“‘Millions of iPhones Go AWOL.’ Talk about a hysterical headline. But that’s how BusinessWeek distilled the discrepancy that came to light this week when AT&T said that it activated roughly 2 million iPhones last year. Apple, by contrast, claims that it sold 3.7 million iPhones in 2007,” Tim Beyers writes for The Motley Fool.
“That’s 1.7 million iPhones unaccounted for and which, apparently, aren’t earning Apple the $10 to $18 a month in telecom royalties investors like me were salivating over not so long ago,” Beyers writes.
“Others, such as Sanford Bernstein analyst Toni Sacconaghi, say that the discrepancy suggests that more than 600,000 iPhones are stuck in some warehouse gathering dust. The rub? Rabid iPhone demand is pure fantasy,” Beyers writes.
MacDailyNews Take: Actually, Sacconaghi has already recanted. See: So-called ‘analyst’ finds his ‘missing’ iPhones.
Beyers writes, “What if Sacconaghi is right? What if demand is tepid? What if, instead of Apple selling 10 million iPhones in 2008 — or, as some have suggested, 7 million — Apple only sells 5 million handsets? And what if only half of those sold were via AT&T or authorized European carriers such as Telefonica’s O2 or France Telecom’s Orange?”
“Then, dear Fool, Apple would be on pace to produce more than $30.5 billion in 2008 revenue by my math, or at least 27% growth on the top line,” Beyers writes.
“What to do? How about charging pre-rebate prices for unlocked iPhones? You read that right. Want your iPhone unhinged? Ka-ching! That’ll be $599, please,” Beyers writes. “No doubt AT&T, which has a five-year exclusive distribution deal with Apple, would pitch a fit over a move like this. But in business, money talks and kickbacks to Ma Bell for each unlocked phone sold could equal hundreds of millions in revenue. Do you really believe she’d turn it down?”
Full article here.
sold in early December, bought back in @ 131.25.
Buy in the late winder or early spring, hold until the week before christmas, repeat until rich.
correction – winder winter
That’s 1.7 million iPhones unaccounted for and which, apparently, aren’t earning Apple the $10 to $18 a month in telecom royalties investors like me were salivating over not so long ago,
Goes to show people don’t like LOCKED PHONES!!!
Oops. Actually, that’s what you should do. Logic error. GOTO 20. Run.
I love how these fools panic at the drop of a hat
@ Old Mac Man:
If you don’t want a locked phone, don’t buy a locked phone. It’s as simple as that.
Too paraphrase Obiwan:
Who’s the bigger fool? The fool who writes the “analysis”? Or the fool who believes it and sells?
I have friens here in Oz who have them, and have them up and running. You’d think Apple would have not allowed them to be exported overseas until ready.
The problem is that Apple won’t be getting revenue from iPhones that are being unlocked. The iPhone itself is sold at a loss; they make their money from the wireless carriers. If half of their phones are being unlocked, it eats up the profit that Apple receives from the phones that are being used legitimately and makes the whole iPhone thing a big waste of time and energy from an earnings standpoint. That’s why Wall Street has soured on Apple. If Apple sold iPhones unlocked they would cost around $1100.00 if they included all the revenue that Apple gets from the carriers.
@Thomas:
What a load of crap! Apple gets roughly $120 to $240 per phone from revenue sharing on a 2 year contract. If iPhones cost Apple $1100 they would have been losing roughly $250 per phone at the $599 retail price even counting the shared revenue. You don’t have a clue, so stop spouting FUD.
Let’s see, Apple sells most iPods for around $250 retail. Wholesale cost is maybe $150. Add a basic phone chip ($40) and the touch interface ($50?) and you come up with a wholesale cost of about $250, not $860.