Apple ‘iPhone’ could disrupt mobile service distribution channel

“New hardware isn’t the only way Apple can shake things up in the mobile industry. The company has the ability to disrupt the entire distribution channel, which is currently controlled by cellular service providers,” Daniel Eran writes for RoughlyDrafted.

“The control maintained by service providers has slowed the advance of hardware features and the emergence of new competition for service,” Eran writes.

“Apple’s position as a hardware maker with retail stores and software expertise allows it opportunities unrivaled by other phone makers like Motorola, software middleware providers such as Microsoft, and services providers that simply resell subsidized phones in an effort to sell minutes,” Eran writes. “In 2007, Apple has the capacity to flip the entire mobile world on its head, with the same quiet speed it has used to reinvent itself as a specialized Intel PC maker. It will be fun to watch.”

Eran explains how, once again, Apple could be poised to disrupt the status quo in his full article here.

24 Comments

  1. The greatest benefit Apple could provide to the mobile phone world would be an iTunes model of being able to select the services you want from a menu that allowed you to avoid stuff you didn’t want that you had to pay for anyway.

    THAT, my friends, would be a real revolution that would turn the corruption of price fixing and advertising fraud from this industry on its head!

  2. I, and I think many AAPL investors want Apple to produce something revolutionary and Earth-shattering, that will fuel explosive growth into new sectors, as the iPod did many years ago. That revolution is peaking, and investors’ sentiment about this is vividly displayed in their massive sell-off of AAPL over the last month. The sell-off continues as AAPL is heading towards 80 today. Anything less than revolutionary promise of upcoming product releases will drive AAPL down to 70 in an equally short period of time, and very likely lower. If the rumoured phone is anything shy of astounding, watch out. If ‘iTV’ doesn’t offer an experience beyond what everyone is expecting AND come with a vastly expanded movie and TV show offering in iTunes, gravity will kick in big time for AAPL.

    These are the facts as I see them, without prejudice or bias.

  3. Cold Hard Reality:

    “I, and I think many AAPL investors want Apple to produce something revolutionary and Earth-shattering, that will fuel explosive growth into new sectors, as the iPod did many years ago. That revolution is peaking, and investors’ sentiment about this is vividly displayed in their massive sell-off of AAPL over the last month. The sell-off continues as AAPL is heading towards 80 today. Anything less than revolutionary promise of upcoming product releases will drive AAPL down to 70 in an equally short period of time, and very likely lower. If the rumoured phone is anything shy of astounding, watch out. If ‘iTV’ doesn’t offer an experience beyond what everyone is expecting AND come with a vastly expanded movie and TV show offering in iTunes, gravity will kick in big time for AAPL.”

    I’ve followed AAPL daily for years now, and I’ve gotten profits of over 1000%. What’s driving the price of AAPL down lately is hedge fund manipulation. Illegal and unethical? Sure! Is it a reality? See Jim Cramer’s recent interview on hedge fund strategy:

    http://publish.vx.roo.com/thestreet/portal/?clipId=1373_10329438&channel=Cramer+On+Demand&puc=mktw&bt=NS&bp=MAC&bst=SF&biec=false&format=flash&bitrate=300

    AAPL fundamentals haven’t changed.

  4. Cold, Hard Reality

    I dont’t think you have a correct reading of the current AAPL status. I think investors are selling to bring the price down so that they can soon buy back in anticipation of another giant leap forward. I don’t know of any other stock that can make such giant strides ( with the exception of Google, perhaps).

  5. “If ‘iTV’ doesn’t offer an experience beyond what everyone is expecting AND come with a vastly expanded movie and TV show offering in iTunes, gravity will kick in big time for AAPL.”

    Define ‘everybody’. If by everybody you mean all the Apple fanboys that can never have their expectations fulfilled, then you are wrong.

    If by everybody you mean the masses who don’t really follow breaking news everytime Steve Jobs farts then you are right. However, this second group doesn’t hold the same expectations that the first group does, so most likely things will be fine.

  6. Daniel Eran track record is not a good one. He is not a reliable or unbiased source. He is a blogger, prone to making bald assertions and raw speculation, without any real facts or analysis to back it up.

    Of course on any given point, Eran may or may not be right – even a broken watch tells the right time twice a day – but I certainly would not take his words for anything without (1) fact-checking them and (2) sanity-checking his point of view with more neutral and unbiased writers.

    In short, Eran is gleefully pouring the kool-aid into your cup (while his website racks up the eyeball count) and it’s up to you to decide whether you’ll drink it or look for a real analysis elsewhere.

  7. AAPL has three overhangs that are keeping the stock from rising:

    1. Stock option review, and accompanying potential restatement of earnings going back to 1997, has STILL not yet been concluded, after nearly four months of investigation. The next deadline for Apple to file these with the SEC is by or on December 29, 2006. If Apple misses that deadline, it can petition for another extension, leading into mid-January. The sooner this is cleared up, the better for AAPL.

    2. End-of-year window dressing. The fact that the AAPL decline over the past 4 weeks is an orderly decline and on average volume indicates that the selling is mostly profit-taking and end-of-year window dressing by hedge funds, mutual funds, and pension funds. (Window dressing is selling to lock in profits from winners, and selling losers to offset capital gains, to improve the portfolio’s competitive position on paper.)

    3. Uncertainty over 2007 products and growth. Rumors are rampant, expectations are high, and apart from iTV, Apple has not disclosed any of its plans. In the face of uncertainty, the instinct on Wall Street is to sell.)

    Given the above points, the stock will probably continue its decline the rest of this week.

    However, hext week, the stock will probably recover and start an uptrend, driven by two factors in the short term (1-2 weeks):

    1. With the new 2007 calendar and tax year starting, the 2006 slate is wiped clean, and new money will come into the market. Some of this money will go to winners of 2006, of which AAPL is one.
    2. The lead up to MacWorld Expo, and especially the keynote on January 9th, 2007.

    That brings us to mid-January 2007, at which point three factors will become significant:

    1. Quarterly earnings, probably to be reported on January 17th, 2007 (unconfirmed by Apple). The Reuters consensus earnings estimate for Q1 2007 is $0.77.
    2. Stock option review will likely be complete by mid-January 2007. (May be earlier – see above.) Any delays after that, and investors and analysts will probably start to make more noise about the length of the investigation.
    3. Analyst upgrades based on adding projected revenue from iTV, iPhone, and any other new products announced at MacWorld.

    The upshot:

    If you have money to invest, this week is a good time to buy a little of AAPL. Don’t bet the farm on it, though.
    Be prepared to sell the stock come mid-January, in case MacWorld Expo or quarterly earnings is a bust.
    Re-evaluate the fundamentals and future projected revenue and earnings after mid-January.

    Good luck!

    Disclosure: The above is an analysis based on fundamentals of the company’s business, revenue, and profit. It is not a technical analysis based on chart patterns, support/resistance levels, trendlines, etc.

  8. It’s pitiful the way some look at Apple’s success and only see dollar signs. Too bad for them. For the rest of us, it’s terrific when the 800 lb. gorilla is one of the good guys and he’s making wonderful toys!

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