June 16, 2008 – 4:00 pm
Ultimamente son tantas las veces que preguntan sobre el impacto y el futuro de los móviles tras el bombo del iphone 3G que he literalmente “fusilado” esta entrevista publicada en www.gigaom.com ( Om Malik ) la cual me ha parecido muy transparente, certera y clarificadora. La dejaré en el blog porque sino seguro que pierdo el email donde la encontré.
A lot has been written about the new 3G iPhone, its price and its impact. Now it’s time to shift attention to the most important question about this device: How much money will it make for Apple and its carrier partners?
While I don’t have any concrete financial projections, after reading some of Wall Street’s better analysis and taking clues from my own sources, I can offer some observations, which I’ve packaged in a Q&A format here:
Q: Why did Apple agree to a price subsidy?
A: Mass adoption. AT&T Mobility CEO Ralph de le Vega told the WSJ that it was all about getting the device to the mass market. “I think this is going to reach people that would otherwise never put $199 into a mobile device,” he said.
Q: Is subsidizing the handset going to cost AT&T and other carriers, like UK-based O2 (which is offering a free version with premium packages)?
A: Yes. In the WSJ interview, de la Vega says, “It’s going to impact earnings in 2008 and 2009 in a negative way, but will turn very profitable in the long term.”
Q: How much of a hit will the subsidy be to AT&T’s revenues/earnings?
A: The company says between 10 and 12 cents per share. According to Stifel Nicholas analyst Christopher King, this assumes that AT&T gets around 5.5 million incremental gross subscriber additions and a $200 subsidy per phone in both 2008 and in 2009.
Q: AT&T says the subsidy agreement with Apple will become accretive starting in 2010. Likely?
A: “For AT&T to meet its 2010 accretion goal, we believe the company will have to significantly accelerate its market share over the course of the next 12-24 months, among the most lucrative, post-pay subscriber base,” Stifel’s King writes in a notes to clients. “With the current levels of wireless penetration, we believe this implies AT&T must take subscribers from other carriers.”
I don’t see it happening either, especially since other handset makers will undoubtedly have some tricks up their sleeves with which to respond to the iPhone. The window of opportunity to sell a lot of phones for Apple is not unlimited.
Q: How many 3G iPhones does Apple hope to sell?
A: UBS Research estimates that the company is looking to push out between 10 million and 15 million 3G iPhones, based on their checks with vendors and parts suppliers. But even despite the subsidies, UBS analysts expect the final number could be closer to the lower end of that range. By way of comparison, Motorola sold about 11.3 million Razrs the first year — with subsidies, global distribution and multiple carriers in the very same regions. And that was one of the best-selling phones ever.
Q: How much money can Apple make selling 15 million units?
A: Assuming Apple gets $399 per device from the carriers (using Stifel’s math of a $200 subsidy) and most of the devices sold are the low-end model, Apple could make $5.98 billion. Of course, the numbers could be much higher if the high-end model becomes popular. So a reasonable guess would be between $6 billion and $7 billion. This will be a profitable enterprise for Apple, according to analysis of the iPhones parts by research firm Portelligent. The materials currently costs about $170, but that will soon go down to $100 as volumes scale.
Q: Will it impact Nokia and RIM?
A: I wouldn’t bet on it, despite the fact that in Nokia’s home market of Western Europe, Apple has not only addressed the lack of 3G connectivity but signed some huge distribution deals. At 15 million units, the iPhone will be marginal compared to Nokia’s offerings. Nor do I think that RIM will keel over, though I do think this puts the kibosh on RIM’s consumer play somewhat.
Q: Who loses?
A: My bet is on Motorola and Palm. Motorola is just a rudderless Titanic right now, and is especially vulnerable because it doesn’t have anything that it can use to compete with the likes of an iPhone. Similarly, Palm just doesn’t enjoy the cachet it used to, and the lower-priced iPhone makes the $99 Centro look a tad dowdy. Given how much AT&T has riding on the 3G iPhone, I am betting they will purposely promote this to the detriment of others.
Q: What about the iPhone ecosystem — who’s making what inside the 3G iPhone?
A: Infineon is making the baseband and RF transceiver, while Samsung is providing the application provider. Forward Concepts analyst Will Strauss says the GPS chip is based on Broadcom’s Global Locate technology (and not a Broadcom chip, as we had initially reported) that has been licensed by Infineon. Time to re-check that information again.
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