UK iPhone price cut boosts confidence in June 3G launch
A 100 pound price cut on Apple's 8GB iPhone in the UK, confirmed by wireless carrier O2 on Wednesday, is the latest bit of anecdotal evidence to hint towards near-term release of a redesigned 3G model, according to one Wall Street analyst.
The 37 percent cut arrives on the heels of a 75 percent reduction of the same model in Germany, suggesting that Apple's European wireless partners are draining inventory of the 2.5G mobile handsets, which have been met with lackluster demand in the region, Piper Jaffray analyst Gene Munster told clients in a research note.
The price cuts, both of which end in June, "set the stage for the release of a new iPhone" that same month, he said.
In recent weeks, the analyst has polled over 60 stateside Apple retail stores on their supply of both the 8GB and 16GB iPhone models to compare inventories with those in Europe. Initially, his first two rounds of 20-store checks (1, 2) found close to no iPhones within the company's retail channel. However, a most recent 22-store check found that over 80 percent maintained limited supply of 8GB models and 50 percent had 16GB models on hand.
"We conclude that Apple is likely pacing its remaining supply of phones by trickling units into its retail channel until the new model is released," Munster said. "While limited availability of iPhones would put downward pressure on iPhone units in the June quarter, we believe it would be more than offset by the price cuts in Europe and the launch of a new model in [the month of] June."
Come June, the analyst sees a 3G model with a "redesigned exterior" fetching between $349 and $399. He believes the widely anticipate update will be the first and only significant change to Apple's handset offerings before the company begins a model expansion coupled with aggressive price reductions early next year.
"We believe Apple will follow the release of the 3G iPhone in June with the addition of one or two more models by early 2009. The most likely timing of these lower priced, third-generation iPhones is Macworld 09," Munster wrote.
"While Apple may try to debut a cheaper iPhone ahead of the 2008 holiday shopping season, we do not believe this scenario is likely. It is more likely that Apple will simply increase the capacities of the 3G models to 16GB and 32GB ahead of the holidays, simultaneous with new iPods and release the third-gen iPhones after the holidays in early 2009."
The end result, according to the analyst and his supply chain contacts in the Far East, is that come January, the Cupertino-based company will showcase "an entire family" of handsets. The move would mirror the slow diversification of the iPod family, which over its years entered new price points with each new model that was brought to the table.
As such, Munster continues to believe the inflection point in iPhone sales won't come until 2009 when cheaper iPhones are widely available.
"Specifically, we believe Apple will also introduce an iPhone between $200 and $300 in early 2009," he told clients. "We are modeling for iPhone average selling price to drop from $489 in 2007 to $365 in 2008 to $314 in 2009. This price drop, along with the continued international expansion of the iPhone, is critical to our iPhone unit estimate of 45 million [unit sales] in 2009."
Munster maintained his Buy rating and $250 price target on shares of Apple.
The 37 percent cut arrives on the heels of a 75 percent reduction of the same model in Germany, suggesting that Apple's European wireless partners are draining inventory of the 2.5G mobile handsets, which have been met with lackluster demand in the region, Piper Jaffray analyst Gene Munster told clients in a research note.
The price cuts, both of which end in June, "set the stage for the release of a new iPhone" that same month, he said.
In recent weeks, the analyst has polled over 60 stateside Apple retail stores on their supply of both the 8GB and 16GB iPhone models to compare inventories with those in Europe. Initially, his first two rounds of 20-store checks (1, 2) found close to no iPhones within the company's retail channel. However, a most recent 22-store check found that over 80 percent maintained limited supply of 8GB models and 50 percent had 16GB models on hand.
"We conclude that Apple is likely pacing its remaining supply of phones by trickling units into its retail channel until the new model is released," Munster said. "While limited availability of iPhones would put downward pressure on iPhone units in the June quarter, we believe it would be more than offset by the price cuts in Europe and the launch of a new model in [the month of] June."
Come June, the analyst sees a 3G model with a "redesigned exterior" fetching between $349 and $399. He believes the widely anticipate update will be the first and only significant change to Apple's handset offerings before the company begins a model expansion coupled with aggressive price reductions early next year.
"We believe Apple will follow the release of the 3G iPhone in June with the addition of one or two more models by early 2009. The most likely timing of these lower priced, third-generation iPhones is Macworld 09," Munster wrote.
"While Apple may try to debut a cheaper iPhone ahead of the 2008 holiday shopping season, we do not believe this scenario is likely. It is more likely that Apple will simply increase the capacities of the 3G models to 16GB and 32GB ahead of the holidays, simultaneous with new iPods and release the third-gen iPhones after the holidays in early 2009."
The end result, according to the analyst and his supply chain contacts in the Far East, is that come January, the Cupertino-based company will showcase "an entire family" of handsets. The move would mirror the slow diversification of the iPod family, which over its years entered new price points with each new model that was brought to the table.
As such, Munster continues to believe the inflection point in iPhone sales won't come until 2009 when cheaper iPhones are widely available.
"Specifically, we believe Apple will also introduce an iPhone between $200 and $300 in early 2009," he told clients. "We are modeling for iPhone average selling price to drop from $489 in 2007 to $365 in 2008 to $314 in 2009. This price drop, along with the continued international expansion of the iPhone, is critical to our iPhone unit estimate of 45 million [unit sales] in 2009."
Munster maintained his Buy rating and $250 price target on shares of Apple.
Comments
But April and May are going to be a disaster in terms of iPhone sales. I guess Apple is counting on the breathless anticipation of the upcoming model to dominate the press instead of the "iPhone sales slow to a trickle" story.
C.
This is all good, I guess. June looks like a lock.
But April and May are going to be a disaster in terms of iPhone sales. I guess Apple is counting on the breathless anticipation of the upcoming model to dominate the press instead of the "iPhone sales slow to a trickle" story.
Don't forget that not everyone follows Apple stories as closely as us MacGeeks do. Most of the 'public' won't know that a new iPhone is expected so if they were planning on buying one, they would have no reason to wait.
Don't forget that not everyone follows Apple stories as closely as us MacGeeks do. Most of the 'public' won't know that a new iPhone is expected so if they were planning on buying one, they would have no reason to wait.
Though I am the proud owner of Apple stock, I find myself at a loss over the excitement we have all been hearing for what is, after all, only a cell phone. After having watched a segment on 60 minutes last weekend about a possible cure for cancer, I have yet to feel the tenor of such an announcement be reflected in the the American Media or the internet blogosphere. Basically, folks, its just a cell phone and though it will soon be in your hands to give you as much radiation as you like, look towards the cure for cancer as holding more gravity than an announcement of 3g, for G-d's sake. After all, we will need that cure sooner rather than later with the real possibility of radiation from not only cell phones, but wireless networks, being harmful and toxic to our bodies.
Though I am the proud owner of Apple stock, I find myself at a loss over the excitement we have all been hearing for what is, after all, only a cell phone. After having watched a segment on 60 minutes last weekend about a possible cure for cancer, I have yet to feel the tenor of such an announcement be reflected in the the American Media or the internet blogosphere. Basically, folks, its just a cell phone and though it will soon be in your hands to give you as much radiation as you like, look towards the cure for cancer as holding more gravity than an announcement of 3g, for G-d's sake. After all, we will need that cure sooner rather than later with the real possibility of radiation from not only cell phones, but wireless networks, being harmful and toxic to our bodies.
Tinfoil hats block harmful rays, with the added benefit that the government
cannot read your thoughts.
Tinfoil hats block harmful rays, with the added benefit that the government
cannot read your thoughts.
But seriously, the first part of the point is true. It is just a phone and the hysteria does seem out of proportion at times....
... tinfoil, eh? Maybe I can dig some out of my neighbor's recycling... hmmm....
After all, we will need that cure sooner rather than later with the real possibility of radiation from not only cell phones, but wireless networks, being harmful and toxic to our bodies.
It's a pretty safe bet that we will develop cures for most cancers before there is any proof that ultra-weak electromagnetic fields are carcinogenic.
C.
There might be export restrictions. You know, military technology and so forth.
I would check with homeland security before I tried to take one out of the US.
It's a pretty safe bet that we will develop cures for most cancers before there is any proof that ultra-weak electromagnetic fields are carcinogenic.
C.
Getting closer, sir....http://articles.mercola.com/sites/ar...our-cells.aspx
Though I am the proud owner of Apple stock, I find myself at a loss over the excitement we have all been hearing for what is, after all, only a cell phone. After having watched a segment on 60 minutes last weekend about a possible cure for cancer, I have yet to feel the tenor of such an announcement be reflected in the the American Media or the internet blogosphere. Basically, folks, its just a cell phone and though it will soon be in your hands to give you as much radiation as you like, look towards the cure for cancer as holding more gravity than an announcement of 3g, for G-d's sake. After all, we will need that cure sooner rather than later with the real possibility of radiation from not only cell phones, but wireless networks, being harmful and toxic to our bodies.
What about second-hand radiation?
It's not like the Nano, where apple had only to reduce the size of the clickwheel and put less memory in.
If you try to reduce the size of the iPhone, you'll have a smaller screen and multi-touch will become more difficult (especially typing) and the technology will, due to miniaturization, be even more expensive.
Just look at all the applications and games that are going to be (or are being) developed for the iPhone. For most of these programmes, you need the iPhone as it is.
When all this software comes out, the iPhone will be a completely original, hand-held computer. I think it's going to be huge; but I don't think Apple will try to develop a crippled little sister.
Though I am the proud owner of Apple stock, I find myself at a loss over the excitement we have all been hearing for what is, after all, only a cell phone. After having watched a segment on 60 minutes last weekend about a possible cure for cancer, I have yet to feel the tenor of such an announcement be reflected in the the American Media or the internet blogosphere. Basically, folks, its just a cell phone and though it will soon be in your hands to give you as much radiation as you like, look towards the cure for cancer as holding more gravity than an announcement of 3g, for G-d's sake. After all, we will need that cure sooner rather than later with the real possibility of radiation from not only cell phones, but wireless networks, being harmful and toxic to our bodies.
Damn. Is this a medical or tech site? Can't people have a little fun in there life without the negatives? I've had two people(dad and sister) pass on from cancer so don't get me started.
This is all good, I guess. June looks like a lock.
But April and May are going to be a disaster in terms of iPhone sales.
I don't think sales will be bad. The reduction in price will be the tipping point for many people. Most are not paying any attention to Apple rumors.
What about second-hand radiation?
Just think if you are the only one in the offfice not wearing a tin foil hat? You get all the normal radiation plus ALL the reflected radiation. Your head will swell up & explode within minutes.
I am sick of these pinhead analysts predicting that Apple will do all these amazing products at amazing price points (which they never do) just to manipulate the stock price.
"$200 iPhone" My White Irish Ass.
Damn. Is this a medical or tech site? Can't people have a little fun in there life without the negatives? I've had two people(dad and sister) pass on from cancer so don't get me started.
If you, my friend, find your fun in life in anticipating cell phones, you my friend need a new life.
There's a lot of talk and speculation going on right now and I'm trying not to get caught up in it.
I'm certain we'll get a 3G iPhone in June, but I'm lead to think 'What else?', there's been talk of the chip also being capable of GPS, that would be cool. And would probably be the only thing that would make me rush out and upgrade my iPhone to the new one. Just an upgrade to 3G I wouldn't deem worthwhile. I'm not bothered about storage either. 32GB? Great. 64GB? Even better. But not needed for me.
3G iPhone. Launching in June. You can put your bank balance on it.
You can put whatever pennies you've got in your back pocket on the chance of it having GPS. But it would be cool if they did...