Welcome to the cut out and keep guide to first glance reactions to the iPhone, with analysts raising estimates and saying Apple looks good to hit its ten million sales target, and citing the potential effect of the disruptive technology on the smartphone market.
Ralph de la Vega, President & Chief Executive Officer of AT&T Mobility said: "This device is a true game changer. Why? The immediacy of the data at your fingertips is huge. Imagine, looking up anything, anywhere. It (3G iPhone) allows you to leave your computer at home. It totally and completely mobilizes your data. Before this device you weren’t really un-tethered, but with this you are. I think people have tried to build a $100 laptop, and here is a $200 phone that can do all that over 3G. It will have a big impact, and will be ubiquitous."
AT&T has revealed iPhone subsidies will cut its earnings per share by 10 cents to 12 cents in 2008 and 2009 with Chief Financial Officer Rick Lindner said the move will put pressure on AT&T’s forecast for double-digit earnings growth this year.
Under the new pact, AT&T will not give Apple part of its monthly service fees, unlike their first iPhone agreement.
"I think that in this type of market asking shareholders to deal with more dilution for the sake of iPhone is a lot," said Crowell, Weedon & Co analyst Douglas Christopher, who has a buy rating on AT&T shares.
Gartner analyst Kenneth Dulaney said the plan to stop paying a portion of revenue to Apple made the hit to earnings all the more surprising. "This says that the product is so hot the carriers have lost all their power to negotiate," he said.
Jupiter Research analyst is excited about MobileMe, saying: "One of the pieces that’s been missing at least from Apple’s portfolio has been a strong social networking play. It’s fantastic to have the sync features across all of my devices. We know consumers want to buy content once, create playlists once, pay for access once, etc. and then be able to access from any device. Apple sets a high bar here that has been challenging to replicate at least with media. (Their "nod" to MS on "Outlook for the rest of us" acknowledges that)"
Ian Fogg, also of Jupiter Research, notes: "Worldwide availability on the same date, just a month from now. This takes some doing. Congrats to Apple for understanding that launching in just the US isn’t the way to win hearts, minds and wallets elsewhere."
Charles Dunstone, CEO, The Carphone Warehouse Plc, said:, "The iPhone 3G is a massive step forward for mobile internet. The iPhone continues to lead the pack and now customers will have fast, simple access to true internet on the move. It’s rare for a mobile phone to cause global excitement but iPhone sets the standard for others to follow. I’m delighted that we’ll be offering the new iPhone 3G for free on a contract. We’re expecting a huge demand when it goes on sale across our 800 stores on 11 July and there are some great upgrade offers for those that have previously bought an iPhone on the O2 network"
Lehman Brothers this morning raised its price target on Apple to $234 from $202 and cut AT&T’s target to $49 from $54, citing Apple’s announcement of the 3G iPhone at a discounted price tag. "We believe existing revenue sharing arrangement (with Apple) costs AT&T $100 during the life of an iPhone customer", said Lehman Brothers analyst Thomas Seitz. Citigroup also raised its price target on Apple to $287 from $248.
Charles Golvin, a principal analyst with Forrester Research, agreed. "Apple needed 3G, they needed a more attractive price, to make its goal," he said, adding that the prospects of reaching the 10-million mark this year are "pretty much a certainty."
"Apple is competing in more markets at lower price points (again subject to price plans). Therefore, we feel that this time the potential for disruption is greater than before," observed Steven Hartley, senior analyst for London-based Ovum.
Shares tell the news:
HTC, down 57 points at NT$765
RIM. up $2.71 after falling to $132.41 on late trades last night.
Palm, down 28-cents to $6.79 per share
Nokia, fell last night, now at $26.61