If Apple came out with a world phone, both GSM & CDMA, then there would be no market they could not enter. I'm hopping that the AT&T contract ends no later than June 09 so Apple could sell into the Verizon market. That should be easy now that Verizon allows any phone on their network.
I'd have the whole family on the iPhone if it were on Verizon. Verizon is the only reliable reception in our area.
Despite having to compete against the iPhone for 9 months out of the last fiscal year, as well as the announced but not shipping iPhone 5 months prior to that, RIMM still doubled their revenue.
Oh, I'm not saying the iPhone will kill RIMM. I'm saying what's the assumption built into its current stock valuation? That there will be no meaningful competition coming from the iPhone? Especially in the consumer market? Especially with iPhone turning 3G?
See your numbers are for the current, 2.5G iPhone. I don't know if it's all hype but seems to me the whole world has been waiting for the 3G version.
Your numbers in the first paragraph though are low... $400 per phone is low, I think we might just see $700 unsubsidized iPhones, and $400 subsidized with contract. Either way Apple gets far more than $400. Also the current forward PE is 27. Finally yes, there's no way of telling how much of that is already baked in, probably a lot of it.
I was purposely being conservative at every stage. And, I was multiplying by P/EBIT, not P/E. Please read my post again.
Report: Apple places order for 24-25 million 3G iPhones
I mean, really? The report only says that Apple expects to sell that many during the model's lifecycle. Have they really walked up to manufacturer and said, "Yes, we'd like 25 million of these ASAP, please."
Well, I doubt it is as simple as you sarcastically offer--there is probably more to this kind of deal than we ever see.
Apple might only put in an order for the Chinese manufacturer (Foxconn Electronics) for X million but tell them that they anticipate Y million over the course of 12 months. The manufacturer has to know what size facility to procure, how much material to gather and how many employees to hire. When the manufacturer bids out the contract, they need to know what kind of economies of scale they are going to be able to take advantage of to give an accurate bid.
I would not be in the least surprised for there to be benchmarks in the contract for manufacture that obligate Apple to compensate the manufacturer if some minimum (Y) is not achieved even when Apple only orders X initially. These manufacturers work off a relatively thin margin; I cannot see them assuming all the risk--it would not be worth it. Apple probably has to shoulder the risk, but that is OK because they are the ones who stand to gain HUGE profits if they can pull off what they are attempting.
So to rephrase your quote with another that is still simplistic but more realistic in my eyes, maybe Apple walks up to the manufacturer and says "Give us a price to build this phone. Well take 5 Milion by August but you have to have capacity to produce 25 million by next June. If we don't order at least 18 million in that time frame, we will pay you a penalty of 10$ million to cover capital costs."
Quote:
Originally Posted by AppleInsider
Citing sources at component suppliers as well as foreign institutional investors, the Chinese-language Commercial Times reports that the Taipei-based manufacturer was recently instructed by Apple to begin procuring component materials for the next-generation touch-screen handsets for an initial test build no later than the end of May.
Think about it, Foxconn would have to have some idea of what they were aiming for and maybe some guarantees before "procuring component materials.
Quote:
In March, Commercial Times reported that Foxconn was amongst those Taiwanese assemblers bidding on Apple's 3G iPhone contract, with DowJones claiming shortly thereafter that a deal between the two companies had been reached.
If Apple came out with a world phone, both GSM & CDMA, then there would be no market they could not enter. I'm hopping that the AT&T contract ends no later than June 09 so Apple could sell into the Verizon market. That should be easy now that Verizon allows any phone on their network.
Verizon won't have a chance at the iPhone until it transitions to LTE for its data network.
Verizon won't have a chance at the iPhone until it transitions to LTE for its data network.
We really don't know that, actually. It could happen well before LTE.
Building two versions of the same phone (CDMA and GSM) isn't all that difficult. The issues are known, the parts and chipsets are readily available. Motorola, which among phone makers seems to be having the hardest time executing, didn't find it too hard to do with the RAZR.
The true hurdle to the iPhone getting on Verizon (and/or Sprint) is really the business deal. Will Verizon accept Apple's terms? They've said no once already. \
Regarding some of the sky-high sales estimates put out in this thread by people... wow.
I mean, I definitely do believe that 3G will improve iPhone sales a lot, as will the 2.0 software, and the availability of the iPhone in more markets. But some of these sales estimates/expectations from people are just in the stratosphere. No, scratch that, they're in the Van Allen belts. And this, with the US entering recession?
Apple might only put in an order for the Chinese manufacturer (Foxconn Electronics) for X million but tell them that they anticipate Y million over the course of 12 months. The manufacturer has to know what size facility to procure, how much material to gather and how many employees to hire. When the manufacturer bids out the contract, they need to know what kind of economies of scale they are going to be able to take advantage of to give an accurate bid.
I would not be in the least surprised for there to be benchmarks in the contract for manufacture that obligate Apple to compensate the manufacturer if some minimum (Y) is not achieved even when Apple only orders X initially. These manufacturers work off a relatively thin margin; I cannot see them assuming all the risk--it would not be worth it. Apple probably has to shoulder the risk, but that is OK because they are the ones who stand to gain HUGE profits if they can pull off what they are attempting.
So to rephrase your quote with another that is still simplistic but more realistic in my eyes, maybe Apple walks up to the manufacturer and says "Give us a price to build this phone. Well take 5 Milion by August but you have to have capacity to produce 25 million by next June. If we don't order at least 18 million in that time frame, we will pay you a penalty of 10$ million to cover capital costs."
What you and AI both seem to be talking about is more an estimate than a solid order.
It may be how business is done (or may not be), but the article title is still misleading. Perhaps "ongoing agreement with a target of 25 million" might be closer.
It may be how business is done (or may not be), but the article title is still misleading. Perhaps "ongoing agreement with a target of 25 million" might be closer.
How do you propose to put that in a concise headline?
Seems to me like apple signed a one year with AT&T that ends on June 29,2008. June 29 , 2008, Apple comes out with 2G -3G phone that does both edge and 3 G. Any carrier in the world can use it . Video ichat ,, new camera , video capture with voice. Decent price and u sold 100 million in 2009 . Just like the Razr phone did.
Seems to me like apple signed a one year with AT&T that ends on June 29,2008. June 29 , 2008, Apple comes out with 2G -3G phone that does both edge and 3 G. Any carrier in the world can use it . Video ichat ,, new camera , video capture with voice. Decent price and u sold 100 million in 2009 . Just like the Razr phone did.
That would be nice for many, but I can't imagine that being the deal that was penned. Personally, being a US citizen I will continue to use AT&T and so paying several hundred dollars more for the phone just so I can take it to T-Mobile where 3G isn't compatible makes absolutely no sense to me. I don't want a CDMA phone either as I travel often.
That is impressive, but how many of those were free with contract?
A lot were either free or close to it. Motorola started whoring it up pretty bad with the RAZR after only a year or two. That's why the RAZR brand doesn't mean too much anymore.
That and the fact that every phonemaker has thin phones now.
We really don't know that, actually. It could happen well before LTE. The true hurdle to the iPhone getting on Verizon (and/or Sprint) is really the business deal. Will Verizon accept Apple's terms? They've said no once already.
No its not difficult. I'm sure Apple isn't thinking about Sprint. Why produce a CDMA for Verizon when you know it will offer LTE in a few years.
No its not difficult. I'm sure Apple isn't thinking about Sprint. Why produce a CDMA for Verizon when you know it will offer LTE in a few years.
Because it doesn't cost a tremendous amount of money to engineer a CDMA version, and CDMA will be Verizon's mainstay for another couple of years, at least.
Why miss out on all that revenue? Verizon iPhone sales would easily outstrip Apple's outlay to make a CDMA version, unless the iPhone completely bombed on Verizon. Which I doubt it would. Not to mention that Apple might have to make a CDMA version anyway, for the Korean market.
Quote:
Verizon would not say no now.
See samab's comment. Verizon did indeed beat ATT in net customer adds in Q1, even with the iPhone in play. VZW is a very tough, very bottom-line oriented company (even by big-corporation standards), and may figure that Apple still needs them more than Verizon needs Apple.
I think they'd be wrong in that calculation, but it doesn't mean they won't make it. Again.
It's like NBC vs Apple... NBC wants very much to sell stuff on iTunes, but not on Apple's terms. But if Apple gave even a little bit...
Comments
If Apple came out with a world phone, both GSM & CDMA, then there would be no market they could not enter. I'm hopping that the AT&T contract ends no later than June 09 so Apple could sell into the Verizon market. That should be easy now that Verizon allows any phone on their network.
I'd have the whole family on the iPhone if it were on Verizon. Verizon is the only reliable reception in our area.
Despite having to compete against the iPhone for 9 months out of the last fiscal year, as well as the announced but not shipping iPhone 5 months prior to that, RIMM still doubled their revenue.
Oh, I'm not saying the iPhone will kill RIMM. I'm saying what's the assumption built into its current stock valuation? That there will be no meaningful competition coming from the iPhone? Especially in the consumer market? Especially with iPhone turning 3G?
See your numbers are for the current, 2.5G iPhone. I don't know if it's all hype but seems to me the whole world has been waiting for the 3G version.
Your numbers in the first paragraph though are low... $400 per phone is low, I think we might just see $700 unsubsidized iPhones, and $400 subsidized with contract. Either way Apple gets far more than $400. Also the current forward PE is 27. Finally yes, there's no way of telling how much of that is already baked in, probably a lot of it.
I was purposely being conservative at every stage. And, I was multiplying by P/EBIT, not P/E. Please read my post again.
Report: Apple places order for 24-25 million 3G iPhones
I mean, really? The report only says that Apple expects to sell that many during the model's lifecycle. Have they really walked up to manufacturer and said, "Yes, we'd like 25 million of these ASAP, please."
Well, I doubt it is as simple as you sarcastically offer--there is probably more to this kind of deal than we ever see.
Apple might only put in an order for the Chinese manufacturer (Foxconn Electronics) for X million but tell them that they anticipate Y million over the course of 12 months. The manufacturer has to know what size facility to procure, how much material to gather and how many employees to hire. When the manufacturer bids out the contract, they need to know what kind of economies of scale they are going to be able to take advantage of to give an accurate bid.
I would not be in the least surprised for there to be benchmarks in the contract for manufacture that obligate Apple to compensate the manufacturer if some minimum (Y) is not achieved even when Apple only orders X initially. These manufacturers work off a relatively thin margin; I cannot see them assuming all the risk--it would not be worth it. Apple probably has to shoulder the risk, but that is OK because they are the ones who stand to gain HUGE profits if they can pull off what they are attempting.
So to rephrase your quote with another that is still simplistic but more realistic in my eyes, maybe Apple walks up to the manufacturer and says "Give us a price to build this phone. Well take 5 Milion by August but you have to have capacity to produce 25 million by next June. If we don't order at least 18 million in that time frame, we will pay you a penalty of 10$ million to cover capital costs."
Citing sources at component suppliers as well as foreign institutional investors, the Chinese-language Commercial Times reports that the Taipei-based manufacturer was recently instructed by Apple to begin procuring component materials for the next-generation touch-screen handsets for an initial test build no later than the end of May.
Think about it, Foxconn would have to have some idea of what they were aiming for and maybe some guarantees before "procuring component materials.
In March, Commercial Times reported that Foxconn was amongst those Taiwanese assemblers bidding on Apple's 3G iPhone contract, with DowJones claiming shortly thereafter that a deal between the two companies had been reached.
If Apple came out with a world phone, both GSM & CDMA, then there would be no market they could not enter. I'm hopping that the AT&T contract ends no later than June 09 so Apple could sell into the Verizon market. That should be easy now that Verizon allows any phone on their network.
Verizon won't have a chance at the iPhone until it transitions to LTE for its data network.
Verizon won't have a chance at the iPhone until it transitions to LTE for its data network.
We really don't know that, actually. It could happen well before LTE.
Building two versions of the same phone (CDMA and GSM) isn't all that difficult. The issues are known, the parts and chipsets are readily available. Motorola, which among phone makers seems to be having the hardest time executing, didn't find it too hard to do with the RAZR.
The true hurdle to the iPhone getting on Verizon (and/or Sprint) is really the business deal. Will Verizon accept Apple's terms? They've said no once already.
.
I mean, I definitely do believe that 3G will improve iPhone sales a lot, as will the 2.0 software, and the availability of the iPhone in more markets. But some of these sales estimates/expectations from people are just in the stratosphere. No, scratch that, they're in the Van Allen belts. And this, with the US entering recession?
All you can say is...
.
Apple might only put in an order for the Chinese manufacturer (Foxconn Electronics) for X million but tell them that they anticipate Y million over the course of 12 months. The manufacturer has to know what size facility to procure, how much material to gather and how many employees to hire. When the manufacturer bids out the contract, they need to know what kind of economies of scale they are going to be able to take advantage of to give an accurate bid.
I would not be in the least surprised for there to be benchmarks in the contract for manufacture that obligate Apple to compensate the manufacturer if some minimum (Y) is not achieved even when Apple only orders X initially. These manufacturers work off a relatively thin margin; I cannot see them assuming all the risk--it would not be worth it. Apple probably has to shoulder the risk, but that is OK because they are the ones who stand to gain HUGE profits if they can pull off what they are attempting.
So to rephrase your quote with another that is still simplistic but more realistic in my eyes, maybe Apple walks up to the manufacturer and says "Give us a price to build this phone. Well take 5 Milion by August but you have to have capacity to produce 25 million by next June. If we don't order at least 18 million in that time frame, we will pay you a penalty of 10$ million to cover capital costs."
What you and AI both seem to be talking about is more an estimate than a solid order.
It may be how business is done (or may not be), but the article title is still misleading. Perhaps "ongoing agreement with a target of 25 million" might be closer.
.
It may be how business is done (or may not be), but the article title is still misleading. Perhaps "ongoing agreement with a target of 25 million" might be closer.
How do you propose to put that in a concise headline?
Seems to me like apple signed a one year with AT&T that ends on June 29,2008. June 29 , 2008, Apple comes out with 2G -3G phone that does both edge and 3 G. Any carrier in the world can use it . Video ichat ,, new camera , video capture with voice. Decent price and u sold 100 million in 2009 . Just like the Razr phone did.
That would be nice for many, but I can't imagine that being the deal that was penned. Personally, being a US citizen I will continue to use AT&T and so paying several hundred dollars more for the phone just so I can take it to T-Mobile where 3G isn't compatible makes absolutely no sense to me. I don't want a CDMA phone either as I travel often.
Decent price and u sold 100 million in 2009 . Just like the Razr phone did.
RAZR sold 100 million from 2004 to 2007, not in one year. Still impressive though.
Most 3G/HSDPA chipsets can already do EDGE, btw. But not every market has significant amounts of EDGE coverage.
.
RAZR sold 100 million from 2004 to 2007, not in one year. Still impressive though.
That is impressive, but how many of those were free with contract?
How do you propose to put that in a concise headline?
Report: Apple enters agreement, target: 25 million 3G iPhones produced
It is more accurate. If that still matters in journalism.
.
That is impressive, but how many of those were free with contract?
A lot were either free or close to it. Motorola started whoring it up pretty bad with the RAZR after only a year or two. That's why the RAZR brand doesn't mean too much anymore.
That and the fact that every phonemaker has thin phones now.
.
Report: Apple enters agreement, target: 25 million 3G iPhones produced
It is more accurate. If that still matters in journalism.
.
Keep callin' 'em on their headlines. Who else is watching the watchers?
We really don't know that, actually. It could happen well before LTE. The true hurdle to the iPhone getting on Verizon (and/or Sprint) is really the business deal. Will Verizon accept Apple's terms? They've said no once already.
No its not difficult. I'm sure Apple isn't thinking about Sprint. Why produce a CDMA for Verizon when you know it will offer LTE in a few years.
Verizon would not say no now.
No its not difficult. I'm sure Apple isn't thinking about Sprint. Why produce a CDMA for Verizon when you know it will offer LTE in a few years.
Verizon would not say no now.
Why not? Verizon just beat AT&T Q1 net adds numbers --- without the iphone. AT&T no longer gives out iphone activation numbers.
No its not difficult. I'm sure Apple isn't thinking about Sprint. Why produce a CDMA for Verizon when you know it will offer LTE in a few years.
Because it doesn't cost a tremendous amount of money to engineer a CDMA version, and CDMA will be Verizon's mainstay for another couple of years, at least.
Why miss out on all that revenue? Verizon iPhone sales would easily outstrip Apple's outlay to make a CDMA version, unless the iPhone completely bombed on Verizon. Which I doubt it would. Not to mention that Apple might have to make a CDMA version anyway, for the Korean market.
Verizon would not say no now.
See samab's comment. Verizon did indeed beat ATT in net customer adds in Q1, even with the iPhone in play. VZW is a very tough, very bottom-line oriented company (even by big-corporation standards), and may figure that Apple still needs them more than Verizon needs Apple.
I think they'd be wrong in that calculation, but it doesn't mean they won't make it. Again.
It's like NBC vs Apple... NBC wants very much to sell stuff on iTunes, but not on Apple's terms. But if Apple gave even a little bit...
.