Unlocked Apple iPhones a leading indicator of great global demand

“I’ve been reporting about all the hand-wringing on Wall Street regarding the news that a million or so folks are using unlocked iPhones. The more I think about it, the more I think the hand-wringers have it all wrong,” Peter Burrows reports for BusinessWeek.

Burrows reports, “Here’s why: Their concern is that Apple is losing out on the rivers of pure profit that come from the cut of monthly cellular charges Apple has wrung out of its carrier partners, particularly AT&T. Depending which analyst you talk to, that’s $168 million to $400 million per million iPhones that Apple is missing out on.”

“So how can that be good? Because the vast majority of those one million consumers are in places where Apple hasn’t even set up shop—places with a lot more prospective iPhone customers (China, India, Brazil, Russia, Canada) than there are in the countries where the iPhone is officially on sale (the US, the UK, France and Germany). In other words, there are hundreds of thousands of people—I’d guess 750,000—that are so desperate to buy the product that they’re willing to pay jacked up prices to get a hacked iPhone that comes with no warrantee, so support from Apple and not all of its key features turned on. And these stalwart fans will act as shock troops for Apple’s coming global expansion—providing countless dollars of free marketing as they show off their iPhones to their more mainstream friends,” Burrows reports.

Burrows reports, “Says RBC Capital analyst Mike Abramsky, ‘Despite all the pessimism, it’s hard not to look at this as a leading indicator of great global demand.’ Explain again to me how this is a bad thing?”

Full article here.

[Thanks to MacDailyNews Reader “qka” for the heads up.]

Recipe for success: Cash out at the end of the year with big gains and then get back in at obscenely low prices after scaring away the ignorant. Lather, rinse, repeat. All of the big mutual fund managers must be back in now. So, it’s time to resume telling the truth and let Apple stock roll again.

16 Comments

  1. need iphone in CANADA c’mon apple. hurry hurry.I want to be ligit. imagine if they sold an unlocked version to the world for double the price. that would make up for their loss in subscription profit.

    your neighbor, canada

  2. Obviously some of this concern comes from the old mindset of cell phones being indelibly linked to providers, but let’s face it, cell phones now, smart or dumb, are being hacked – mostly so that end users can take better advantage of the built-in blue-tooth features that providers like Verizon like to empirically control – The point being that the fact that consumers are hacking these phones does not change the the fact that these phones are being sold in vast quantities. I have to believe that with technically non-subsidized phone sales (at least not directly), that Apple’s overhead per phone is adequate to providing an acceptable profit margin on a per phone basis.

  3. Anyway, if it is really a concern to Apple then it is/will spur them on to making sure that, when their agreement with ATT is finally over that they do what they can to make their product available to a more diverse set of cellular providers. Obviously providers hold all of our balls firmly in their respective grips, consumers and manufacturers, and that includes Apple, but if anyone can open the door to providing their particular product across more providers it would certainly be Apple and uncle Steve.

  4. Two things:

    1. These people bought iPhones and NOT some Samsung, Nokia, HT-rip-off.
    2. Apple has about $400 Million revenue regardless!
    3. iPhone factories get to keep production ramped up at full blast eventually lowering costs.
    4. “these stalwart fans will act as shock troops for Apple’s coming global expansion—providing countless dollars of free marketing”

  5. Huge demand in Hong Kong with internet community group supporting iPhone users. I’m seeing people using iPhones about once every 3 days. This is significant. There’s musts be 10s of thousands of unlocked iPhones in Hong Kong. People are waiting for the official launch.

  6. At last an article that does not make me feel like a crook, because I use an iPhone in Mexico!!

    4. “these stalwart fans will act as shock troops for Apple’s coming global expansion—providing countless dollars of free marketing”

    thanks for the compliment

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