CDMA iPhone represents $9 billion opportunity for Apple, says analyst

Posted:
in iPhone edited January 2014
Apple could see as much as $6 billion from sales of the CDMA-version of the iPhone on Verizon, and another $3 billion in CDMA iPhone sales overseas in 2012, says one analyst.



Analyst Mark Moskowitz of J.P. Morgan Research issued a note to investors on Tuesday detailing Apple's "multi-billion dollar revenue opportunity" in the CDMA market. According to Moskowitz, the Cupertino, Calif., iPhone maker should maintain above-market growth over the next 18-24 months, especially if boosted by accelerating CDMA market penetration in Asia-Pacific and the U.S.



The analyst commended Apple's pursuit of Verizon first as a sound approach, given that Verizon represents a "major piece" of the global CDMA opportunity, while noting that Apple will likely go after China, India, Japan and South Korea next because of their high penetration rates of smartphone usage and the increased purchasing power of their growing consumer bases.



Moskowitz predicts Apple will sell 10 million iPhones through Verizon in 2012, amounting to roughly $6 billion in revenues. In the overseas CDMA market, the analyst projects a 10 percent market share in 2012, resulting in approximately $3 billion in revenues.



Citing figures from research firm IDC that project Asia-Pacific to outpace all other regions with 40 percent growth from 2009-2014, Moskowitz sees the region continuing to drive the iPhone's year over year growth.



Apple has seen phenomenal growth in Asia. Revenue in Greater China reached $2.6 billion last quarter, up four-fold from the prior year quarter. Apple revenues in Japan saw 83 percent growth year over year and the company has seen healthy growth in Korea as well.



Several other analysts have predicted that the CDMA iPhone will soon arrive on Asian carriers, such as India's Reliance and China Telecom. China Telecom has reportedly succeeded in activating test units of Apple's CDMA iPhone 4 and could launch a limited test program in Beijing as early as this June.



For its part, Verizon announced in February that the launch of the CDMA iPhone 4 was the largest in the carrier's history. Executives at the largest carrier in the U.S. have projected a conservative 11 million units in sales of the iPhone in 2011, with the possibility of 'explosive' growth in coming years.
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Comments

  • Reply 1 of 30
    solipsismsolipsism Posts: 25,726member
    This report doesn’t jibe with me. Based on the $625 average price in Apple’s quarterlies $6 billion in revenue is just under 10 million units for 2012. AT&T reportedly sold 4.1 million units in the 2010 holiday quarter.



    Multiplying by 4 that is 16.4 million for 2011, or $10.25 billion in sales… and that’s without accounting for growth trends in 2011, much less 2012 or the size and demographics of Verizon’s network over AT&T’s.



    So what am I missing because it seems impossible that the analyst could be undercutting a CDMA-based iPhone by such a large gap?
  • Reply 2 of 30
    bageljoeybageljoey Posts: 1,755member
    Quote:
    Originally Posted by solipsism View Post


    So what am I missing because it seems impossible that the analyst could be undercutting a CDMA-based iPhone by such a large gap?



    From what I gather, the thinking is that in the US, AT&T has already siphoned away the die-hard Apple fans--the low hanging fruit, so to speak. Also, Android is somewhat entrenched there and some people may be buying into their ecosystem.



    Still, I agree. Numbers seem low. Maybe they were predicting "new" iPhone owners and subtracting out those who switch from AT&T (because they are not a part of incremental growth)?
  • Reply 3 of 30
    mdriftmeyermdriftmeyer Posts: 7,259member
    The analyst(s) are high.



    iPhone will only expand for GMS after the T-Mobile merger finalizes, not shrink.
  • Reply 4 of 30
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by mdriftmeyer View Post


    The analyst(s) are high.



    iPhone will only expand for GMS after the T-Mobile merger finalizes, not shrink.



    I?m not so sure. AT&T said they?d keep T-Mo a separate entity and without the AWS band in the iPhone it still will only work on GSM (2G), not UMTS (3G). If they use their AWS band for their LTE network that?s still some time away, still would require the iPhone to be updated, and if not used for both carriers would still keep the iPhone only on AT&T and not T-Mo.



    I?m not even convinced the merger will go through, though if I had to make a bet right now I?d say it will.



    Adding the iPhone to Sprint would be considerably easier for Apple as there are no HW changes needed to support their network now that they have a shipping Verizon iPhone. I?d even think a Sprint iPhone would yield more users at this point than T-Mo.
  • Reply 5 of 30
    lkrupplkrupp Posts: 7,072member
    Quote:
    Originally Posted by solipsism View Post


    So what am I missing because it seems impossible that the analyst could be undercutting a CDMA-based iPhone by such a large gap?



    Keep in mind that Android is completely, utterly destroying the iPhone. I read that somewhere.
  • Reply 6 of 30
    pxtpxt Posts: 683member
    It's always nice to hear stories about analysts.



    In other news, my Mom's been having trouble with cats killing birds in the garden.
  • Reply 7 of 30
    shadashshadash Posts: 470member
    So where is everybody who 12 months ago was saying Apple would never release a CDMA iPhone?



    http://www.youtube.com/watch?v=lgIB9XRaj0E
  • Reply 8 of 30
    tallest skiltallest skil Posts: 43,399member
    Quote:
    Originally Posted by shadash View Post


    So where is everybody who 12 months ago was saying Apple would never release a CDMA iPhone?



    http://www.youtube.com/watch?v=lgIB9XRaj0E



    I'm still here. Where did you think I'd be?



    I don't recall saying never, but I still believe it was an idiotic decision to release a CDMA-only iPhone, as it was idiotic to release a CDMA-only iPad, particularly when both of these devices have dual-band chips already installed.
  • Reply 9 of 30
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by Tallest Skil View Post


    I'm still here. Where did you think I'd be?



    I don't recall saying never, but I still believe it was an idiotic decision to release a CDMA-only iPhone, as it was idiotic to release a CDMA-only iPad, particularly when both of these devices have dual-band chips already installed.



    So you?ve weighed your lack of knowledge of Apple?s internal workings against Apple and their expertise and determined they have chosen to make less money by not making a single device that will be ?full world mode." That?s some fucking claim!



    So tell us, what are the details that make this an idiotic move for Apple?s bottom line or is just the idea of combining products that appeals to you despite having no reasonable answer outside of common desire? What would be the cost of the ?full world mode? Gobi chip and bands in 60M iPad 2s for 2011 when only 1/6th of them will ever be sold for Verizon?s CDMA network? At what price for R&D, components and licensing (something Qualcomm charges a lot for) makes you know that it?s idiotic for Apple not to include CDMA chips in an estimated 60M iPads being sold this year?



    And that?s before we even get to power usage and transmit rate efficiency of the Gobi?s GSM and UMTS radios over the GSM and UMTS chips current utilized. How much of a hit there is an acceptable loss that the customer should deal with because now they have over 12 SKUs to deal with, not 18?



    And then we have the iPhone. Have you seen what is needed for the ?full world mode" Gobi chip? Assuming for a second that there is no power hit, no performance hit, and no cost hit, have you considered what would be needed to make the iPhone 4 work on all networks. First you have to add the 4 GSM bands and 5 UMTS bands (though you could get away with 4), then you have to add the SIM card port again, and then you have to make sure the small antenna setup will function adequately regardless of the network being used.



    Again, what part of Apple?s decision have you figured out is financially detrimental to their bottom line?
  • Reply 10 of 30
    tallest skiltallest skil Posts: 43,399member
    Quote:
    Originally Posted by solipsism View Post


    *rant*







    When Apple could be selling one model all over the planet and simply allow carriers to turn off CDMA if their country doesn't have it, having two models doesn't make much sense.



    South Korea, China, and India (to name the largest) have networks that could take advantage of such a phone in addition to Verizon in the U.S.



    It's obvious that this is Apple's eventual intent. Otherwise they would have just used a standard CDMA-only chip in the Verizon iPhone as its own model.
  • Reply 11 of 30
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by Tallest Skil View Post






    When Apple could be selling one model all over the planet and simply allow carriers to turn off CDMA if their country doesn't have it, having two models doesn't make much sense.



    South Korea, China, and India (to name the largest) have networks that could take advantage of such a phone in addition to Verizon in the U.S.



    It's obvious that this is Apple's eventual intent. Otherwise they would have just used a standard CDMA-only chip in the Verizon iPhone as its own model.



    Eventual intent or not, you didn?t answer any of my questions regarding why Apple is so idiotic. They make over 50% of the world?s handsets profits yet you are claiming that you know better despite having stated no inside knowledge of any costs or supplies.



    A few more things to consider? They are trying out the Gobi chip. They are still waiting for a smaller chip or more combined chips so there is room in the iPhone. They couldn?t have sourced enough for one cellular iPad sold globally so they had to split it up. ? Plus, all the potential reasons previously mentioned, and many many more I?m sure I didn?t think of in the 2 minutes I spent writing the last two posts.
  • Reply 12 of 30
    tallest skiltallest skil Posts: 43,399member
    Quote:
    Originally Posted by solipsism View Post


    A few more things to consider? They are trying out the Gobi chip.They are still waiting for a smaller chip or more combined chips so there is room in the iPhone.



    Oh, is the dual-band chip in the VeriPhone too big to fit a SIM? Well, then I retract my previous position. If it's an issue of physical space, Apple wouldn't compromise on device size to fit a SIM, and I wouldn't expect them to do so.



    Quote:

    Plus, all the potential reasons previously mentioned, and many many more I?m sure I didn?t think of in the 2 minutes I spent writing the last two posts.



    About the antennas, I don't really see a problem. Bunch of antennas, but no more than four would ever be used at once. Since the body's the antenna and there's only one body, couldn't they just attach one of each (CDMA and GSM) to each part of the body and have the phone flip between protocols (as 99% of users wouldn't have any reason to do this flip, it could be handled like the 9600M/9400M switching on the first unibodies)?
  • Reply 13 of 30
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by Tallest Skil View Post


    Oh, is the dual-band chip in the VeriPhone too big to fit a SIM? Well, then I retract my previous position. If it's an issue of physical space, Apple wouldn't compromise on device size to fit a SIM, and I wouldn't expect them to do so.



    Dual-band chip? WTF?! You?re calling a dual-band chip? but you?re actually referring to the GSM/UMTS and the CDMA/CDMA2000 mobile telecommunications technologies. There are 4 GSM bands, 2 CDMA/CDMA2000 bands, and 5 UMTS bands that would be needed to make the current iPhones into one phone. Then you have technologies over those technologies to deal with.



    Eventually it will make sense to combine chips, but to say Apple is ?idiotic? with minimalist desire a your only proof is, well, idiotic.



    Quote:

    About the antennas, I don't really see a problem. Bunch of antennas, but no more than four would ever be used at once. Since the body's the antenna and there's only one body, couldn't they just attach one of each (CDMA and GSM) to each part of the body and have the phone flip between protocols (as 99% of users wouldn't have any reason to do this flip, it could be handled like the 9600M/9400M switching on the first unibodies)?



    You make it sounds like no engineering is involved.
  • Reply 14 of 30
    charlitunacharlituna Posts: 7,215member
    Quote:
    Originally Posted by Tallest Skil View Post


    but I still believe it was an idiotic decision to release a CDMA-only iPhone, as it was idiotic to release a CDMA-only iPad, particularly when both of these devices have dual-band chips already installed.





    I have to agree more or less with this. The smarter move would be 'world mode' devices.



    That said, I do get their logic. Why invest in world mode unless they can see real time interest in the CDMA side of things. And they would want real time, real field results on battery life etc under the CDMA side of things. To better the results when they do go world mode. So they could be viewing this Verizon only iphone and ipad as a kind of public Beta for the next step. Plus with the numbers of buy in by end users they might be able to get better terms for licensing and even components because they will buy in bulk from the top (which typically gets better deals)
  • Reply 15 of 30
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by charlituna View Post


    I have to agree more or less with this. The smarter move would be 'world mode' devices.



    That said, I do get their logic. Why invest in world mode unless they can see real time interest in the CDMA side of things. And they would want real time, real field results on battery life etc under the CDMA side of things. To better the results when they do go world mode.



    But we can’t say it’s smarter when the the iPhone 4 was the smallest smartphone in the world, only bested by some soon to be shipping models at CES 2011.



    Qualcomm now has Gobi, which is the only option I know of that allows for the communications options and bands that the iPhone would need, yet I don’t know of a single phone that uses this chip in it’s entirety so why would be assume the smallest cellphone would have had this capability long before their competitors with much larger volume devices? The Verizon iPhone 4 is the only phone I know of using that chip and it’s missing a lot of HW to make it "fully world mode” to meet Apple’s needs. Meaning, it’s baseband is capable of supporting CDMA/EV-DO and UMTS/HSDPA/HSUPA/HSPA+, but it doesn’t support the 3GSM feature in the rest of the HW. Why not?



    You can’t use the quasi-“world mode” phones from BB that are locked to Verizon but also have a crappy, single UTMS radio for Europe because that is 3 less than is currently needed for consumers.



    That’s just some space issues. I’m amazed that this is even being pushed around as being simple, easy and Apple is too dumb to know better.
  • Reply 16 of 30
    tenobelltenobell Posts: 7,014member
    Why can't Apple do something that no one else is doing and none of its component partners can currently offer. Its because they are a bunch of idiots over there I tell ya'.



    Quote:
    Originally Posted by solipsism View Post


    That’s just some space issues. I’m amazed that this is even being pushed around as being simple, easy and Apple is too dumb to know better.



  • Reply 17 of 30
    tenobelltenobell Posts: 7,014member
    I wonder if this is could be one of the reasons for pushing the iPhone 5 back to September. Clear advantages to Apple's manufacturing chain if they only had to make one phone.





    Quote:
    Originally Posted by solipsism View Post


    Dual-band chip? WTF?! You?re calling a dual-band chip? but you?re actually referring to the GSM/UMTS and the CDMA/CDMA2000 mobile telecommunications technologies. There are 4 GSM bands, 2 CDMA/CDMA2000 bands, and 5 UMTS bands that would be needed to make the current iPhones into one phone. Then you have technologies over those technologies to deal with.



  • Reply 18 of 30
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by TenoBell View Post


    Why can't Apple do something that no one else is doing and none of its component partners can currently offer. Its because they are a bunch of idiots over there I tell ya'.









    PS: Just to be clear on my position here, I?d like for Apple to make a full world mode phone and think if anyone can do it for such a small device it?s Apple.
  • Reply 19 of 30
    gatorguygatorguy Posts: 20,593member
    There's already smartphone "world phones" from other manufacturers. I don't know why increasing the size of the iPhone would be much of an issue. If anything haven't some number of iPhone owners indicated a preference for a slightly larger display in Ver5 anyway? Or is the phone thickness the issue?
  • Reply 20 of 30
    tenobelltenobell Posts: 7,014member
    Solipsism addressed that in his post.



    Quote:
    Originally Posted by Gatorguy View Post


    There's already smartphone "world phones" from other manufacturers. I don't know why increasing the size of the iPhone would be much of an issue. If anything haven't some number of iPhone owners indicated a preference for a slightly larger display in Ver5 anyway? Or is the phone thickness the issue?



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