Showing posts with label iPhone. Show all posts
Showing posts with label iPhone. Show all posts

Saturday 22 September 2012

Wireless carriers hope to temper iPhone 5 margin pain

 By Sinead Carew and Jeremy Wagstaff
NEW YORK/SINGAPORE (Reuters) - For mobile service providers like AT&T Inc, it's not enough that consumers came out in droves to buy the newest iPhone from Apple Inc.
They need people to dig more deeply into their wallets each month to pay for data services, such as mobile video, to cushion the impact of the iPhone's steep price tag on the carriers' bottom lines.
Wireless service operators typically subsidize the cost of smartphones, offering discounts to consumers to lock them into two-year service contracts. But the iPhone subsidy is as much as 60 percent higher than subsidies for Android smartphones, according to Barclays analyst James Ratcliffe.
He estimates the iPhone subsidy at about $400, compared with $250 to $300 for other smartphones. That means iPhone customers only start to become profitable for carriers about nine months after they buy the device, compared with a five- to six-month timeframe for other smartphones.
As a result, mobile operators' profit margins usually suffer in the months after an iPhone launch, when sales volumes are highest.
"We always say an Apple a day keeps the profits away," Neil Montefiore, chief executive of Starhub, said during the Singapore wireless service provider's August earnings conference call.
Be that as it may, mobile operators around the world still want to sell the iPhone because it helps retain subscribers and attract new ones. Apple is the only phone maker whose product launches are a cultural phenomenon -- on Friday, fans from all over the world queued around city blocks to get their hands on the new iPhone 5.
In Australia, service providers are trying to minimize the financial hit by varying the iPhone's price so that customers who pay more for data services get a bigger subsidy.
In the United States, carriers have changed their policies to make customers wait longer for a subsidized upgrade and levied new fees, after Verizon Wireless, AT&T and Sprint Nextel Corp suffered dramatic declines in profit margins based on earnings before interest, tax, depreciation and amortization (EBITDA) as a percentage of service revenue in the fourth quarter of 2012, when the iPhone 4S was launched.
Analysts expect the changes to help the operators, but they still forecast a drop in EBITDA margins. AT&T's margin is expected to fall from 45 percent in the second quarter to 40.8 percent in the third quarter and 35.7 percent in the fourth quarter, according to four analysts contacted by Reuters.
Verizon's margin is expected to fall from 49 percent in the second quarter to 47.4 percent in the third quarter and 43.6 percent in the fourth quarter, according to the same analysts.
FASTER PHONE
Service providers have high hopes that consumers will spend more on mobile data with the iPhone 5, saying services like video should work better on the new phone, which can support data speeds about 10 times faster than the previous model.
"That's the hope," said Guggenheim analyst Shing Yin. But he said "it's unproven" and there is no reason to assume iPhone 5 customers will use any more data than people using cheaper rival devices that support the same high-speed technology.
Singapore's biggest mobile operator, SingTel, said that its iPhone 5 orders were already exceeding previous iPhones because of the new gadget's higher speeds.
"From a financial standpoint, people who use this device tend to use more of it," said SingTel digital executive Allen Lew.
China Telecom is also banking on iPhone users spending more money on their telecom services. China's third-largest mobile service provider had to raise its subsidies by 50 percent when it started selling an older iPhone in February. As a result, its EBITDA profit margin fell 4 percentage points in the first half of the year to 38.5 percent compared to the same period the year before.
While Apple has not yet announced its China launch plans for the iPhone 5, China Telecom expects continued pressure on its bottom line from the iPhone but hopes the devices will help boost revenue per user in the long run, a executive for the operator said.
"Our subsidies level will remain pretty high at least for this year," said the executive, who did not have permission to speak to the media and declined to be identified. "We know we'll have to invest more initially."
Many operators feel they have no choice but to offer the iPhone because of its popularity.
"It's kind of like dancing with the devil. It's a blessing and a curse," said Wells Fargo analyst Jennifer Fritzsche.
(Additional reporting by Tarmo Virki in Helsinki, Harro Ten Wolde in Frankfurt, Leila Abboud in Paris, Jane Wardell in Sydney, Kevin Lim in Singapore, Maki Shiraki, Reiji Murai and Tim Kelly in Tokyo and Lee Chyenyee in Hong Kong; Editing by Bob Burgdorfer)


Thursday 13 September 2012

10 years business cycle for mobile phones - iPhone 5

In the early years, it was Motorola.
Nokia dominated the market for the subsequent 10 years.
Then RIM dominated for 10 years with the Blackberry phone.
The last 5 years, Apple dominates with its iPhones.

This is the business cycle of the mobile phone. The competition is stiff. Competitors introduce new phones very quickly to capture market share. Each new phone that dominates seem to have a life cycle of about 10 years.

Wednesday 20 October 2010

Apple CEO blasts Google, Blackerry maker RIM

REUTERS, Oct 19, 2010, 11.17am IST

steve-jobs.jpg
Apple Inc CEO Steve Jobs went on the offensive after a rare disappointment in sales by the iPad maker. 
SAN FRANCISCO: Apple Inc CEO Steve Jobs went on the offensive after a rare disappointment in sales by the iPad maker sent its shares tumbling, but even his biting words failed to reverse market sentiment. 

Jobs, who has not addressed investors on an earnings call for two years, lashed out at competitors Google Inc and Research in Motion and dismissed the smaller tablets made by rivals such including Samsung and Dell. 

"The current crop of 7-inch tablets are going to be DOA, dead on arrival," Jobs told analysts on the conference call. "Their manufacturers will learn the painful lesson that their tablets are too small." 

Shares of Apple -- the second-largest corporation on the Standard & Poor's 500 index, after Exxon Mobil -- slid 6 percent in after-hours trading, which would be their biggest single-day loss since 2008. 

Supply and production bottlenecks kept iPads, which have a 9.7-inch touch screen, from store shelves and buyers waiting weeks sometimes for their gadget. The company sold 4.19 million iPads in the fiscal fourth quarter.

"A little bit disappointing there. Street was expecting closer to 5 million units. The problem is supply, they can't make enough of them," said Gleacher & Co analyst Brian Marshall.

Analysts said sales should ramp up in the holiday quarter as Apple resolves supply hitches.

Gross margins fell short of target as iPads, whose profit margin is lower than it is for iPhones, made up a larger proportion of Apple's sales.
Investors had expected more from a company that had smashed Wall Street's targets in each of the past eight quarters. 
Gross margins came to 36.9 percent, below Wall Street's average forecast of 38.2 percent, despite better-than-expected components costs in the period. 

"The one surprise is on the margin side. Everything else is pretty spectacular," said Gartner analyst Van Baker. 

There was no disappointment in the iPhone, however, whose surging sales showed little impact from a PR debacle last summer over the device's antenna. 

Apple sold 14.1 million of the smartphones, a gain of 91 percent and better than Wall Street had expected. The company said demand is still outstripping supply, with the iPhone now available in 89 countries. 

Mac sales surged 27 percent to 3.9 million, at the high end of analysts' estimates. Apple Chief Financial Officer Peter Oppenheimer said the strong Mac performance was evidence that the iPad was not cannibalizing sales. 

Surveying the competition 
Jobs noted that Apple's iPhone outsold RIM's BlackBerry in its most recent quarter. "I don't see them catching up with us in the foreseeable future," Jobs said. 

And he criticized Google's Android as a "fragmented" operating system. RIM and Google did not respond to requests for comment. 

In the still emerging tablet market, Jobs said there appears to be just a "handful of credible entrants," and he said price points on rival tablets won't be able to compete with the iPad, which starts at just $499. 

Some analysts agreed with Jobs, and foresaw sales of the iPad, which came on the market only in April, jumpstarting next year as the gadget gets rolled out to more countries and to more mass-market retail outlets like Wal-Mart Stores. 

As an indication of industry bullishness, research group iSuppli said it expects Apple to sell a whopping 43.7 million iPads next year. 

"iPads were low, but I also think they had a lot of production problems getting that off the ground. So I don't think that really is a good demand indicator for iPad," said analyst Jane Snorek of First American Funds. 

Apple reported a net profit of $4.31 billion, or $4.64 a share, in the fiscal fourth quarter ended September 25, up from $2.53 billion, or $2.77 cents a share, in the year-ago period.

That was better than the average analyst estimate of $4.08 a share, according to Thomson Reuters I/B/E/S.

Revenue surged 67 percent to $20.3 billion, ahead of Wall Street's target of $18.9 billion. 

As it looks ahead to the holiday season, Apple -- which typically issues very conservative outlooks -- forecast current-quarter earnings of $4.80 a share on revenue of $23 billion. The consensus estimate is for a profit of $5.07 a share on revenue of $22.4 billion. 

Shares of Cupertino, California-based Apple slid 6.1 percent to $298.50 in extended trading, after a brief trading halt. They closed at $318.00 on Nasdaq.


Read more: Apple CEO blasts Google, Blackerry maker RIM - The Times of India http://timesofindia.indiatimes.com/tech/news/hardware/Apple-CEO-blasts-Google-Blackerry-maker-RIM/articleshow/6773120.cms#ixzz12uXX4yOV

Your iPad, iPhone can give you infection

ANI, Oct 18, 2010, 11.05am IST

iPad.jpg
Apple iPad
MELBOURNE: People who use display iPads and iPhones at Apple stores are likely to get serious infections and the company should do more to maintain hygiene, says an Australian expert. 

Peter Collignon, a specialist in infectious diseases at the Australian National University, followed research that found a higher risk of transmitting pathogens from glass surfaces like on iPads to human skin. 

"You wouldn't have hundreds of people using the same glass or cup, but theoretically if hundreds of people share the same keyboard or touch pad, then effectively that's what you're doing," the Age quoted Collignon as saying in a phone interview. 

"The germs we transmit via our hands can frequently have germs that can cause anything from the flu to multi-drug resistant diseases." 

Scores of people visit Apple stores around the country every day to play with the company's latest gadgets. Earlier this year, an investigation by the New York Daily News found that of four iPads swabbed in two Apple stores, two contained harmful pathogens. 

One contained Staphylococcus aureus, the most common cause of staph infections, while another registered Corynebacterium minutissimum, a bacteria commonly associated with skin rash. 

A study published in the Journal of Applied Microbiology cautioned people against sharing their devices, as there was a higher risk of spreading germs from glass surfaces. Collignon said Apple and other gadget stores with touchscreen devices on display should make hand hygiene products "more readily available on counters." 

"It doesn't have to be anything fancy it just has to be a 70 per cent alcohol solution. Maybe the various computer stores can make a more frequent effort to clean their equipment," he said. 

"If you want to protect others then preferably don't share but if you do make sure your hands are clean before you touch it and afterwards," added Collignon.


Read more: Your iPad, iPhone can give you infection - The Times of India http://timesofindia.indiatimes.com/tech/personal-tech/computing/Your-iPad-iPhone-can-give-you-infection/articleshow/6767508.cms#ixzz12uTW16fU