“What happen to Apple iPhone sales if AT&T subsidizes the cost of the phone for subscribers? The answer, says Bernstein Research analyst Toni Sacconaghi, is that they would sell a lot more phones, to the benefit of both companies,” Eric Savitz blogs for Barron’s.
MacDailyNews Take: Eric and Toni obviously have each other #1 in their Fave Fives. Get iPhones, guys.
Savitz reports, “As Sacconaghi notes, there has been recent speculation that AT&T will provide a $200 subsidy for the pending-but-unannounced 3G iPhone, bringing the phone’s cost for consumers down to about $200. (Current models are priced at $399 and $499.) In a research note this morning, Sacconaghi took a look at what would happen if AT&T does choose to subsidize the next generation iPhone – and why it makes sense for both sides.”
Savitz reports that Sacconaghi “thinks that it is realistic to think AT&T’s iPhone sales could easily double with a $200 subsidy.”
“Sacconaghi says a jump in iPhone sales would likely cannibalize sales of the iPod Touch [sic], which is sold at price points of $299, $399 and $499. But he adds that the overall impact would be positive, since the iPhone is more profitable for Apple than the Touch given the fees the carrier pays back to Apple,” Savitz reports.
More in the full article here.
“Research note?” Give us a break. Wherever the wind blows, Toni goes. And Eric just can’t wait to blog it. This “AT&T subsidizing iPhones” is currently just a rumor. That, and a bunch of idle speculation, will get you an analyst job and an article on the Barron’s blog site, but it certainly won’t give you any meaningful investment advice.
lol its funny how all the mouth pieces think everything is gonna cannibalize iPod sales…. I guess if they say it long enough… and enough time.. eventually someday they may end up being right…. I dont see that happening for a long time though.
I am sure Apple has just been testing the waters so far with iPhone 1.0.
We can expect a lot of changes with iPhone 2.0, in term of design, fuctionality and overall strategy.
Therefore, anything can happen with the deal they have with AT&T;, Orange, T-Mobile, etc… from my prospective.
Hopefully Apple won’t make the same mistake as they’ve done with the Mac.
Wow more guessing/speculation on something that may or may not happen.
If AT&T;does this, iPhones will sell faster than Pez.
And I loves my Pez!
I don’t know how I feel about this subsidy rumor… On one hand, it’s great because it gets the phone into more people’s pockets; on the other hand, does it inherently devalue the iPhone by making it a commodity product?
I laugh when I read crap like this. When customers forego one of your products in order to buy another with a larger contribution margin, it’s NOT called cannibalization!
I suppose they just need an editor with some business savvy, so we should go easy on them.
@Jay-Z,
No. Selling a lot of iPhones doesn’t make it a “commodity product.” Commodities are products that multiple companies produce with virtually indistinguishable characteristics. Gold is a commodity because one miner’s gold is as good as another’s. The iPhone is pretty much the opposite of a commodity, regardless of the price.
“pending-but-unannounced 3G iPhone”
Unannounced. May not happen. Perhaps something other than 3G. I hope the next one is NOT a 3G iPhone, so the dumbasses that keep announcing an unannounced product will look like the idiots that they are.
would double our family buying plan
my wife and I both have iPhones, and if they dropped to $199.00, my 2 oldest would be getting now, instead of next Christmas!
The most we might see is a $100 subsidy, but we will NOT see it happen only at the AT&T;stores. It will happen across the board IF it happens at all.
Again, Apple will not hinder traffic to their Apple Stores in any way, shape, or form.
Is this Toni the same as the one who bashing on AAPL before?
I’d buy one from at&t;.
That way, my $200 sprint contract penalty would be a wash…
I doubt AT&T;will do this.
No shit! If you give it away for free, they will sell even more. And if the rumor doesn’t pan out, Toni will be the first to say whatever it takes to knock Apple down and Eric will be the first to blog about it.
It will be nice if true, but I’ve got an iPhone fund ready for the top-of-the-line 3g device. 😀
I don’t like this rumored unilateral move by AT&T;. They are about the worst partner that Apple has. They made the stock tank earlier with a misleading iPhone sales announcement. And they do less than nothing to promote the phone itself. When you walk/drive by an ATT store, you can’t even tell they even sell iPhones, although every other phone they carry is full “posterized” inside and out. I hope that Apple gets out of this contract with ATT and never looks back.
So, what all this BS about subsidizing the iPhone means is:
A bunch of morons that think the iPhone should be treated like a Razr are going to focus on subsidizing it, even though nobody has a good reason to believe this will happen… and when it doesn’t happen the stock is going to drop.
Apple should and will treat the iPhone like a computer (which it is), and not like a cell phone.
This is like saying Skype should subsidize MacBooks.
Won’t hurt iPod Touch sales in Vermont as there is no AT&T;.
The sky is blue
It doesn’t make sense to expect subsidy from AT&T;in addition to monthly sharing with Apple. It will be one or the other, not both. Apple wants the sharing, so I expect that to remain. It eliminates the devaluation of the hardware and it give Apple income to cover updates under Sarbanes-Oxley.
Besides, all of this talk is pure speculation. We don’t know what agreement Apple and AT&T;have for next iPhone, but this issue is covered, that is for sure.
Wow! Did you hear that Skype is going to give a $800 subsidy for MacBooks? That will cause Macintosh sales to skyrocket! Now if we could just get NBC to subsidize iPods, Apple might have a future!