RBC says sub-$100 "iPod phone" market open for Apple's taking
Apple could announce sales of more than 4 million 3G iPhones at its media event next week, according to investment bank RBC Capital Markets, which also suggests the company may be looking into a low cost "iPod phone" to build on its momentum.
Analyst Mike Abramsky made the comments in a research note Wednesday, saying "resilient post-launch" sell-through has paced the company ahead of Wall Street's expectations and on target with his forecast of 5.1 million 3G units in the September quarter and 14 million total iPhone units for the calendar year.
Apple plans to hold a media event next Tuesday to usher in a refreshed line of iPod digital music players and unveil new iTunes services, but may also use the forum to provide an update on iPhone 3G sales, Abramsky said. He added that the Cupertino-based company has also promised by September a new version of iPhone Software (v2.1) with system-wide push notification support and improved GPS tracking, which may also make an appearance.
The analyst also used his report to toss around the prospect of a completely new device that could be brewing at Apple, but one that he does not expect at Tuesday's event. Though unsupported by any hard evidence, Abramsky said he has reason to believe the electronics maker is exploring the possibility of an "entry level, low cost (less than $99 subsidized) prepaid iPod/phone" that would be restricted to music playback and voice calls.
Such a device would allow the company to "capture an untapped global opportunity," he said. Marketing the pre-paid handset through retail outlets worldwide would provide a residual effect that would both "boost iPhone's momentum by 50 to 100 percent" while establishing future iPhone upgrades and enhanced global Mac sales.
As is the case for the iPhone 3G, the current quarter is proving to be yet another breakout period for Mac sales. Abramsky, who previously published the most bullish known estimates for Mac sales at 3.04 million units, said he stands by that forecast, which continues to see support from his firm's proprietary data.
He sees refreshed MacBooks and MacBook Pros with "aluminum enclosures, larger multi-touch trackpads, and updated specs" arriving sometime after next week's iPod event. He also expects Apple's global PC market share to rise to 4.2 percent by next year, up from 2.9 percent in 2007.
Abramsky maintains an Outperform rating on Apple shares.
Analyst Mike Abramsky made the comments in a research note Wednesday, saying "resilient post-launch" sell-through has paced the company ahead of Wall Street's expectations and on target with his forecast of 5.1 million 3G units in the September quarter and 14 million total iPhone units for the calendar year.
Apple plans to hold a media event next Tuesday to usher in a refreshed line of iPod digital music players and unveil new iTunes services, but may also use the forum to provide an update on iPhone 3G sales, Abramsky said. He added that the Cupertino-based company has also promised by September a new version of iPhone Software (v2.1) with system-wide push notification support and improved GPS tracking, which may also make an appearance.
The analyst also used his report to toss around the prospect of a completely new device that could be brewing at Apple, but one that he does not expect at Tuesday's event. Though unsupported by any hard evidence, Abramsky said he has reason to believe the electronics maker is exploring the possibility of an "entry level, low cost (less than $99 subsidized) prepaid iPod/phone" that would be restricted to music playback and voice calls.
Such a device would allow the company to "capture an untapped global opportunity," he said. Marketing the pre-paid handset through retail outlets worldwide would provide a residual effect that would both "boost iPhone's momentum by 50 to 100 percent" while establishing future iPhone upgrades and enhanced global Mac sales.
As is the case for the iPhone 3G, the current quarter is proving to be yet another breakout period for Mac sales. Abramsky, who previously published the most bullish known estimates for Mac sales at 3.04 million units, said he stands by that forecast, which continues to see support from his firm's proprietary data.
He sees refreshed MacBooks and MacBook Pros with "aluminum enclosures, larger multi-touch trackpads, and updated specs" arriving sometime after next week's iPod event. He also expects Apple's global PC market share to rise to 4.2 percent by next year, up from 2.9 percent in 2007.
Abramsky maintains an Outperform rating on Apple shares.
Comments
He must have bought all he can of aapl and is long (as I am)!
I am not saying a lower cost model is unthinkable, but I would guess a $149 price point with full App Store and browsing access. They could drop the 3G and GPS at that price, and have 4GB. But dropping the App Store makes no sense, and therefore WiFi cannot be dropped either, so therefore a browser would also be included. I would imagine basically a plastic first generation iPhone, not a nano-with-phone.
...according to investment bank RBC Capital Markets, which also suggests the company may be looking into a low cost "iPod phone" to build on its momentum.
Though unsupported by any hard evidence, Abramsky said he has reason to believe the electronics maker is exploring the possibility of an "entry level, low cost
Idiot alert, look away quickly.
The guy has no reason to believe this.
It's a dumb idea.
There is a 100% chance that Apple will say nothing about an iPod phone, a nano-phone, or anything else that resembles shooting themselves in the foot.
This guy is just saying this to get some views on his otherwise view-challenged opinion.
Idiot alert.
Nothing to see here, move along.
A $99 iPhone with no browsing or App Store capability makes little sense to me, on at least two counts. First, it weakens the App Store. It would be like coming out with an iPod that did not connect to iTunes. Second, Apple is never a bottom feeder. Higher cost is part of the brand.
I am not saying a lower cost model is unthinkable, but I would guess a $149 price point with full App Store and browsing access. They could drop the 3G and GPS at that price, and have 4GB. But dropping the App Store makes no sense, and therefore WiFi cannot be dropped either, so therefore a browser would also be included. I would imagine basically a plastic first generation iPhone, not a nano-with-phone.
I don't know... I can see a $99 iPhone Nano. Just an iPod and a phone. That makes sense. All the other stuff is undoubtedly cool but riding on the crest of the iPhone media wave Apple might sell a ton of smaller devices. The issue may be more the iPod than the iPhone here. I think there is a very large number of people out there who carry a basic phone and an iPod and who either don't want the added services, or can't afford the very high cost of ownership.
Many of these people may be future iPhone users so giving them a taste of the experience makes sense (to me).
A $99 iPhone with no browsing or App Store capability makes little sense to me, on at least two counts.
agreed. part of the point of the iphone is that it is 3 devices in one.
1. an ipod
2. a phone
3. an internet device.
if you take out #3, you have anyone of a dozen or more music playing cell phones. big deal.
I think that this guy is dropping the ball on that prediction. I don't see it happening.
now what I can see is that in a year or so when the cost of the components comes down, the 8Gig phone could do down another $50-100 in price, along with the introduction of a 32Gig model. but I don't see anything of this nature coming up this month, even as an announcement
I don't know... I can see a $99 iPhone Nano. Just an iPod and a phone. That makes sense.
It does make sense in that there's a ton of people who would love to have a phone that doesn't suck, but don't want or need a $30/mo data plan (a mandate for all current iPhone owners). Plus, in light of recent news, AT&T's 3G networks probably couldn't support the influx of new users a $99 iPhone would bring. That said, I don't see an iPhone Nano breaking compatibility or usability with current iPhone apps; for example, it couldn't have a smaller, lower resolution screen.
I don't think apple is ready for another phone. I mean iPods are like what 10 years old now, I think at some point we will see various types of iPhones, but not yet and not until they work out all the kinks thats for sure!
i agree with your basic point, even if you are off about the age of the ipod (they were introduced in Oct 2001).
I suspect in fact that getting the kinks out is part of the reason for restricting service to one network. the other reason being money (seems that ATT footed part of the development deal in exchange for their exclusivity).
Apple needs to establish iPhone to be very stable and very popular first.
Its getting there.
In the UK i can't see how a smaller, less featured Nano Phone for free would entice many buyers. At £99/£30 per month its bigger brother is already value enough. I can't see Apple mudying the water at this early stage.
You could do something with easy music capability, better camera, and an easy-to-use phone, but I have trouble it could be more appealing to "those masses" than the RAZR-- it's people that don't understand the importance of the software, and just count features.
I do still wish Apple went the MVNO route though rather than making deals with AT&T.
I don't know... I can see a $99 iPhone Nano. Just an iPod and a phone. That makes sense. All the other stuff is undoubtedly cool but riding on the crest of the iPhone media wave Apple might sell a ton of smaller devices. The issue may be more the iPod than the iPhone here. I think there is a very large number of people out there who carry a basic phone and an iPod and who either don't want the added services, or can't afford the very high cost of ownership.
Many of these people may be future iPhone users so giving them a taste of the experience makes sense (to me).
On many counts I wouldn't I wouldn't have agreed until thinking about a little more.
First ,it occurred to me that using the iPod's menu for making a call would from the address book would be very easy to use, except for the off times that I need to dial the number directly. A clickwheel would be cumbersome for finding numbers and putting in text for SMS.
Then I wondered how an iPod Nano-like phone could make calls. I don't think you can have a proper number pad or a touch screen that forgoes the clickwheel for this type of phone. But then I thought about the 4G Nano needing to have dynamic buttons that visible change when you alter the orientation of the device for playing video.
So that leads me to a possible solution of Apple using a dynamically displayed clickwheel that will register inputs from multiple points. when used as a number/keypad.
I'm not exactly suggesting that Apple follow Nokia's circular number pad route, like in the 3560 (below), but that the the clickwheel could be a rectangle on the iPod instead of a circle, but with the center replaced with the button like all the Nanos and other Pods before it. It doesn't change the usage in your pocket for selecting music as it still has the button to hone in on to find the controls but offers more features.
(This has just been a quick brainstorm as to how I think it could happen based on the info at hand. This in o way implies what I think will happen next Tuesday or in the future. The article is dead on about there being a market segment out there that wants to consolidate their phone and iPod without getting too advanced, having the internet in their pocket or paying the associated data fees for it. If you have a better idea please post it.)
They will have to move in the prepaid segment someday and a $400-500 phone would do nothing there.
Why would it do nothing here?
agreed. part of the point of the iphone is that it is 3 devices in one.
1. an ipod
2. a phone
3. an internet device.
if you take out #3, you have anyone of a dozen or more music playing cell phones. big deal.
I think that this guy is dropping the ball on that prediction. I don't see it happening.
now what I can see is that in a year or so when the cost of the components comes down, the 8Gig phone could do down another $50-100 in price, along with the introduction of a 32Gig model. but I don't see anything of this nature coming up this month, even as an announcement
No 3 is great to have but strains a family's budget significantly. My daughter has a Samsung a707 that can play music. Synchronizing it is a major pain. Scrolling through music and playlists is a major pain. If there were a phone that had ipod functionality, she would jump on it in a second. As a father, I would approve it because i would not have to pay another $30 for data. She still can synchronize with "ipod phone" at home as she does now with the Samsung but with the ease of itunes. Anyone who currently has an ipod and a separate (basic) phone is a perfect candidate for such a "ipod phone" - and there are millions and millions of people in that category.
I don't know what you're all talking about... I'd buy such a phone.
I would, too. My primary phone requirement is size. Can't stand my phone being iPhone size, Blackberry size, Google phone size, etc.
I envision always having a Touch to meet my movie, tv, music, game & email needs (bascially a tiny, lovely tablet) as well as a small mobile. Now if that small mobile happened to be a NanoPhone? Chub-city....
But not holding my breath for this to happen....
On many counts I wouldn't I wouldn't have agreed until thinking about a little more.
First ,it occurred to me that using the iPod's menu for making a call would from the address book would be very easy to use, except for the off times that I need to dial the number directly. A clickwheel would be cumbersome for finding numbers and putting in text for SMS.
Then I wondered how an iPod Nano-like phone could make calls. I don't think you can have a proper number pad or a touch screen that forgoes the clickwheel for this type of phone. But then I thought about the 4G Nano needing to have dynamic buttons that visible change when you alter the orientation of the device for playing video.
So that leads me to a possible solution of Apple using a dynamically displayed clickwheel that will register inputs from multiple points. when used as a number/keypad.
I'm not exactly suggesting that Apple follow Nokia's circular number pad route, like in the 3560 (below), but that the the clickwheel could be a rectangle on the iPod instead of a circle, but with the center replaced with the button like all the Nanos and other Pods before it. It doesn't change the usage in your pocket for selecting music as it still has the button to hone in on to find the controls but offers more features.
(This has just been a quick brainstorm as to how I think it could happen based on the info at hand. This in o way implies what I think will happen next Tuesday or in the future. The article is dead on about there being a market segment out there that wants to consolidate their phone and iPod without getting too advanced, having the internet in their pocket or paying the associated data fees for it. If you have a better idea please post it.)
Now that's a gawd-awful lookin phone that SJ could REALLY make fun of......
The article is dead on about there being a market segment out there that wants to consolidate their phone and iPod without getting too advanced, having the internet in their pocket or paying the associated data fees for it. If you have a better idea please post it.
While there is a market for that, there are tons of phones on the market already that combine just a simple phone and your music.
Why Apple would bother to go backward and go after that market that has a lot of competition (and basically no prophets) is beyond me.
People who want to combine their music and simple phone that has no data plan already can.
They don't need an Apple branded product with neither a clean touch screen nor a clean click wheel but rather some mish-mash combination.
We will continue to hear about the nano-phone forever.
That's because they aren't going to build one, and that will mean people can keep saying it.
A better idea? There isn't one. Apple has the best on the table and is running with it.
My speculation on what they WILL do is focus on the next higher up market, and make the iPhone as is their low-end product. (people can say it becomes the nano-phone, it's just the classic iPhone to me)