Some people might be wondering why the new iPhone 3G is going to be so cheap in comparison to the first-gen device. While it’s easy to point out that Apple is likely getting more money from AT&T, rather than relying on actual sales of the device, that’s not the only reason. Analysts suspect that the newer iPhone really only costs around $100 to manufacture.
Portelligent estimates that with this lower manufacturing cost that Apple stands to make around $90 per phone on hardware alone. While that is significantly lower than the estimated $229 profit earned on the original iPhone, the extra money from AT&T that they are likely making in addition to the number of new users that will be attracted by the lower price will no doubt make up for the difference.
According to David Carey, president of Portelligent “Gen2 iPhone pricing is aggressive enough that it made me think Apple’s really taking the gloves off on this one. They are probably not as worried about iPhone hardware profits as they are about getting a piece of the action on service revenues and getting more Macs in homes and offices all around the globe.”
I have to agree with Carey on those points. With such a low price point, it’s going to be hard for other high-end phone manufactures to compete. Not to mention the number of new users that will be introduced to Apple’s products and therefore be tempted to “switch” to a Mac.
[via Macnn]
Written by Scott Barr on June 17th, 2008 with no comments.
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A little light has been shed on what exactly Apple has planned for P.A. Semi, that is recently acquired for $278 million. It is rumored that prior to this acquisition, Apple had invested in P.A. Semi back in 2005. You will remember back in 2005, Apple switched from PowerPC to Intel chips. At the time P.A. Semi was operating with a PPC license, and it is assumed that Apple had come to them to manufacture low power PPC chips for there Mac lineup.
It seems that Apple again has their eye on P.A. Semi, but it does not answer the question of why they bought them. It would appear that P.A. Semi had acquired a little obligatory debt, that Apple paid off, and brought P.A. Semi under Apple’s control. Now Apple has access to all of P.A. Semi’s intellectual property and patents, and to Apple they must have been worth the cash.
Apple’s plans behind the acquisition are foggy. They want P.A. Semi not for a product that they currently design, but for their experience. Apple most likely will use P.A. Semi to design a chip for a new portable device, as it is very unlikely they would switch CPU architectures again for the Mac line. Unfortunately, we will just have to wait and see.
[Via MacRumors]
Written by Chase Higgins on May 8th, 2008 with no comments.
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Piper Jaffray analyst Gene Munster didn’t get to list Apple under “areas of expertise” on his CV by not knowing a fair bit about the Cupertino company, and the smiling soothsayer has been addressing fifteen key Apple-related questions this week in a report to his flock of investors. Covering all aspects of Apple’s retail, Mac, Apple TV and, of course, iPhone business, Munster describes his predictions for a family of 2-3 Apple cellphones, why lower price points are an inevitability, and how he expects the company to move to being carrier agnostic. His suggestion of 2-3 new iPhones that diversify the range isn’t a new one, but he has decided that China will get the handset in 2009.
“We continue to expect Apple to offer a family of iPhones (2-3 separate models) in the first half of 2009, including lower priced ($200-$300) models. Just as the company slowly diversified the iPod lineup and entered lower price points with every new version of the iPod, we expect Apple to launch new models of the iPhone at lower price points in CY09. This expectation, along with the expectation for lower price points, and world wide availability of the phone, is critical to our CY09 iPhone estimate of 45m units” Gene Munster, analyst, Piper Jaffray
“[W]e believe Apple is not hesitant to try business models other than the exclusive models the company has chosen during the iPhone’s first year. It has enabled Apple to maintain tight control on the user experience of the iPhone, but expanded availability will likely become a higher priority, and we believe it will eventually drive Apple to offer the iPhone on multiple carriers in each country” Gene Munster
Munster also addresses Apple’s introduction of the App Store, describing it as a recognition that the iPhone user base was “dissatisfied with the simplified Web 2.0 apps available on the iPhone’s web browser.” He describes the developing iPhone and iPod ranges as a sign that Apple is looking to “transform the MP3 market into a portable computing market” and that the iPod touch is the first of many WiFi-enabled, internet-friendly PMPs. For anybody hoping for an Apple Tablet, Gene suggests it may take a few years, but will come as an evolution of the MacBook’s MultiTouch trackpad (which itself will evolve to an embedded color touchscreen):
“Eventually, we expect Apple to change the trackpad to backlit color screens for a more dynamic user interface on the Mac. And ultimately, we expect Apple to develop a full touch-screen MacBook, although not until the technology has fully matured over the next 3-5 years” Gene Munster
Nothing especially new on the iPhone, overall, but the omission of the 3G iPhone from any of Munster’s answers is a curious one. You can read the full list of questions and answers at Apple Insider.
[via iPhone Investigator - thanks Michelle!]
Written by Chris Davies on May 1st, 2008 with no comments.
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What a number! In the second fiscal quarter of this year, Apple was able to push a little over 1.7 million iPhones out the door. This is the overall theme of the Apple earnings report, with Apple announcing a whopping $1.05 billion in profit. Since there is not last year comparison of iPhone sales, their is no growth estimate, but they are no doubt selling plenty of them.
The iPhone may be selling great, but there is quite a bit more exciting news for Apple than the iPhone. The amount of Macs sold is up 51%, and the amount of profit from them is 54%, over last year. This is of course in line with the exploding popularity of Macs lately. Apple is not longer a US only affair, as 44% of Apple’s revenue came from international sales.
iPod sales are still high, but seem to be pretty flat. No real growth there. 1% growth in sales, and 8% growth in revenue. Any growth is good though, so it is not like the iPod division is not performing well or anything. The iPod still carries 73% of the MP3 player market.
[Via Apple]
Written by Chase Higgins on April 23rd, 2008 with no comments.
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Apple has been making some moves in the last year. I am not just talking about product sales either. Apple has jumped up to number 103 on the FORTUNE 500 list. The FORTUNE 500 is a list of the 500 top companies according to net revenue. Last year, Apple was 121. This 18 spot jump is a result of almost $3.5 billion in profits last year.
Some of this success no doubt must be contributed to the huge hit that has been the iPhone. Never before has a single phone captured the eye of so many people. It is absolutely unprecedented. It is not to say that Mac and iPod sales were not good last year, but with 4 million plus iPhones sold so far, and that revenue sharing agreement, Apple is living large off the iPhone.
Interesting note as well, AT&T made a huge jump on the list as well. They jumped from spot 27 to 10. This is speaking of the main AT&T division. The mobile interests of AT&T were no doubt flooded with money this year, meaning the iPhone may be responsible for at least part of AT&T’s great year.
[Via Macsimus News]
Written by Chase Higgins on April 22nd, 2008 with no comments.
Read more articles on 3G iPhone and Analyst and Apple and Cingular / AT&T and iPhone and iPhone archive.
