. You can pay the lowest price and get an iPod Shuffle, or you can get the most features when you get the iPod iPhone.

The Apple mobile music product line competes against MP3 players, against PDAs, and against mobile phones.

The iPod line is not suffering from declining sales. iPod sales are actually INCREASING with the addition of the iPod iPhone.

Most importantly, the iPod product line has an increasing average Average Selling Price per Unit because of the higher price paid to Apple for the iPod iPhone. If every iPod sale was replace by an iPod iPhone, Apple would be successful beyond even its own wildest dreams.

[teckstud]

Doesn't sound like many corporations will be opting to change to iPhones after reading this.
Most use smart phones primarily for email purposes not to web surf.

[alansky]

Anyone who walks into an AT&T store asking for a smartphone recommendation is not the kind of customer Apple is likely to win over. Anyone with half a brain already knows about the iPhone and whether or not they want one. Everybody else? Who cares!

[wbrasington]

Originally Posted by teckstud

Doesn't sound like many corporations will be opting to change to iPhones after reading this.
Most use smart phones primarily for email purposes not to web surf.

I think any corporations that walk into an AT&T store and base their choice on what they're told..... will resemble your remark.

[LookingUp]

Originally Posted by teckstud

Doesn't sound like many corporations will be opting to change to iPhones after reading this.
Most use smart phones primarily for email purposes not to web surf.

Eventually, EVERYONE who likes their iPod and uses a cell phone will switch to iPhone. Only a matter of time, IMO

Excellent timing to push the stock price down.

[teckstud]

Originally Posted by wbrasington

I think any corporations that walk into an AT&T store and base their choice on what they're told..... will resemble your remark.

Word of mouth spreads and if this is true as some actual posts here are confirming and agreeing to, then it won't be adopted by corporations and has nothing to do with a "walk into an AT&T store".

[Walter Slocombe]

Originally Posted by echosonic

I will never understand how some f-Tard wall street Face-Rapist gets away with dumping all over AAPL and nobody kicks him in the taint for making statements like:



And then following them up with data like:



That's right, he said "ONLY 38% GROWTH."

How in Holy Fuckdom do you call yourself a "Securities Firm" whilst perpetrating such ass-hattery?

Tell me how many publicly-traded companies can project a 31% increase in profits YOY with 99% certainty, and become shat upon by these stinky-fingered dinks?

They are a bunch of idiot-ass-munching market-manipulating sons-of-whores and should all have their asses removed.

Contender for post of the year!

Stinky fingered dinks.. that will stay in my head for months!

[monstrosity]

That was the biggest pile of shite I have ever read.

[aaarrrgggh]

Originally Posted by wbrasington

Said with the proper amount of dignity required in the current situation.

Funny, I was thinking the same thing. Not quite sure where 31% growth fits in with "market perform" "in these difficult macroeconomic times."

Apple may very well not sell 3MM macs, 5MM iPhones, and 15MM iPods. They are still seeing solid sales which should easily out-perform their peers. They will also continue to operate at higher margins than peers, but adjust them downward to maintain growth as consumer purchasing power is reduced and the effect of the weak dollar diminishes in ROW sales.

As much as the current share price scares me shitless, I am still quite happy owning a small part of the company and know that I will be rewarded over time. OK, so it might not double this year. I'd be plenty happy with it ending up even for the year... despite huge increases in cash reserves and revenue.

[monstrosity]

Growth? Just wait till the MB & MBP are revised...

[dancm2000]

The wife needed a smart phone, and since we have different tech tastes, I wanted this to be all her decision. I didn't push her get an iPhone like me. Being a marriage vet, I knew that if I pushed her to get an iPhone, and she didn't like it, it was gonna be my fault. So when we walked into the AT&T store, I asked the salesperson specifically to "make the case for a non-iPhone."

His reply: "There is none. Get an iPhone".

I was actually perturbed because all she needs is work email and calendaring. I tried to play the RIM advocate, but the salesman was countering my every point.

"Data plans are the same price"

"The keyboard is actually faster once you learn"

"The Blackberry browser is limited"

"If your office isn't set up right, webcal will be the best calendaring option anyway. Good luck using a webcalendar on a Blackberry."

[Constable Odo]

Telling customers to buy a BlackBerry for email seems perfectly logical since the BlackBerry is sort of legendary for sending and receiving email. The texter's dream machine. I don't know about recommending it for anything else, though. I would figure that AT&T salespeople would be just concerned about making a sale whether it's a BlackBerry or an iPhone.

I would think if the customer asked for a handset with good browsing capabilities, the salesperson would recommend the iPhone. That seems fair enough. If the customer walked and said he wanted an iPhone and the salesperson lied about the merits of the iPhone to get the customer to purchase a BlackBerry, then that wouldn't be right.

If I was an impartial salesperson, I would do my best to sell the handset that was most suitable for the customer.

[HollandX]

Originally Posted by solipsism

Though I don't necessarily agree with recommending the recommending a BB just because someone says email. If it's Exchange, sure

What's wrong with the Exchange service on the iPhone? I have Curve with Exchange now, but wanted to switch to iPhone once my contract was up...

Thanks.

[wilco]

Originally Posted by echosonic

I will never understand how some f-Tard wall street Face-Rapist gets away with dumping all over AAPL and nobody kicks him in the taint for making statements like:



And then following them up with data like:



That's right, he said "ONLY 38% GROWTH."

How in Holy Fuckdom do you call yourself a "Securities Firm" whilst perpetrating such ass-hattery?

Tell me how many publicly-traded companies can project a 31% increase in profits YOY with 99% certainty, and become shat upon by these stinky-fingered dinks?

They are a bunch of idiot-ass-munching market-manipulating sons-of-whores and should all have their asses removed.

Are you retarded?

[pmjoe]

Given that the iPhone Mail client is buggy, I wouldn't recommend it either. I've already given up on it as a reliable way to check my e-mail, and only futz with it when I have 10-15 minutes to get it to work.

Kind of sad because it worked great on the iPod touch under 1.x.

[solipsism]

Originally Posted by HollandX

What's wrong with the Exchange service on the iPhone? I have Curve with Exchange now, but wanted to switch to iPhone once my contract was up...

My comment was more about new people to the smartphone market asking for the ability to check their free mail may need to use a web browser to do so. From what I've read Apple's first attempt at getting ActiveSync on the iPhone is pretty good, but it is missing some features that BB and WinMo users may require. For instance, the BB has copy/paste functions.

Here is as site that looks to cover the limiations of ActiveSync on the iPhone at this point. Note: Some of these may be gone after Friday.

• http://mobilitytoday.com/news/008688...nge_bug_iphone

[Retrogusto]

it seems that the JMP analyst isn't seeing the bigger picture, as a number of people have noted here.

Yes, the iPhone will cannibalize some iPod sales, since it is essentially an iPod plus extra features. Apple didn't have much choice, because if they didn't do this somebody else would have--several music-playing phones existed well before the first iPhone. Apple just does it a lot better. If they sell lots of iPhones, as seems to be the case, of course this will probably cut into the number of iPods they sell, but that's nothing to worry about. It's really just more iPods, as others have noted, and it will also probably cut into the sales of music players from other manufacturers. And it will also expand the market--some poeple who never would have bought an iPod will buy an iPhone for other reasons, of which many exist.

Also, Mac sales have been growing a lot, so this should help balance out any decrease in margins caused by selling more music players, especially if there's a "deceleration" in growth.

I was surprised when the iPhone first came out and I saw that AT&T was doing very little to promote them in their stores, but 1) they don't want to anger their other partners, and 2) they are probably paying a higher subsidy for the iPhone than what they pay to other phone manufacturers, so if somebody is likely to sign up for AT&T anyway, they might make more money off somebody buying a BlackBerry or other smartphone.

This is funny: "We note that Apple has been growing much faster than its comparable companies, though many have higher margins." Margins mean very little when considered outside of the bigger picture. Sure, Microsoft has amazing margins, but the share price has barely moved in the last decade, whereas Apple has gone through the roof. Why? Growth is much more important. If Apple sold 5 trillion songs on iTunes tomorrow, it would drastically reduce their margins, but would that mean you should dump the stock?

This is also puzzling: "Because Apple has invested heavily in its own chain of retail stores, an overall economic slowdown or slowing demand for the company's products will not only affect sales growth but also impact profit margins due to the fixed-cost nature of the retail stores." I agree that a slowing demand for the company's products would affect sales growth (duh) and therefore margins, but I don't know why he says "an overall economic slowdown or..." If there is no slowing demand for the company's products, an overall slowdown might even help Apple, since prices for labor, rent, materials, etc. could decrease. And I think we are far from seeing a slowdown in demand for Apple's products--worst case scenario for the foreseeable future seems to be that demand keeps increasing, just not as fast as it was increasing.

I could go on and on, but the point is that I'm puzzled why people seem to need to find a negative spin to everything. This doesn't reflect on Prince McLean-Dilger, of course, he's just the messenger here and a very smart one at that.

[McDave]

Originally Posted by Booga

I'm glad AT&T is being honest with their customers. I'm an iPhone 3G (and iPod Touch) owner, and have a BlackBerry through work. No question that the interface is better on the iPhone, but the overall email experience is still better on the BlackBerry. (Just as there's absolutely no question that browsing is vastly better on the iPhone.) If I had to give one up it would be the BlackBerry in an instant, but if email were my #1 priority by any significant margin that might not be true.

I don't own a blackberry and have never used one so can someone explain to me why it's so much better?

McD