JP Morgan's US branch quashes iPhone nano report

Posted:
in iPod + iTunes + AppleTV edited January 2014
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.
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Comments

  • Reply 1 of 27
    plusplus Posts: 54member
    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.
  • Reply 2 of 27
    ajhillajhill Posts: 81member
    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.
  • Reply 3 of 27
    jeffdmjeffdm Posts: 12,949member
    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.
  • Reply 4 of 27
    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!

  • Reply 5 of 27
    SpamSandwichSpamSandwich Posts: 31,404member
    I don't believe in an iPhone 'nano' for one second... not even a nano-second.
  • Reply 6 of 27
    mrjoec123mrjoec123 Posts: 223member
    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.
  • Reply 7 of 27
    gargar Posts: 1,201member
    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.
  • Reply 8 of 27
    19841984 Posts: 955member
    There's plenty to see. Don't forget AT&T let it slip that Apple was working an various iPhones for them.
  • Reply 9 of 27
    backtomacbacktomac Posts: 4,579member
    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?
  • Reply 10 of 27
    rolorolo Posts: 686member
    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.
  • Reply 11 of 27
    wigginwiggin Posts: 2,265member
    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?
  • Reply 12 of 27
    tmedia1tmedia1 Posts: 104member
    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...
  • Reply 13 of 27
    crees!crees! Posts: 501member
    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.
  • Reply 14 of 27
    nofeernofeer Posts: 2,422member
    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????
  • Reply 15 of 27
    bageljoeybageljoey Posts: 1,762member
    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.
  • Reply 16 of 27
    bageljoeybageljoey Posts: 1,762member
    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.
  • Reply 17 of 27
    [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.....

  • Reply 18 of 27
    ouraganouragan Posts: 428member
    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.



  • Reply 19 of 27
    wigginwiggin Posts: 2,265member
    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!
  • Reply 20 of 27
    kendokakendoka Posts: 110member
    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.
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