“Jefferies & Co.’s Peter Misek, who has a Buy rating on Apple shares and an $800 price target, this morning not only updated his thinking on the iPhone, but also opined that subsidies could be important for sales of an Apple television set, which has been rumored for some time now,” Tiernan Ray reports for Barron’s.
“Misek estimates a price of $1,250 for an Apple television, which he’s been referring to as ‘iPanel,'” Ray reports. “That’s probably just fine for the mass market, he thinks, but subsidies ‘would certainly improve the value proposition’ for consumers.”
In our view, the iTV presents a new and unique opportunity for the telcos to gain market share in a mature television market, and we believe carriers could, at the very least, be entertaining the idea. For a new FiOS subscriber, we estimate a payback period of 9 months based on an upfront investment of $700 to connect the home to the fiber network and lower initial monthly recurring revenue during the promotion period. Hypothetically, if Verizon offered a $500 subsidy to new FiOS subscribers (but no triple play discounts) along with a $20/month Wireless video fee, the payback period would increase to 13 months. In our view, this modest increase in payback period would still be value accretive with higher customer stickiness and market share gains vis-à-vis competitors that may not offer iTV- like functionality. – Jefferies & Co. analyst Peter Misek, June 6, 2012
Read more in the full article here.
[Thanks to MacDailyNews Reader “David E.” for the heads up.]