Apple expected to offer iPhone on new U.S. carriers within a year

Posted:
in iPhone edited January 2014
Apple's worldwide single-carrier exclusivity model for each nation is seen as fleeting, as a new report suggests the iPhone could be available for carriers other than AT&T in the U.S. within a year.



In his latest note to investors, Gene Munster, senior research analyst with Piper Jaffray, takes on 14 "unanswered questions" that surround Apple. They address the company's financial guidance, the iPhone, iTunes, iPods and Apple retail stores. One prediction suggests Apple would add new iPhone carriers in the U.S. with the debut of a new product in the summer of 2010.



"For various reasons the company moved from an exclusive relationship with French wireless carrier Orange to a multi-carrier model," Munster said. "In France, the company now enjoys dramatically higher market share (in the 40 percent range vs. about 15 percent in ROW) than in countries with exclusive carrier agreements (such as AT&T in the U.S. where the iPhone has market share in the mid-teens). We believe Apple is seeing the increased unit sell-through more than offset the slightly (~10 percent) deteriorated economics per unit involved in non-exclusive agreements."



This as the iPhone 3GS has had an outstanding launch, with Apple having trouble keeping the device in stock. The Piper Jaffray report states that the new iteration of the iPhone "seems to have exceeded Apple's internal expectations." Additionally, Munster does not believe Apple will offer another model below the $99 iPhone 3G with a cheap, mass-market device. Noting that $10 basic phone models dominate markets like India, he said Apple would likely pass on that segment of the market.



The Piper Jaffray analyst is not alone in believing the iPhone could jump ship next year, as others believe Apple is looking to Verizon as a possible alternative. Even Denny Strigle, Verizon's president, has been complimentary of the iPhone this year, as his company is rumored to be fast-tracking its new 4G network for launch by early 2010. AT&T, meanwhile, is said to be continuing its negotiations with Apple, in an attempt to keep the iPhone exclusive through 2011. While customers have been extremely satisfied with Apple's phone and have embraced it, many U.S. customers have been disappointed with the AT&T network.



In his report, Munster also believes that Apple is dissatisfied with the current status of video content offered in iTunes. Specifically, he said the video store is lacking HBO and is often tied to limited movie availability periods.



"We believe Apple is unhappy with the current status of video on the iTunes Store and is working to change it," Munster said. "These changes, however, will take time, in the form of lengthy negotiations, in order to bring the rights for TV and movies up to speed in a digital world."



Munster believes that Apple will eventually offer a monthly subscription offer for TV shows on iTunes. At a cost of $30 to $40 a month, he said the company could offer unlimited access to content from network and cable providers. If the Cupertino, Calif., company were to offer a subscription model, he believes it would replace a consumer's cable bill.



"While timing on the launch of such a new product is very uncertain given the negotiations that would need to take place, Apple may work to launch it simultaneously with a new version of Apple TV, or an undated Apple TV software within the next year," he said. "Moreover, we believe Apple has wisely avoided a subscription music model, as music listeners prefer to listen to their own music, and listen to it frequently. Movie watchers, on the other hand, prefer to rent, and typically only want to see a movie once or twice. Likewise, TV viewers are not accustomed to purchasing TV shows on an a-la-carte basis, and a subscription TV service would likely be more appealing."
«134

Comments

  • Reply 1 of 77
    nceencee Posts: 857member
    and then which the numbers climb (and the stock)



    Skip
  • Reply 2 of 77
    ivan.rnn01ivan.rnn01 Posts: 1,822member
    Quote:
    Originally Posted by AppleInsider View Post


    "In France, the company now enjoys dramatically higher market share (in the 40 percent range vs. about 15 percent in ROW) than in countries with exclusive carrier agreements (such as AT&T in the U.S. where the iPhone has market share in the mid-teens). We believe Apple is seeing the increased unit sell-through more than offset the slightly (~10 percent) deteriorated economics per unit involved in non-exclusive agreements."



    Likely so...

    P.S. And because we're so bright and generate huge revenue, we expect kinda reimbursement here. When do Apple think the fully functional movie rental capability will be available in french iTunes store?
  • Reply 3 of 77
    deepdeep Posts: 13member
    Unlimited cable TV service? That would be nice if there were to be a 1080i/p Apple TV.
  • Reply 4 of 77
    A subscription model for video content would be great but I'm into sports and hockey in particular. If I have a way of getting HD broadcasts of NHL gamess, my favourite team in particular, cable is in trouble.



    Myself I see a subscription model for movies but TV would be a stop-gap thing. The day is probably not that far off when TV networks will offer their shows in decent HD via the net, free of charge. So you access TV shows via the Internet and you get your movie fix via a subscription model from a company like Apple.



    Of course, service providers would dramatically increase the cost of an Internet connection in order to remain viable so us consumers will still pay. Also, this is a change that will be many years in the making. Ten years from now the current cable model will be on the verge of collapsing but we'll still be paying significant money for our TV fix.



    From Apple's perspective, though, this is great news because the changes will allow them to grab a chunk of this market. I'm sure they'll make a boatload of cash because of it.
  • Reply 5 of 77
    Do people really think that Verizon's data network isn't going to crumble just like AT&Ts did? They dramatically oversold their capacity, just like ATT, based on usage patterns for crap phones.



    The earliest adopters are going to proclaim VZW the greatest thing since sliced bread.

    But give it a few months of selling like gangbusters and service is going to crap in the major markets.
  • Reply 6 of 77
    al_bundyal_bundy Posts: 1,525member
    in order to bring the iphone to VZ it will mean LTE and legacy CDMA support. that means that the expectation is that next year there will be chips and radios that can support all the carriers, technologies and be cheap enough to make the product at the right price
  • Reply 7 of 77
    benroethigbenroethig Posts: 2,782member
    Quote:
    Originally Posted by Roc Ingersol View Post


    Do people really think that Verizon's data network isn't going to crumble just like AT&Ts did? They dramatically oversold their capacity, just like ATT, based on usage patterns for crap phones.



    The earliest adopters are going to proclaim VZW the greatest thing since sliced bread.

    But give it a few months of selling like gangbusters and service is going to crap in the major markets.



    I don't know. AT&T has never been very good when it comes to infrastructure.
  • Reply 8 of 77
    expatexpat Posts: 110member
    Quote:
    Originally Posted by al_bundy View Post


    in order to bring the iphone to VZ it will mean LTE and legacy CDMA support



    Hopefully Apple does support CDMA, or hopefully we get 4G. I know here in Canada, Telus and Bell are CDMA networks upping their 4G coverage in hopes of picking up the iPhone. I'm eagerly waiting myself - I want an iPhone but hate Rogers - what to do.
  • Reply 9 of 77
    charlitunacharlituna Posts: 7,217member
    Quote:
    Originally Posted by ivan.rnn01 View Post


    Likely so...

    P.S. And because we're so bright and generate huge revenue, we expect kinda reimbursement here. When do Apple think the fully functional movie rental capability will be available in french iTunes store?



    the lack of locking is due to your laws which allow a customer to say on day one that he/she doesn't want a locked phone and it must be unlocked. Apple probably assumed everyone would use that law so why bother having them locked in the first place.



    the movie issue is something totally unrelated to the phones. so don't expect it to be set up as some kind of payback. it will happen when the various laws, licenses etc can be set up to allow it. keep in mind that the studios have a lot of power on this issue. more than apple.



    as for the rest of the article, is anyone really shocked. after all we saw mentions in the last year of ATT wanting to get an additional year on their contract so they would have the iphone into 2011. do the math and that tells us that some time around summer 2010, the old one runs out. but I don't think that they will run to another carrier. they are better off just unlocking the phone and letting anyone that can support the phone have the phone. let them do subsidies if they want, or folks can buy it full price from apple.



    the only question that remains is if Apple would make a phone that can run on CDMA or just stick with the GSM unit. I think they will stick with GSM and then into whatever comes next. if Sprint, Verizon etc don't support that, it's on them.
  • Reply 10 of 77
    ajitmdajitmd Posts: 365member
    If Apple wants to sell the iPhone in the VZN network, it will have to implement the CDMA/EDVO tech... even if LTE in included. Verizon will need time to implement the LTE network... it is quite complicated as they will need to upgrade their fiberoptic network, routers, switches to handle the data flow. The tower spacing may or may not be adequate. It is what is called, truck load upgrades. LTE will take time to be ubiquitous.



    The big question will be the level of carrier subsidy by ATT if the contract is not exclusive. The key for the shareholders in maximizing sustained margins, profits... not market share like Nokia, etc with $50 phones (or less).
  • Reply 11 of 77
    paxmanpaxman Posts: 4,703member
    Quote:
    Originally Posted by AppleInsider View Post


    Apple's worldwide single-carrier exclusivity model for each nation is seen as fleeting...



    Good - now that the iphone is here and truly entrenched exclusivity deals are just bad business, and bad for consumers.

    Quote:

    In his report, Munster also believes that Apple is dissatisfied with the current status of video content offered in iTunes.



    I hope they are bloody dissatisfied! I do not understand why video rental is so hard to do. Get a huge library of movies and let people rent and watch sales of Apple TV take off. To really make it fly open it up for other on-line video sources.
  • Reply 12 of 77
    ivan.rnn01ivan.rnn01 Posts: 1,822member
    Quote:
    Originally Posted by charlituna View Post


    the lack of locking is due to your laws which allow a customer to say on day one that he/she doesn't want a locked phone and it must be unlocked. Apple probably assumed everyone would use that law so why bother having them locked in the first place.



    Umm... I didn't write single word about unlocking. It's possible neither on day one, nor on day two, but after 6 months of contract have expired.

    Orange used to not pull dirty tricks and to unlock phones without saying a word (just upon the request on their site), while other carriers are doing everything to waste as much of your time as possible, when you ask them to.



    Quote:
    Originally Posted by charlituna View Post


    the movie issue is something totally unrelated to the phones. so don't expect it to be set up as some kind of payback. it will happen when the various laws, licenses etc can be set up to allow it. keep in mind that the studios have a lot of power on this issue. more than apple.



    I was rather joking. Yet, it wouldn't do any harm, if Apple used more of their notoriety to have got it done in France. It works in UK and in Germany. And we have much more movie lovers and theater-goers, than any of them do.



    Quote:
    Originally Posted by charlituna View Post


    as for the rest of the article, is anyone really shocked. after all we saw mentions in the last year of ATT wanting to get an additional year on their contract so they would have the iphone into 2011. do the math and that tells us that some time around summer 2010, the old one runs out. but I don't think that they will run to another carrier. they are better off just unlocking the phone and letting anyone that can support the phone have the phone. let them do subsidies if they want, or folks can buy it full price from apple.

    the only question that remains is if Apple would make a phone that can run on CDMA or just stick with the GSM unit. I think they will stick with GSM and then into whatever comes next. if Sprint, Verizon etc don't support that, it's on them.



    Time will tell. I don't see it being easily achievable in the Apple's philosophy of perfect cooperation of hardware and software components.
  • Reply 13 of 77
    teckstudteckstud Posts: 6,476member
    I've always said the content of the iTunes movie/video library sucks and was chewed up and down here. And now you have it- Apple doesn't even like it. That's has always been on of the main problems with the AppleTV- the quality of what is offered in the jukebox itself. Most of the film in iTunes are just plain crap. I don't care if the new crappy ones are released day and date as the DVD. Where are the classics? Where are the non-english speaking films?
  • Reply 14 of 77
    wigginwiggin Posts: 2,265member
    I have to agree with previous posts. If Apple were to launch the iPhone with Verizon and expect to be successful (granted, a relative term) it will need to include some form of CDMA, even if it's only the older 2G network. Otherwise your phone will be useless outside of major cities until at least later in 2011.



    Of course, they could release it on Tmobile's network, but I'm not sure their market reach is sufficient to make up for lost revenue sharing from ATT with an exclusive contract.
  • Reply 15 of 77
    anonymouseanonymouse Posts: 6,677member
    Quote:
    Originally Posted by deep View Post


    Unlimited cable TV service? That would be nice if there were to be a 1080i/p Apple TV.



    Do any networks/stations "broadcast" in 1080? (I don't think so.) So what would be the point in Apple going 1080 in Apple TV? (Well, maybe I'm wrong and there is a point, in which case I am eager to be enlightened.)
  • Reply 16 of 77
    teckstudteckstud Posts: 6,476member
    Quote:
    Originally Posted by anonymouse View Post


    Do any networks/stations "broadcast" in 1080? (I don't think so.) So what would be the point in Apple going 1080 in Apple TV? (Well, maybe I'm wrong and there is a point, in which case I am eager to be enlightened.)



    Yes they broadast in 1080i not 1080p.
  • Reply 17 of 77
    galleygalley Posts: 971member
    Quote:
    Originally Posted by anonymouse View Post


    Do any networks/stations "broadcast" in 1080? (I don't think so.) So what would be the point in Apple going 1080 in Apple TV? (Well, maybe I'm wrong and there is a point, in which case I am eager to be enlightened.)



    Many networks broadcast in 1080i; 1080p is only used for VOD.
  • Reply 18 of 77
    anonymouseanonymouse Posts: 6,677member
    Quote:
    Originally Posted by al_bundy View Post


    in order to bring the iphone to VZ it will mean LTE and legacy CDMA support. that means that the expectation is that next year there will be chips and radios that can support all the carriers, technologies and be cheap enough to make the product at the right price



    I don't think this requires that Apple use chips/radios that support all carriers in each iPhone. I really don't see it as a big deal for them to produce different versions with different chips. On the other hand, it would be great if they did support all carriers in a single device. Hopefully, we will get there at some point in the future, one way or another.
  • Reply 19 of 77
    anonymouseanonymouse Posts: 6,677member
    Quote:
    Originally Posted by Galley View Post


    Many networks broadcast in 1080i; 1080p is only used for VOD.



    Ah, very well, then. Get to it Apple!



    EDIT: Or, not, based on later comments.
  • Reply 20 of 77
    irelandireland Posts: 17,779member
    Watch out Sky+



    If Apple offered (as part of said service) live news, and optionally, "live sports" they would have a winner.
Sign In or Register to comment.