Prudential: Apple to release two iPhone models, one with WiFi
Apple Computer plans to introduce two iPod-based cell phone models in the first quarter of 2007 that it will initially manufacture in limited quantities, says one analyst.
In a research note released to clients on Monday, Prudential Equity Group analyst Jesse Tortora said his checks indicate that one model will be a smart phone, including integrated keyboard, video and music capability, while the other model will be a slimmer phone with just music functionality.
The analyst, who remained mum on his sources, said at least one of the models will include WiFi wireless capabilities.
"Although these phones represent significant upside earnings potential for the company, there are some concerns regarding market acceptance and battery life, given the number of functions included in the phones," he wrote. "Our checks indicate that Apple will produce these phones in limited quantities initially as a market test vehicle."
For Apple's fourth fiscal quarter ended September, Tortora expects the Cupertino, Calif.-based company to post some upside to street estimates, driven primarily by Mac sales strength and favorable component cost declines. He's modeling revenue of $4.8 billion and earnings-per-share of $0.55, ahead of consensus estimates of $4.7 billion and $0.51.
"While we expect Mac momentum to continue in the [December quarter] (forecasting 1.9 million units), we are more cautious on the outlook for iPod sales and on Apple’s overall margin prospects," the analyst wrote.
While Tortora said checks indicate Apple is preparing its ODM partners for production orders of as many as 21 million iPod units during the December holiday quarter, he said other checks suggest that iPod unit shipments will come in closer to 16 million units for the quarter.
"Moreover, while our checks indicate that production of Apple's new wide screen video iPod will begin in the [December quarter], we do not expect the product to be released until early next year," he continued. "All told, we would not be surprised to see Apple scale down ODM production plans as the quarter moves on, and think that iPod sales could fall short of investor expectations."
Tortora, who maintains a Neutral rating and $74 price target on shares of Apple, recommended that investors remain on the sidelines until he gets "better visibility into the competitive dynamics of the media player space" and its new product ramps.
In a research note released to clients on Monday, Prudential Equity Group analyst Jesse Tortora said his checks indicate that one model will be a smart phone, including integrated keyboard, video and music capability, while the other model will be a slimmer phone with just music functionality.
The analyst, who remained mum on his sources, said at least one of the models will include WiFi wireless capabilities.
"Although these phones represent significant upside earnings potential for the company, there are some concerns regarding market acceptance and battery life, given the number of functions included in the phones," he wrote. "Our checks indicate that Apple will produce these phones in limited quantities initially as a market test vehicle."
For Apple's fourth fiscal quarter ended September, Tortora expects the Cupertino, Calif.-based company to post some upside to street estimates, driven primarily by Mac sales strength and favorable component cost declines. He's modeling revenue of $4.8 billion and earnings-per-share of $0.55, ahead of consensus estimates of $4.7 billion and $0.51.
"While we expect Mac momentum to continue in the [December quarter] (forecasting 1.9 million units), we are more cautious on the outlook for iPod sales and on Apple’s overall margin prospects," the analyst wrote.
While Tortora said checks indicate Apple is preparing its ODM partners for production orders of as many as 21 million iPod units during the December holiday quarter, he said other checks suggest that iPod unit shipments will come in closer to 16 million units for the quarter.
"Moreover, while our checks indicate that production of Apple's new wide screen video iPod will begin in the [December quarter], we do not expect the product to be released until early next year," he continued. "All told, we would not be surprised to see Apple scale down ODM production plans as the quarter moves on, and think that iPod sales could fall short of investor expectations."
Tortora, who maintains a Neutral rating and $74 price target on shares of Apple, recommended that investors remain on the sidelines until he gets "better visibility into the competitive dynamics of the media player space" and its new product ramps.
Comments
come on, these guys don't know any more than any of us in this forum.
well another analyst full of BS.
come on, these guys don't know any more than any of us in this forum.
yer but there getting paid to chat a load of bollocks. man, if i had that job, i would be a millionaire by now..
Tortora recommended that investors remain on the sidelines until he gets "better visibility into the competitive dynamics of the media player space".
[ View this article at AppleInsider.com ]
Thats just a fancy way of saying he wants to wait to see how the Zune does.
The important point was completely glossed over by the analyst... can you squirt a video to another iPhone?
at least one of the models will include WiFi wireless capabilities
Would not be worth it if it kills battery life. Plus if Apple works with T-Mobile they will have 3G capability. WiFi isn't necessary.
The widescreen iPod is rediculous. We shouldv'e had it at "It's Showtime!" Just how reliable are these analysts though? Anyone?
Apple would likely want to keep a wide screen iPod as close as possible the same size, weight, and battery life of the current iPod.
Wide screen devices available right now are either heavier or thicker and have less battery life than the current iPods. Apple is likely waiting for technology and cost of components to come to a place where they feel they can offer a quality wide screen iPod at a reasonable cost.
Excuse my cell phone ignorance but whats so great about T Mobile?
Nothing at all.
All the cell phone companies in the US suck. How much they suck depends on where you live and what your needs are. In some areas T Mobile may be great for local coverage, elswhere it might be Verizon. And of course voice and data coverage can be different in an area for a carrier.
So people need to check out the cell phone company and plan based on where they need to use it. And not based on someone liking a carrier in a city they never go to.
Nothing at all.
All the cell phone companies in the US suck. How much they suck depends on where you live and what your needs are. In some areas T Mobile may be great for local coverage, elswhere it might be Verizon. And of course voice and data coverage can be different in an area for a carrier.
So people need to check out the cell phone company and plan based on where they need to use it. And not based on someone liking a carrier in a city they never go to.
I definitely agree that coverage in your area is probably the most important. However, I was always impressed with T-Mobile's customer support. I also loved the #min# and #bal# features for checking my minutes/balance.
one model will be a smart phone, including integrated keyboard, video and music capability, while the other model will be a slimmer phone with just music functionality.
*spits orange juice all over the table* no, no... this can't be right. which one will be the candy bar shaped one? will there be a brown one??
get me teh WU on the phone now!
Excuse my cell phone ignorance but whats so great about T Mobile?
The Ads. She's hot. The service isn't.
-Clive
I have yet to see a phone w/ integrated keyboard which pleases me, both functionally and aesthetically. Unless Apple impresses me with something shockingly amazing, no smart phone user will I be.
-Clive
Me, too. I'll probably stick to the music-only iPhone. That way I can replace my phone and iPod.
My Palm Tungsten I can carry around separately, when needed... unless the smart iPhone is suprisingly small.
I perplexes me as to why someone would think that such small keys should be domed rather than dished. The keys are so close that I hit more than one when pressing with my finger. I don't have big fingers. When I try my nail, it slides off. You can't use the stylus for the same reason.
If they were dished then you could use a nail, or the stylus.
I installed "Mobile Write" which is somewhat like "Graffiti" except that the top third of the screen is for numbers, and the rest is for letters, etc.
Don't forget that Apple has "Ink", which has never really been used, or pushed. Perhaps now is the time for it.
An Apple smartphone running mobile X will be great. I look forward to it.
Any touchscreen device requires more device thickness than a regular one. It will be interesting to see if they go for the thinner form instead.
An Apple smartphone running mobile X will be great. I look forward to it.
But not much of a difference. A sixteenth of an inch is all that is needed with a small screen.
If iPhone doesn't work with T-mobile, Steve will never get me on board.
I've got news for you: Apple's phone will be GSM, and an exclusive with T-Mobile (I am bummed, since I just signed on to a stupid 2-year Verizon agreement).