“Apple Inc. CEO Tim Cook’s decision to call out AT&T and other U.S. carriers for making iPhone users wait longer for discounted device upgrades, as he did on the company’s quarterly earnings call this week, was a brave one,” John Shinal writes for MarketWatch. “Whether his public comments help Apple in negotiations over future wireless subsidies remains to be seen, however.”
“Those negotiations will help determine how large a slice of U.S smartphone and tablet sales goes to Apple and how much goes to its rivals and carrier partners,” Shinal writes. “‘Some carriers changed their upgrade policy,’ Cook said on the call, after revealing that the company’s iPhone sales contracted in the U.S. during the quarter ended in December. The carriers ‘stretched the time out to 24 months,’ before allowing users to get newer iPhones either for free or at nominal cost, whereas many users previously received subsidized devices just 20 months into their service contract.”
“The hardball tactic by the wireless giants may help explain why Apple’s revenue forecast for the current quarter was much weaker than Wall Street expected,” Shinal writes. “Android phone makers can now offer a mobile browsing experience that’s good enough for most smartphone users, a market reality that’s weakened Cook’s hand in the negotiations, judging by his comments.”
“Apple, of course, has its own cards to play in subsidy negotiations covering the U.S. mobile market, where Apple smartphones and tablets are the leading driver of mobile commerce, according to Cook,” Shinal writes. “The CEO quoted comScore research figures indicating that iPhone users conduct 54% of U.S. smartphone browsing and 78% of tablet browsing.”
Read more in the full article here.
What is this guy talking about??
Iphone sales did not “contract” – 51 million was a record amount of iphones sold
Revenue did not miss expectations, it was 57.6 Billion versus 57.46 billion in consensus expectations.
The number of iphone sales missed most expectations – 51 million vs 56 million expected. This does not equal contraction of iphone sales or missed revenue expectations!
This writer is a financial journalist…he should be embarrassed.
Regardless what Apple has done so well last quarter, nothing will please Wall Street like a mean mother-in-law who hates a beautiful daughter-in-law. :(‘
The only solution for a daughter-in-law being happy is divorced her husband to get rid the mean mother-in-law.
@bclous: Apple’s *US* iphone sales were down 1% in the quarter. The record 51 million units you’re quoting was the worldwide number. The author – who was quoting Cook – was spot on and has no reason to be embarrassed: “‘Some carriers changed their upgrade policy,’ Cook said on the call, after revealing that the company’s iPhone sales contracted in the U.S. during the quarter ended in December.”
And Cook may be right as to one of the reasons why sales were down in the US but not the rest of the world – the carriers are holding Apple to ransom.
you’re right. I read it too quickly.
Its Marketwatch. Many over there just hate Apple. Don’t know why but the articles always lean away from Apple. And the commentors have real Apple haters in their rank (paid by samsung??)
Just saying.
Idiot wall st analists appeal only to idiot know nothing followers.
All this was known prior to the quarterly report and yet the talking heads kept pushing their high guesses that would later be used to tank the stock. Apple hit Apple’s targets!
If the tea leaves were any harder to read … Are they idiots or did they got the job done to helped tank the stock.
Dear Tim,
Announce Apple’s intentions to build a state-of-the-art wireless network with all of those billions just sitting in the bank, especially if all you’re going to do with the money is slowly drip it back to shareholders who have already benefited via stock price gains from their investment.
Actually, you won’t even have to build the network. Just start bidding on radio spectrums whenever possible and start discussions of a takeover of any one of the bigger four current networks.
That’s all of the leverage you’ll need.
Sincerely,
Dude in Nebraska who is really tired of watching an innovative company get screwed over by the very people it has made rich.
“. . . especially if all you’re going to do with the money is slowly drip it back to shareholders who have already benefited via stock price gains from their investment.”
Specifically, WHICH investors are you referring to here, mid? The ones who bought in the 700s? The 600s? The 500s? A whole BUNCH of people who believed in Apple in the last year and a half, enough to put their money where their mouths are, have not–NOT–benefitted from a stock price increase. The only hope they right now is a decent return on their investment in the form of an increased dividend.
And IMHO your pie in the sky wireless, nuclear powered, Austin Powers sci-fi future for Apple Inc. AIN’T GONNA HAPPEN anytime soon. How much longer should stockholders allow the company to sit on its $160,000,000,000 nest egg before they realize that nothing truly revolutionary is coming out of the Cupertino spaceship?
Shut your hole already.
Truax, the people you mention who bought at $700 are not the ones manipulating the stock. If you are among those, I would be far less upset at Apple and much more so at analysts who keep moving the goal posts on an extremely successful company.
And as far as giving away the money to shareholders — think about how little money that really is relative to the investment. No, what Apple needs to do is invest the money in the future instead of nickle and diming it away just so that the stock can fall further on manipulation.
Use the money in the bank to leverage the future . . . that’s smarter.
Cheaper just to buy T-Mobile and build it out. Quicker to set up an MVNO.
Apple has the cash, just do not know if they have the stomach for the job.
If they are going to have a mobile network they need to do the purchase(s) in the deepest secrecy possible. Subject to the laws, of course. Like Disney bought the land for disney world through dozens (hundreds??) of small entities. Then put it together in one stroke. But they need to keep Vz and ATT happy til they have their own network.
Better to buy Sprint and get Clearwire’s wireless technology and spectrum licenses in the process. Sprint would only cost something like $50B…pocket change.
Tim, from what I’ve witnessed for quite a few years is Verison is definitely not Apple’s friend.
As head of the Axis of net noneutrality, Verizon is NO ones friend and a fiend to everyone.