Whether this is true or just a rumor, I think it is bad news for both Palm and Sprint that this got out. Whereas both companies were probably hoping for switchers from Verizon or ATT and a big burst of sales, now most customers of those other carriers will probably figure they'll just wait 6 months until their own companies to carry the phone. From what is being said about Palm's financial situation, they probably can't wait that long to sell large numbers of the phone.
No, it's not necessarily bad news. Sprint has nearly 50M subscribers. They'll probably find more than a sufficient number to switch from within their base (or by preventing defection). Also, one can't rule out that a company such as Sprint may provide some sort of implicit financing (e.g., through extra subsidies) for Palm, depending on how it pans out.
Whether this is true or just a rumor, I think it is bad news for both Palm and Sprint that this got out. Whereas both companies were probably hoping for switchers from Verizon or ATT and a big burst of sales, now most customers of those other carriers will probably figure they'll just wait 6 months until their own companies to carry the phone. From what is being said about Palm's financial situation, they probably can't wait that long to sell large numbers of the phone.
I know that there are going to be a lot of "if's" in my theory, but here it goes:
If Apple signed with Verizon in the first place
where have you been for the last 2 years? That's not a theory. Apple did make an offer to Verizon and was rejected. Now Verizon is kicking itself in the ass and paying shill bloggers to suggest that there is a Verizon iPhone soon to stop the flow of switchers.
I know that there are going to be a lot of "if's" in my theory, but here it goes:
If Apple wasn't too greedy in the first place, they could have wiped Palm out of existence right now.
If Apple signed with Verizon in the first place --- we would have seen both CDMA and GSM in the first gen iphone (GSM for the European/international market), we would have seen a subsidized price instead of the orginial $600 price tag, we would have seen a normal carrier relationship instead of trying the revenue sharing route (which in turn would have not scared away potential carrier partners), we would have seen 70 country launch for the first gen iphone (instead of 4 carriers).
samab has written this before and it's been hashed over before.
If Apple had signed with Verizon on Verizon's terms, the iPhone would've been a dud, and there would've been no real smartphone revolution. To counter samab's extreme case, here's the Verizon circa 2007 extreme - no wi-fi, no iTunes store access, no at-home activation via iTunes, no direct Apple iPhone updates, no iPod touch allowed, and a big Verizon logo on the iPhone.
Apple has really paid the price by not insisting that Steve Jobs, the greedy CEO, consult with samab, the know-it-all genius.
samab has written this before and it's been hashed over before.
If Apple had signed with Verizon on Verizon's terms, the iPhone would've been a dud, and there would've been no real smartphone revolution. To counter samab's extreme case, here's the Verizon circa 2007 extreme - no wi-fi, no iTunes store access, no at-home activation via iTunes, no direct Apple iPhone updates, no iPod touch allowed, and a big Verizon logo on the iPhone.
Apple has really paid the price by not insisting that Steve Jobs, the greedy CEO, consult with samab, the know-it-all genius.
Nobody really knows what Verizon demanded from Apple --- so we can't go with conspiracy theories about how Verizon would have crippled the iphone if they signed the deal with Apple. And I am restricting my theory to the first gen iphone only, so the iphone apps on the itunes store isn't on the agenda and there were no killer iphone updates on the first gen iphone.
What I am talking about is really the basic stuff that we already know:
1) Verizon disagreed on limited distribution (ie. Apple store and AT&T corporate store only) --- which angered AT&T's agent stores and other distribution partners (like RadioShack and BestBuy).
2) if there were wider distribution, we wouldn't have home activation problems in the first place.
3) Many items in the first gen iphone agreement was quickly reversed --- stuff like the original $600 price tag, revenue sharing, limited distribution (quickly open to Bestbuy and Walmart), handset warranty handling (many iphone carriers handle iphone warranty elsewhere).
4) Apple wanted too much from other carriers around the world because AT&T agreed on revenue sharing --- hurt the first gen iphone when negotiations took forever and limited to 3 European countries.
Even if the Verizon iphone would have been a complete dud --- Apple would have signed far more international carriers because Apple wouldn't have insisted on stuff that never would have worked in the first place (full priced $600 iphone with a 2 year contract with revenue sharing) --- Apple would have sold far more than the 7 million first gen iphones worldwide.
Palm was in really bad shape 2-3 years ago --- it wouldn't have taken much to push them over the edge. Hell, if Apple sold 3 million more first gen iphones and Palm sold 3 million less smartphones 2 years ago --- we might have already seen Palm's demise. Would Apple make less money with Verizon on the first gen iphone? Most likely --- but as the VISA commercial said it best: wiping out a competitor like Palm is priceless.
where have you been for the last 2 years? That's not a theory. Apple did make an offer to Verizon and was rejected. Now Verizon is kicking itself in the ass and paying shill bloggers to suggest that there is a Verizon iPhone soon to stop the flow of switchers.
Except reality doesn't match with your theory.
If you take cheap prepaid Tracfone out of the equation --- AT&T had NEVER beaten Verizon in net subscriber additons since the iphone was launched. Why would Verizon need to stop the flow of switchers when Verizon is beating AT&T in every single quarter in net subscriber adds?
Wait a second: I think I may have misinterpreted what you said here; when you say "making....." do you mean margins or revenues? If the former, my point is even stronger, no?
I think margin per phone is better than you stated, but gross margin excludes operational and marketing costs. They need to sell a lot of phones to break even when you consider fixed costs rather than incremental profit per device.
Even with Verizon and At&t getting it six months later, they seem to be missing key ingredients for a rebound. I think they will be constrained on addressable audience, production, and competition. When are Instinct customers eligible for a phone upgrade? Would they buy it?
From a stock perspective, I just think PALM is over-rated now.
I lost track of all those threads praising the Pre's physical keyboard. I pointed out several advantages of the software keyboard against the phone-sized physical keyboard in several posts. And here is the first review:
The Pre feels really good in your hand in terms of size and shape, but there?s a real plasticky aura about it. Additionally, things aren?t looking good for that QWERTY either. And hey, you know we take them keyboards seriously! When you try and type on the top row of keys, your finger hits the bottom part of the front piece and on top of that, you often hit multiple keys at the same time while typing. It?s actually really frustrating and doesn?t bode well for such a fantastic social communication/personal/business tool.
I think margin per phone is better than you stated, but gross margin excludes operational and marketing costs. They need to sell a lot of phones to break even when you consider fixed costs rather than incremental profit per device.
Even with Verizon and At&t getting it six months later, they seem to be missing key ingredients for a rebound. I think they will be constrained on addressable audience, production, and competition. When are Instinct customers eligible for a phone upgrade? Would they buy it?
From a stock perspective, I just think PALM is over-rated now.
If you don't see the difference between gross margin (Revenues - CGS, which you are referring to) and operating - i.e., EBIT - margin (which is what I've been talking about from the outset), I am not sure it is a great idea to be making statements such as a stock being "...over-rated."
Right-there is no excuse for not having a CDMA version no matter how crippled. Or even a different phone alltogether. People and corporations simply will not switch their carriers no matter how great the device is. The cellphone market is extremely fickle with new products arriving monthly. This will be an extremely interesting year for smartphone competition.
Perhaps we can go back to computer desktops and laptops again as the main focus of our daily discussions.
I work for at&t and have seen numerous consumers, and business customers switching from other carriers to at&t specifically for the iphone. Now all the people i have talked to will say that they switched for the iphone and then they will complain about their previous service. I have respect for every mobile carrier however sprint-nextel is falling apart. The palm pre looks like a great device, but what is the point of having a great device if your cellular network is not very expansive? Wouldnt it be fair to say that having a small network would impact the functionality of the device?
Will apple partner up with verizon? probably later on down the road. Verizon needs to build up their international network however. I agree with techstud that the mobile world does get numerous phones in every month. However when dubbed the "Iphone killer" the company who made the device better come out strong because look what had happened to the other supposed "iphone killer" the blackberry storm, the blackberry storm was rated the worst gadget by engadget magazine.
However when dubbed the "Iphone killer" the company who made the device better come out strong because look what had happened to the other supposed "iphone killer" the blackberry storm, the blackberry storm was rated the worst gadget by engadget magazine.
Doesn't matter, isn't it?
The curve outsold the iphone and the storm took the 3rd spot after the 2nd place iphone.
The Pre may not be as refined as the iPod and does have the apps. The iPod has indeed stimulated the public's interest - and demand - in smart phones. However, the iPhone is restricted to ATT. Customers with Sprint may not want to switch to ATT due to cost, family and corporate (few) plans... VZ customers are even more sticky. In other words, the market that the Pre can address is significant. I have a smart phone with Sprint and they made me sign initially with their data plan but I cancelled it with no penalty... just said the reception was poor. I expect Sprint to be flexible with their data plans.
Equally important is the overseas market where the iPhone is restricted or sold as a premium product. At the very least they got a CDMA product... that is 20% of the market that Apple does not touch.
Most of the music people have is downloaded from their PCs to the smart phones... so access to iTunes is not essential for music. However, the drag will be no apps at this time. Aside from the iPhone the competition for the this phone is not impressive from Samsung, etc. The RIMM products are mostly for mail, etc... though there is consumer use.
With market cap of $1.5 B the stock makes of long shot side bet... I was not smart enough to have bought at $1.5/s, but made a small bet today. Any kind of success and this market cap could make multiples.
If you don't see the difference between gross margin (Revenues - CGS, which you are referring to) and operating - i.e., EBIT - margin (which is what I've been talking about from the outset), I am not sure it is a great idea to be making statements such as a stock being "...over-rated."
I guess I am confused by why you would use operating margin as metric for an unprofitable company; traditionally you would take gross margin for a product, which can generally be divined based on similar products and company history. For Palm, that is ~20%. Then, you take the total operating costs related to the business (as you say, excluding interest and taxes). Operating costs are generally fixed relative to sales volume, but there is some variability especially in the areas of technical support and sales/logistics.
My math is pretty straightforward: $800 wholesale price * 20% margin (gross) = $160. You could guess that their margin might be higher, or that the wholesale price is higher to get up to $200 gross profit per device.
$880MM in annual operating costs (TTM was 980MM, but it looks like they have reduced general overhead and R&D somewhat) means you need to sell around 4-5.5MM devices to break even, assuming no other sources of revenue. That doesn't give you any EBIT, just breaking even.
If you want to give them a $1.5B market cap and a 30 P/E, they need to sell an additional 300k devices per year as a one-trick pony. Or, they can scale back operating costs to (say) $400MM/year. At that point, they can justify their valuation at about 3MM devices.
I just don't see it happening. I don't see them having the production or logistics wherewithal, or the rabid fan base, to get them out the door in their first quarter with 1MM devices. Apple didn't even have the ability to do it in their first quarter with the iPhone and a better distribution network and wireless partner.
As for my stock portfolio... I'm pretty happy where I am at. YTD I am up around 95% compared to AAPL at 60% and the NASDAQ at 11%. Over the last two years, I am still up over 15% despite making a couple significant mistakes early last year. I looked at buying Palm back at $8, but I didn't like them then and still don't now.
I did get one thing wrong; I accidentally included the cost of goods sold twice, but it doesn't change my assessment at all. They need to sell more devices than they can in their first year to be attractive.
where have you been for the last 2 years? That's not a theory. Apple did make an offer to Verizon and was rejected. Now Verizon is kicking itself in the ass and paying shill bloggers to suggest that there is a Verizon iPhone soon to stop the flow of switchers.
Regarding the section I set in bold, do you have anything real to base this on? It may well be, but I'd like to know if you're just assuming this and presenting it as a fact, or if there is a real story behind it.
The Pre may not be as refined as the iPod and does have the apps. The iPod has indeed stimulated the public's interest - and demand - in smart phones. However, the iPhone is restricted to ATT. Customers with Sprint may not want to switch to ATT due to cost, family and corporate (few) plans... VZ customers are even more sticky. In other words, the market that the Pre can address is significant. I have a smart phone with Sprint and they made me sign initially with their data plan but I cancelled it with no penalty... just said the reception was poor. I expect Sprint to be flexible with their data plans.
Equally important is the overseas market where the iPhone is restricted or sold as a premium product. At the very least they got a CDMA product... that is 20% of the market that Apple does not touch.
Most of the music people have is downloaded from their PCs to the smart phones... so access to iTunes is not essential for music. However, the drag will be no apps at this time. Aside from the iPhone the competition for the this phone is not impressive from Samsung, etc. The RIMM products are mostly for mail, etc... though there is consumer use.
With market cap of $1.5 B the stock makes of long shot side bet... I was not smart enough to have bought at $1.5/s, but made a small bet today. Any kind of success and this market cap could make multiples.
There is no reason for you to have a smart phone if you don't have a data plan. You may as well have a $10 low end phone.
There is no reason for you to have a smart phone if you don't have a data plan. You may as well have a $10 low end phone.
You are not thinking it through. There are plenty of people that can utilize the iPhone without having a data plan. First of all, many people aren’t so much into constant internet access but simply want to tie their iPod with their cell phone. Then there are people that have WiFi in areas they frequent the most, like their home and work, which gives them internet access without paying a fee.
There is no argument that cell phones, especially ones that require unlimited data plans, are expensive and this is a deterrent for many, but there is a reason for this requirement as it allows carriers to subsidize the price of the handset more than they could if only voice was required. Personally, I’d rather pay my $700 up front and have a lower monthly plan, but it seems that most people don’t agree with that or subsidization wouldn’t be so common.
You are not thinking it through. There are plenty of people that can utilize the iPhone without having a data plan. First of all, many people aren?t so much into constant internet access but simply want to tie their iPod with their cell phone. Then there are people that have WiFi in areas they frequent the most, like their home and work, which gives them internet access without paying a fee.
Then there are those that would like a big screen phone. The screens on the cheap phones are pretty small. Having access to an easy way to keep your contact list up to date with the computer is good too, one of my old phones required $120 in software and cables to do that, the other had Bluetooth but was cumbersome on Windows, it wouldn't sync with a mac at all.
Quote:
There is no argument that cell phones, especially ones that require unlimited data plans, are expensive and this is a deterrent for many, but there is a reason for this requirement as it allows carriers to subsidize the price of the handset more than they could if only voice was required. Personally, I?d rather pay my $700 up front and have a lower monthly up front and have a lower monthly play, but it seems that most people don?t agree with that or subsidization wouldn?t be so common.
Having an option to going without the data plan would reduce long term costs.
I also don't know if any carrier even lets you have a lower rate in exchange for buying the unsubsidized phone. That's not even an option that I'm aware of, you can't trade recurring costs for up front costs for the same service.
Or a limited or metered data plan, along with a smaller voice plan. I'd like a better phone, but unlimited data and 400 minutes a month are completely wasted on me.
Comments
Whether this is true or just a rumor, I think it is bad news for both Palm and Sprint that this got out. Whereas both companies were probably hoping for switchers from Verizon or ATT and a big burst of sales, now most customers of those other carriers will probably figure they'll just wait 6 months until their own companies to carry the phone. From what is being said about Palm's financial situation, they probably can't wait that long to sell large numbers of the phone.
No, it's not necessarily bad news. Sprint has nearly 50M subscribers. They'll probably find more than a sufficient number to switch from within their base (or by preventing defection). Also, one can't rule out that a company such as Sprint may provide some sort of implicit financing (e.g., through extra subsidies) for Palm, depending on how it pans out.
Whether this is true or just a rumor, I think it is bad news for both Palm and Sprint that this got out. Whereas both companies were probably hoping for switchers from Verizon or ATT and a big burst of sales, now most customers of those other carriers will probably figure they'll just wait 6 months until their own companies to carry the phone. From what is being said about Palm's financial situation, they probably can't wait that long to sell large numbers of the phone.
Unless Verizon and ATT are helping you through.
I know that there are going to be a lot of "if's" in my theory, but here it goes:
If Apple signed with Verizon in the first place
where have you been for the last 2 years? That's not a theory. Apple did make an offer to Verizon and was rejected. Now Verizon is kicking itself in the ass and paying shill bloggers to suggest that there is a Verizon iPhone soon to stop the flow of switchers.
I know that there are going to be a lot of "if's" in my theory, but here it goes:
If Apple wasn't too greedy in the first place, they could have wiped Palm out of existence right now.
If Apple signed with Verizon in the first place --- we would have seen both CDMA and GSM in the first gen iphone (GSM for the European/international market), we would have seen a subsidized price instead of the orginial $600 price tag, we would have seen a normal carrier relationship instead of trying the revenue sharing route (which in turn would have not scared away potential carrier partners), we would have seen 70 country launch for the first gen iphone (instead of 4 carriers).
samab has written this before and it's been hashed over before.
If Apple had signed with Verizon on Verizon's terms, the iPhone would've been a dud, and there would've been no real smartphone revolution. To counter samab's extreme case, here's the Verizon circa 2007 extreme - no wi-fi, no iTunes store access, no at-home activation via iTunes, no direct Apple iPhone updates, no iPod touch allowed, and a big Verizon logo on the iPhone.
Apple has really paid the price by not insisting that Steve Jobs, the greedy CEO, consult with samab, the know-it-all genius.
samab has written this before and it's been hashed over before.
If Apple had signed with Verizon on Verizon's terms, the iPhone would've been a dud, and there would've been no real smartphone revolution. To counter samab's extreme case, here's the Verizon circa 2007 extreme - no wi-fi, no iTunes store access, no at-home activation via iTunes, no direct Apple iPhone updates, no iPod touch allowed, and a big Verizon logo on the iPhone.
Apple has really paid the price by not insisting that Steve Jobs, the greedy CEO, consult with samab, the know-it-all genius.
Nobody really knows what Verizon demanded from Apple --- so we can't go with conspiracy theories about how Verizon would have crippled the iphone if they signed the deal with Apple. And I am restricting my theory to the first gen iphone only, so the iphone apps on the itunes store isn't on the agenda and there were no killer iphone updates on the first gen iphone.
What I am talking about is really the basic stuff that we already know:
1) Verizon disagreed on limited distribution (ie. Apple store and AT&T corporate store only) --- which angered AT&T's agent stores and other distribution partners (like RadioShack and BestBuy).
2) if there were wider distribution, we wouldn't have home activation problems in the first place.
3) Many items in the first gen iphone agreement was quickly reversed --- stuff like the original $600 price tag, revenue sharing, limited distribution (quickly open to Bestbuy and Walmart), handset warranty handling (many iphone carriers handle iphone warranty elsewhere).
4) Apple wanted too much from other carriers around the world because AT&T agreed on revenue sharing --- hurt the first gen iphone when negotiations took forever and limited to 3 European countries.
Even if the Verizon iphone would have been a complete dud --- Apple would have signed far more international carriers because Apple wouldn't have insisted on stuff that never would have worked in the first place (full priced $600 iphone with a 2 year contract with revenue sharing) --- Apple would have sold far more than the 7 million first gen iphones worldwide.
Palm was in really bad shape 2-3 years ago --- it wouldn't have taken much to push them over the edge. Hell, if Apple sold 3 million more first gen iphones and Palm sold 3 million less smartphones 2 years ago --- we might have already seen Palm's demise. Would Apple make less money with Verizon on the first gen iphone? Most likely --- but as the VISA commercial said it best: wiping out a competitor like Palm is priceless.
where have you been for the last 2 years? That's not a theory. Apple did make an offer to Verizon and was rejected. Now Verizon is kicking itself in the ass and paying shill bloggers to suggest that there is a Verizon iPhone soon to stop the flow of switchers.
Except reality doesn't match with your theory.
If you take cheap prepaid Tracfone out of the equation --- AT&T had NEVER beaten Verizon in net subscriber additons since the iphone was launched. Why would Verizon need to stop the flow of switchers when Verizon is beating AT&T in every single quarter in net subscriber adds?
Wait a second: I think I may have misinterpreted what you said here; when you say "making....." do you mean margins or revenues? If the former, my point is even stronger, no?
I think margin per phone is better than you stated, but gross margin excludes operational and marketing costs. They need to sell a lot of phones to break even when you consider fixed costs rather than incremental profit per device.
Even with Verizon and At&t getting it six months later, they seem to be missing key ingredients for a rebound. I think they will be constrained on addressable audience, production, and competition. When are Instinct customers eligible for a phone upgrade? Would they buy it?
From a stock perspective, I just think PALM is over-rated now.
Palm Pre first hands-on.
The Pre feels really good in your hand in terms of size and shape, but there?s a real plasticky aura about it. Additionally, things aren?t looking good for that QWERTY either. And hey, you know we take them keyboards seriously! When you try and type on the top row of keys, your finger hits the bottom part of the front piece and on top of that, you often hit multiple keys at the same time while typing. It?s actually really frustrating and doesn?t bode well for such a fantastic social communication/personal/business tool.
Why's that?
Your remark is legitimate. I should have said Blackberry, except the Storm, for their physical keyboard. I apologize for not being clear.
JR
I think margin per phone is better than you stated, but gross margin excludes operational and marketing costs. They need to sell a lot of phones to break even when you consider fixed costs rather than incremental profit per device.
Even with Verizon and At&t getting it six months later, they seem to be missing key ingredients for a rebound. I think they will be constrained on addressable audience, production, and competition. When are Instinct customers eligible for a phone upgrade? Would they buy it?
From a stock perspective, I just think PALM is over-rated now.
If you don't see the difference between gross margin (Revenues - CGS, which you are referring to) and operating - i.e., EBIT - margin (which is what I've been talking about from the outset), I am not sure it is a great idea to be making statements such as a stock being "...over-rated."
Right-there is no excuse for not having a CDMA version no matter how crippled. Or even a different phone alltogether. People and corporations simply will not switch their carriers no matter how great the device is. The cellphone market is extremely fickle with new products arriving monthly. This will be an extremely interesting year for smartphone competition.
Perhaps we can go back to computer desktops and laptops again as the main focus of our daily discussions.
I work for at&t and have seen numerous consumers, and business customers switching from other carriers to at&t specifically for the iphone. Now all the people i have talked to will say that they switched for the iphone and then they will complain about their previous service. I have respect for every mobile carrier however sprint-nextel is falling apart. The palm pre looks like a great device, but what is the point of having a great device if your cellular network is not very expansive? Wouldnt it be fair to say that having a small network would impact the functionality of the device?
Will apple partner up with verizon? probably later on down the road. Verizon needs to build up their international network however. I agree with techstud that the mobile world does get numerous phones in every month. However when dubbed the "Iphone killer" the company who made the device better come out strong because look what had happened to the other supposed "iphone killer" the blackberry storm, the blackberry storm was rated the worst gadget by engadget magazine.
However when dubbed the "Iphone killer" the company who made the device better come out strong because look what had happened to the other supposed "iphone killer" the blackberry storm, the blackberry storm was rated the worst gadget by engadget magazine.
Doesn't matter, isn't it?
The curve outsold the iphone and the storm took the 3rd spot after the 2nd place iphone.
Equally important is the overseas market where the iPhone is restricted or sold as a premium product. At the very least they got a CDMA product... that is 20% of the market that Apple does not touch.
Most of the music people have is downloaded from their PCs to the smart phones... so access to iTunes is not essential for music. However, the drag will be no apps at this time. Aside from the iPhone the competition for the this phone is not impressive from Samsung, etc. The RIMM products are mostly for mail, etc... though there is consumer use.
With market cap of $1.5 B the stock makes of long shot side bet... I was not smart enough to have bought at $1.5/s, but made a small bet today. Any kind of success and this market cap could make multiples.
If you don't see the difference between gross margin (Revenues - CGS, which you are referring to) and operating - i.e., EBIT - margin (which is what I've been talking about from the outset), I am not sure it is a great idea to be making statements such as a stock being "...over-rated."
I guess I am confused by why you would use operating margin as metric for an unprofitable company; traditionally you would take gross margin for a product, which can generally be divined based on similar products and company history. For Palm, that is ~20%. Then, you take the total operating costs related to the business (as you say, excluding interest and taxes). Operating costs are generally fixed relative to sales volume, but there is some variability especially in the areas of technical support and sales/logistics.
My math is pretty straightforward: $800 wholesale price * 20% margin (gross) = $160. You could guess that their margin might be higher, or that the wholesale price is higher to get up to $200 gross profit per device.
$880MM in annual operating costs (TTM was 980MM, but it looks like they have reduced general overhead and R&D somewhat) means you need to sell around 4-5.5MM devices to break even, assuming no other sources of revenue. That doesn't give you any EBIT, just breaking even.
If you want to give them a $1.5B market cap and a 30 P/E, they need to sell an additional 300k devices per year as a one-trick pony. Or, they can scale back operating costs to (say) $400MM/year. At that point, they can justify their valuation at about 3MM devices.
I just don't see it happening. I don't see them having the production or logistics wherewithal, or the rabid fan base, to get them out the door in their first quarter with 1MM devices. Apple didn't even have the ability to do it in their first quarter with the iPhone and a better distribution network and wireless partner.
As for my stock portfolio... I'm pretty happy where I am at. YTD I am up around 95% compared to AAPL at 60% and the NASDAQ at 11%. Over the last two years, I am still up over 15% despite making a couple significant mistakes early last year. I looked at buying Palm back at $8, but I didn't like them then and still don't now.
I did get one thing wrong; I accidentally included the cost of goods sold twice, but it doesn't change my assessment at all. They need to sell more devices than they can in their first year to be attractive.
where have you been for the last 2 years? That's not a theory. Apple did make an offer to Verizon and was rejected. Now Verizon is kicking itself in the ass and paying shill bloggers to suggest that there is a Verizon iPhone soon to stop the flow of switchers.
Regarding the section I set in bold, do you have anything real to base this on? It may well be, but I'd like to know if you're just assuming this and presenting it as a fact, or if there is a real story behind it.
The Pre may not be as refined as the iPod and does have the apps. The iPod has indeed stimulated the public's interest - and demand - in smart phones. However, the iPhone is restricted to ATT. Customers with Sprint may not want to switch to ATT due to cost, family and corporate (few) plans... VZ customers are even more sticky. In other words, the market that the Pre can address is significant. I have a smart phone with Sprint and they made me sign initially with their data plan but I cancelled it with no penalty... just said the reception was poor. I expect Sprint to be flexible with their data plans.
Equally important is the overseas market where the iPhone is restricted or sold as a premium product. At the very least they got a CDMA product... that is 20% of the market that Apple does not touch.
Most of the music people have is downloaded from their PCs to the smart phones... so access to iTunes is not essential for music. However, the drag will be no apps at this time. Aside from the iPhone the competition for the this phone is not impressive from Samsung, etc. The RIMM products are mostly for mail, etc... though there is consumer use.
With market cap of $1.5 B the stock makes of long shot side bet... I was not smart enough to have bought at $1.5/s, but made a small bet today. Any kind of success and this market cap could make multiples.
There is no reason for you to have a smart phone if you don't have a data plan. You may as well have a $10 low end phone.
www.jacobwhitaker.com
There is no reason for you to have a smart phone if you don't have a data plan. You may as well have a $10 low end phone.
You are not thinking it through. There are plenty of people that can utilize the iPhone without having a data plan. First of all, many people aren’t so much into constant internet access but simply want to tie their iPod with their cell phone. Then there are people that have WiFi in areas they frequent the most, like their home and work, which gives them internet access without paying a fee.
There is no argument that cell phones, especially ones that require unlimited data plans, are expensive and this is a deterrent for many, but there is a reason for this requirement as it allows carriers to subsidize the price of the handset more than they could if only voice was required. Personally, I’d rather pay my $700 up front and have a lower monthly plan, but it seems that most people don’t agree with that or subsidization wouldn’t be so common.
You are not thinking it through. There are plenty of people that can utilize the iPhone without having a data plan. First of all, many people aren?t so much into constant internet access but simply want to tie their iPod with their cell phone. Then there are people that have WiFi in areas they frequent the most, like their home and work, which gives them internet access without paying a fee.
Then there are those that would like a big screen phone. The screens on the cheap phones are pretty small. Having access to an easy way to keep your contact list up to date with the computer is good too, one of my old phones required $120 in software and cables to do that, the other had Bluetooth but was cumbersome on Windows, it wouldn't sync with a mac at all.
There is no argument that cell phones, especially ones that require unlimited data plans, are expensive and this is a deterrent for many, but there is a reason for this requirement as it allows carriers to subsidize the price of the handset more than they could if only voice was required. Personally, I?d rather pay my $700 up front and have a lower monthly up front and have a lower monthly play, but it seems that most people don?t agree with that or subsidization wouldn?t be so common.
Having an option to going without the data plan would reduce long term costs.
I also don't know if any carrier even lets you have a lower rate in exchange for buying the unsubsidized phone. That's not even an option that I'm aware of, you can't trade recurring costs for up front costs for the same service.