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JP Morgan's US branch quashes iPhone nano report

post #1 of 28
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Just a day after one of its Taiwan analysts predicted that Apple would produce an iPhone based on the iPod nano, JP Morgan's American headquarters has dampened expectations with a second report.

The financial institution appeared to distance itself on Tuesday from bolder claims made by Kevin Chang, who reckoned that a mid-priced iPhone was due to ship by the end of 2007. Senior analyst Bill Shope noted that Chang's sources have yet to be corroborated and would contradict Apple's historical business approach of waiting until a new device becomes truly necessary for the market.

"We believe a near-term launch would be unusual and highly risky. It took Apple over two years to launch its first low-end iPod (the iPod mini)," he explained. "Not all consumers want a combined phone and music player, so Apple is likely to keep the iPhone and iPod as distinct business segments for as long as this makes economic sense."

Shope also warned investors that basing estimates on a single patent was unlikely to prove fruitful, as many of the company's patents rarely translate directly to shipping products. The iPhone, by JP Morgan estimates, was more likely to keep its existing shape and add 3G wireless Internet at a similar price in early 2008.

Chang's claims of up to 40 million of these new nano-based iPhones would also have little to no effect on present-day analysis that forecasts 44.7 million flash iPods sold in 2008, Shope said. If the lower-cost model were to reach the largest 40 million figure it would most likely cannibalize the iPod nano, a consequence the Taiwan analyst endorsed despite the artificial limitations it would impose on Apple's sales.

"The current nano business is solid," said the American researcher, "so why risk it? We struggle to understand why Apple would abandon one of its most successful product lines with a carrier-centric low-end phone. For now, it seems aggressive."

In making these conclusions, Shope and JP Morgan reiterated that the extreme dependence on the iPhone's launch success for Apple's stock value was too volatile to justify the run-up witnessed on Tuesday, and chose to hold its Neutral rating on shares until it became clear that the iPhone was helping or hindering Apple's bottom line.
post #2 of 28
Quote:
Originally Posted by AppleInsider View Post

Just a day after one of its Taiwan analysts predicted that Apple would produce an iPhone based on the iPod nano, JP Morgan's American headquarters has dampened expectations with a second report.

Well, thank goodness SOMEbody still has their brain in gear! That nano-phone report was quite implausible just on the face of it, like one of those Nigerian-funds-transfer email scams. The funniest part of this whole topic was that anyone believed it--and enough somebodies to boost the stock a couple dollars? Yikes! Sure, Apple's just going to introduce a new model that involves contravening several of its (newly-established) principles, such as no carrier subsidies for their phone products. Yeah, right.
post #3 of 28
Please, Nigeria is a sewer of immoral people looking to steal every dime from dupes in this country.

The iPhone Nano rumor makes sense to me. A lower second tier phone that has everything but video iPod and web browsing. This is exactly the phone Apple needs for those who don't want to spend a lot on their phones. Didn't the report reference a source inside the manufacturer?

You can be sure Apple is working on a phone like this. Apple's current line of iPods offers something for everyone. That's the beauty of the 3 tier line. It's no accident that they have sold so many iPods.

By the way, did anyone hear how that 1st million zunes was going for Mr. Softy?

Apple will sell a ton of the original iPhones and a ton of the iPhone Nanos. There are huge numbers of people looking for an affordable cell phone that actually works well.
post #4 of 28
I expect that there will be a cheaper iPhone model eventually, but I think this year is unlikely.

BTW: do we really know for sure that iPhone isn't subsidized? If it weren't, then I don't see a legitimate justification for the high contract cancellation fee or the fact that it's a brick when you buy it, even non-phone features don't work until it's activated. It seems to be a clever slight-of-hand, or a system designed to allow a quicker sale at the Apple store, better a couple minutes per customer at the register than ten or fifteen.
post #5 of 28
Quote:
Originally Posted by AppleInsider View Post

Just a day after one of its Taiwan analysts predicted that Apple would produce an iPhone based on the iPod nano, JP Morgan's American headquarters has dampened expectations with a second report.

I think I agree with JP Morgan on this one
- Apple will either release an iPod-Nano-based iPhone later this year, or not, whatever, who knows!


And BTW, the current iPhone may either help, or hinder, the bottom line, meaning the shares might go up or down in the near future!
post #6 of 28
I don't believe in an iPhone 'nano' for one second... not even a nano-second.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #7 of 28
Quote:
Originally Posted by JeffDM View Post

I expect that there will be a cheaper iPhone model eventually, but I think this year is unlikely.

BTW: do we really know for sure that iPhone isn't subsidized? If it weren't, then I don't see a legitimate justification for the high contract cancellation fee or the fact that it's a brick when you buy it, even non-phone features don't work until it's activated. It seems to be a clever slight-of-hand, or a system designed to allow a quicker sale at the Apple store, better a couple minutes per customer at the register than ten or fifteen.

Very few people know for sure whether or not iPhone is subsidized, but that doesn't stop most people from blathering on as if it isn't. My guess is that it is. But I can't be sure. Because I don't have access to those facts.

As far as iPhone nano goes, people are giving Apple way too little credit here. iPhone was two-and-a-half years in the making. Leopard was delayed in order to get iPhone out on time. What makes people think Apple can just slap together a smaller clickwheel version (which I'm not even sure makes sense) in six months? Great products don't come from merely copying your past successes. I'm sure Apple wants to learn as much as it can about the current iPhone and how people respond to it before they even go to the drawing board for the next version.

I'm sure eventually we'll see several different iPhone models. But they won't necessarily be just smaller or cheaper. They probably won't even be called "nano".

They will be whatever the market demands.
post #8 of 28
Quote:
Originally Posted by ajhill View Post

Please, Nigeria is a sewer of immoral people looking to steal every dime from dupes in this country.

The iPhone Nano rumor makes sense to me. A lower second tier phone that has everything but video iPod and web browsing. This is exactly the phone Apple needs for those who don't want to spend a lot on their phones.

You are ahead of the fanfare. History shows, and this is no exception, that Apple will wait until the (iPhone) market will be ready for a simple iPhone nano.

Simple stated: never.
People who don't want to spend money on hardware are of no interest to Apple, because that "niche" is already filled by zero dollar phones.

Wanting a specific product from Apple doesn't make it a healthy product.
(Mac tablet, Mac minitower, Apple PDA etc.)

Nothing to see here, move along.
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alles sal reg kom
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post #9 of 28
There's plenty to see. Don't forget AT&T let it slip that Apple was working an various iPhones for them.

     197619842013  

     Where were you when the hammer flew?  

 

MacBook Pro Retina, 13", 2.5 GHz, 8 GB RAM, 256 GB SSD

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     197619842013  

     Where were you when the hammer flew?  

 

MacBook Pro Retina, 13", 2.5 GHz, 8 GB RAM, 256 GB SSD

iPhone 5 • iPad 4 • CR48 Chromebook • ThinkPad X220

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post #10 of 28
I don't know if an iPhone nano is coming but whether it does or doesn't will say a lot about where Apple is heading.

Apple has introduced lower cost, lower feature models into the iPod line and it has undoubted helped Apple achieve dominance in that market.

Yet in computers Apple has been reluctant to go after the market share by selling low cost products. And rumors persist that Apple will eliminate their lowest cost models. But wouldn't Dell like to have Apple's profitability in computers now?

Will Apple adopt the 'Mac' business model for the iPhone or the iPod model?
post #11 of 28
An iPhone nano is inevitable so it's only a matter of when. First off, I think the JPM US retraction is absurd because they cite such lame reasons for it not happening anytime soon. I don't expect it before November but I see no reason why it could come before the holidays. First of all, it wouldn't be subsidized and secondly it wouldn't replace the iPod nano which should be updated in September or October. There are other, better reasons for delaying a lower priced iPhone, purely for marketing reasons, but I don't see any reason why an iPhone nano would hurt iPhone sales:

There would be lots of differentiation. An iPhone nano would:
Have a smaller screen
Be less expensive
Have fewer features, no WiFi, no movies

Besides, JPM has a neutral rating on AAPL which makes them really stupid in my book.
post #12 of 28
Quote:
Originally Posted by Rolo View Post

An iPhone nano is inevitable so it's only a matter of when. First off, I think the JPM US retraction is absurd because they cite such lame reasons for it not happening anytime soon.

Actually, their 2nd report (the retraction of the iPhone nano report) is probably the most logical, best laid out, dead-on accurate report I've EVER seen from an analyst on Apple. The iPhone nano report was laughable when it was released. Sadly, it was quickly picked up by the majors including CNN by last night. And this morning the morning news shows were announcing the Fall release of an iPhone nano as fact. JPM had to release a retraction. The report was foolish and was affecting Apple's stock price based on really, really lazy analysis (boarding on rumor-mongoring).

Apple will not release a lower-end iPhone until the current model iPhone sales have started to slow. And then they will wait a little longer before actually releasing a lower end model. Historically, Apple waits until they've convinced as many people as possible to buy the higher end hardware before giving them a lower priced alternative. And I also expect they will not release a lower end iPhone until they have an upgraded high-end iPhone to offer, to further differentiate the models. Finally, Apple will likely focus next on refreshing the iPod line (the video iPod is sorely in need of updates) and upcoming Mac refreshes in preparation for the school year.

But then again, I don't get paid for my screwball analysis, so what do I know?
post #13 of 28
I said it before, I'm so sick of the "analyst" thing! Ever since Apple has become the reborn darling of wall street, every Tom, Dick and Harry is an expert analyst on Apple. Jeeze, I predicted the invention of the MP3 player before ANYONE heard of an iPod! I should be getting paid to be an analyst. Lame, just lame...
post #14 of 28
There is one major oversight that hasn't been mentioned in any article here that totally nixes this rumor. Not the click-wheel patent, but the fact that the interfaces between the current iPhone and the "iPhone nano" would be different. Apple would not offer a piece of hardware that you would operate one way and then 6 months later say, "We have a smaller iPhone; but you use a virtual click wheel." That alone buries this rumor. I'm totally expecting Apple to release a different version of the iPhone as they did with the iPod line, but the interfaces would be the same.
post #15 of 28
as per the long analysis posted elsewhere.....cell phone manufactures are putting out phones everymonth, each country seems to have a different avg turnover. i think apple getting in on this cell phone thing should and probably has realized the market looks for new things every 6 months, and can't have the longer computer cycles they are used to
soooo i would think to keep things fresh they need frequent upgrades of some sort or lose out the the faster manufacturers like nokia, sony, blackberry. no with the unigue interface maybe the upgrades are all software type, if thats' the case they may keep the wolves at bay. so the basic phone doesn't change but the memory, software, firmware and price changes. e.g. the blackberry looked the same for years, a few twicks here and there, but because the backberry had a specific market they didn't need to have huge upgrade. the pearl was for consumers. what do you think enterprise turnover for blackberries or even treo is like......2-3 years????
I APPLE THEREFORE I AM
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I APPLE THEREFORE I AM
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post #16 of 28
Quote:
Originally Posted by ajhill View Post

Please, Nigeria is a sewer of immoral people looking to steal every dime from dupes in this country.



Yeah. Everything is "this country" is honey and sunlight except when those sewer people muck things up.

Quote:
Originally Posted by backtomac View Post

I don't know if an iPhone nano is coming but whether it does or doesn't will say a lot about where Apple is heading.

*snip*

Will Apple adopt the 'Mac' business model for the iPhone or the iPod model?

This is an excellent framing of the question.
I suppose I would expect Apple to go for the iPod model and release some sort of iPhone nano. But I do not expect it so soon as the retracted report. I would guess next spring at the earliest.
Progress is a comfortable disease
--e.e.c.
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Progress is a comfortable disease
--e.e.c.
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post #17 of 28
Quote:
Originally Posted by crees! View Post

There is one major oversight that hasn't been mentioned in any article here that totally nixes this rumor. Not the click-wheel patent, but the fact that the interfaces between the current iPhone and the "iPhone nano" would be different. Apple would not offer a piece of hardware that you would operate one way and then 6 months later say, "We have a smaller iPhone; but you use a virtual click wheel." That alone buries this rumor. I'm totally expecting Apple to release a different version of the iPhone as they did with the iPod line, but the interfaces would be the same.

This logic is very hard to refute.

However, I suppose they could update the iPhone to include a virtual click wheel navagation option on or before the release to the "iPhone nano." I have not experienced an iPhone yet, but I can imagine that some might like the familiarity of the click wheel even if it is virtual.
Progress is a comfortable disease
--e.e.c.
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Progress is a comfortable disease
--e.e.c.
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post #18 of 28
[QUOTE=Bageljoey;1110233]

Yeah. Everything is "this country" is honey and sunlight except when those sewer people muck things up.

QUOTE]
Thanks! Your reply was a lot more polite than mine would have been.
Now back to the main topic.....
post #19 of 28
Quote:
Shope and JP Morgan reiterated that the extreme dependence on the iPhone's launch success for Apple's stock value was too volatile to justify the run-up witnessed on Tuesday, and chose to hold its Neutral rating on shares until it became clear that the iPhone was helping or hindering Apple's bottom line.


In other words, SELL while you can!

You can't base a business valuation on "guessing" what are the iPhone sales. Either Apple and Jobs open up or the stock will take a downfall. Senior analysts will do their jobs, period.

Fanboys of the manic CEO will get all excited, but analysts will keep a cool head.

post #20 of 28
Quote:
Originally Posted by NOFEER View Post

as per the long analysis posted elsewhere.....cell phone manufactures are putting out phones everymonth...soooo i would think to keep things fresh they need frequent upgrades of some sort or lose out the the faster manufacturers like nokia, sony, blackberry.

Oh sure, and look at what that got us! We need to stop and ask WHY there is such a turnover in phones. Hmm....do you think it could be because all the other phones suck? Perhaps customers keep buying new phones because their current phone didn't live up to their expectations?

But now Apple comes along and delivers a phone that, by all accounts, is living up to the hype. I think the iPhone will have a much longer lifetime than most other phones. Just like Macs generally have a longer useful life than PCs.

And just for fun, we can draw a parallel to Apple's other business...music. The music industry complains that people aren't buying music, or that today's band's aren't able to draw loyal, paying customers. Same reason as people not being loyal to their phones...most off todays bands suck!
post #21 of 28
Apple is probably interested in selling a cheaper version of the iPhone - but not yet.
It would cannibalize sales of the real iPhone.

Next generation iPhone could make the current model(s) a cheapish alternative.

The "click wheel design" will probably disappear on the iPods - and will never be used on an iPhone.

The new line of iPods will introduce iPhone looks with the click wheel (on the big, multitouch screen) as one of its navigation types.
post #22 of 28
The retraction certainly makes more sense than the previous day's rumor, but why hasn't this report surfaced anywhere else? It's not showing on Fidelity or ETrade news. Did AI receive this directly from JP Morgan?
post #23 of 28
"Not all consumers want a combined phone and music player..."

Exactly. I don't want a stinkin' iPod. I just want a killer pocket computer that can make a phone call once in a while.

But the way Apple has integrated the technologies in the iPhone, it really doesn't make sense to try to segment them out. I also vote for the current version becoming the cheap version, and a new model staying at the $500-600 pricepoint. Maybe something with GPS and/or a modern data network.

(beer)
post #24 of 28
Quote:
Originally Posted by ouragan View Post

In other words, SELL while you can!

You can't base a business valuation on "guessing" what are the iPhone sales. Either Apple and Jobs open up or the stock will take a downfall. Senior analysts will do their jobs, period.

Fanboys of the manic CEO will get all excited, but analysts will keep a cool head.


well, anyone doing the math and recognizing the growth, as well as the economy of scale that Apple enjoys now would have by now realized that Apple will earn over $4.00 without any phone sales included. while higher earnings will be mostly margin excess - this same excess has been repeated so many times it could be a standard by now. The analysts are sitting on their hands here for lack of information = and they don't get consumer electronics format/product life cycle/momentum growth factors that re predictable with a hand calculator and a history of growth with a realization of what the life cycle will be. Blah blah - the idea that Apple will introduce a product after years of development and not follow up with a family of products in the same format is naive at best. What on earth does market share and product format and saturation mean if one doesn't take advantage of marketing mix potential and build "appropriate" products to serve everyone possible in a given market? Apple will be introducing a less expensive phone that will serve the needs of an even larger market. If they don't understand CE then they can look to Mercedes - do they introduce a flagship car and then sit on their hands and not introduce a family of cars that enjoy the same technologies for lesser markets?

but there is no rush.. as while others are squirming around trying to come up with a more integrated and better phone, Apple can just wait until they get it together and introduce theirs at the same time. Apple is in control here on format and technology and they don't have to do anything right now. It took apple X months to develop the phone - it will take the others quite a while to come out with theirs. My guess is that others are caught in a format dilemma which does not hold up to the feature demands created by the iphone. Format dilemma will produce some wild product solutions that only geeks can endure. Apple could sit on their format for a year with no additions and it might not matter - but they have no reason to do so. Apple's product format is in place and ready to expand upon within months - not years.

Leaps.. technology takes leaps that follow product formats and life cycles. the phone is a leap.... Revenues at Apple will do the same thing. These analysts are just sitting in the dark here.

The only other factor is Christmas now. The fall season, so important to a consumer electronics company, is here and put to bed at Retail already. we have not seen everything they will have for the world yet - but introducing another phone in the middle of the crazed Xmas season would only diminish the existing plan. Look for it early next year at best.

D
post #25 of 28
I've not gone back to check but I recall Steve saying the reason he was showing the phone so far inadvance had to do with FCC disclosure considerations. If Apple wants to sell a phone they have to submit it for approval and then wait.

The iPhone was submited to the FCC shortly after the MacWorld keynote and approved sometime in mid-May with just enough time to get them made and flown in for the June delivery. I continue to doubt the delay of Leopard has or had much to do with lack of resouces due to iPhone development. I think it very well may have had a lot to do with intro schedules and the medias inability to follow one story well, let alone giving iPhone and Leopard reasoned reporting if they came out too close together.

They also get to suck the wind out of everyone elses sails if they can get major media attention for rollouts every 2-3 months. I see no reason Apple won't preview the next phone 4-6 months ahead of intro if the watchers are going to know all about it from a licensing request anyway.

I expect the next bump to be a doubling or quadrupling of memory to sustain the price, hopefully 8 and 32 gigs in time for holiday sales. An intro at MacWorld of the roadmap showing us how they are progressing toward a 3g phone and more.

Even after showing us the iPhone Jobs claimed that we where in store for the best year ever for new product so I continue to hope that some great treats are in store as we move towards the tech primetime selling season.
post #26 of 28
Quote:
Originally Posted by ajhill View Post

Please, Nigeria is a sewer of immoral people looking to steal every dime from dupes in this country.

What are you talking about? Nigeria is controlled by immoral people trying to steal money from its own people. Its the majority of people, including the Secretary of the Treasury, who, with my help, is keeping these corrupt leaders from taking that money. Now, if you'll excuse me, I have a meeting with the Secretary about helping them out.
post #27 of 28
Analysts are idiots. They B.S. about the same thing rumor sites do, though they do it by making up opinions about existing rumors or patents as a real job.

-=|Mgkwho
post #28 of 28
Today I've received a very interesting mail from a source that is very close to Apple. It looks like Apple is preparing to launch a smaller iPhone model within the end of 2007.

The so-called iPhone shuffle will be available in different colors and comes in a scratch-resistant metal alloy enclosure. The size is called to be slighty smaller than the iPod nano 2G at only 0.4 inch thick. It features NO display, but the well known iPod shuffle controls, a call key and an end key as well, a shuffle-switch, a ring/silent-switch and a sleep/wake-button. It has a headset-jack on the top and a dock connector on the bottom.

The iPhone shuffle syncs with your iTunes software as you know it from it's bigger brother. The revolutionary new feature is that the iPhone shuffle will call a random entry from your phonebook when you tab the call key. But fasten your seat-belts, it's getting more interesting when you toggle the shuffle-switch: When turned on the iPhone shuffle will call a random phone number on the network. That is a great way to make new friends.

The price is rumored to be around 300 US$.

There were two images that came with that eMail:


(Click image to see a larger version)



Can't wait to get it. Good job, Apple!
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