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Analyst Offers Thoughts on iPhone Success, Multi-Carrier Business Models, iTunes Video Content

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Piper Jaffray analyst Gene Munster today issued a note to clients this morning offering his team's thoughts on 14 "unanswered questions" about Apple. Several of his more revealing comments relate to the iPhone, which Munster feels will see its reach broadened to multiple carriers in the U.S. sometime within the next year.

Munster points to data from France, where Apple was forced by the courts to adopt a multi-carrier model, as an indication that Apple will rapidly transition its distribution model to multi-carrier agreements wherever possible, suggesting that such a change may occur in the U.S. next summer during the next probable iPhone refresh.
By way of example, for various reasons the company moved from an exclusive relationship with French wireless carrier Orange to a multi-carrier model. In France, the company now enjoys dramatically higher market share (in the 40 percent range vs. about 15 percent in ROW) than in countries with exclusive carrier agreements (such as AT&T in the U.S. where the iPhone has market share in the mid-teens). We believe Apple is seeing the increased unit sell-through more than offset the slightly (~10 percent) deteriorated economics per unit involved in non-exclusive agreements.
The report also suggests that Apple is unlikely to ever offer a low-cost phone model to compete with "rudimentary $10 models", citing the App Store as a key component to Apple's success in the mobile phone market and the near certainty that Apple would not be able to create a profitable low-cost phone still capable of running those applications.

Munster also sees the success of the iPhone 3GS, beyond that of Apple's expectations, as being due to two primary factors: 1) The success of the App Store, both in its applications themselves and in the cross-promotional "free advertising" the iPhone has received from high-profile companies promoting their iPhone applications, and 2) The fact that the smartphone industry has positioned the iPhone as the "gold standard", whereby competitors trying to emulate the iPhone experience are actually promoting the iPhone platform instead of their own products.

On the topic of iTunes Store video content, Munster sees Apple looking to modernize its offerings within the next year, entering likely lengthy negotiations to revamp arrangements currently limiting the amount of content and the allowed periods of availability. Apple would be looking to offer a monthly package of video content designed to replace a customer's cable bill, and may launch the service alongside upgraded Apple TV software and/or hardware.
We continue to believe that Apple will eventually offer a monthly subscription for iTunes TV shows accessible on Apple TV, iPods, iPhones, and Macs/PCs. Apple could leverage its deep library of content with many network and cable channel content owners to provide unlimited access to a sub-library of its TV shows for a standard monthly fee ($30 to $40 per month). Such a product would effectively replace a consumer's monthly cable bill (~$85/month) and offer access to current and older episodes of select shows on select channels. While timing on the launch of such a product is very uncertain given the negotiations that would need to take place, Apple may work to launch it simultaneously with a new version of Apple TV, or updated Apple TV software within the next year.

Article Link: Analyst Offers Thoughts on iPhone Success, Multi-Carrier Business Models, iTunes Video Content
 

MacFly123

macrumors 68020
Dec 25, 2006
2,340
0
FREE THE US iPHONE!!! :D

And I would LOVE an Apple TV update! I have been waiting for a while now! :cool:
 
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jaw04005

macrumors 601
Aug 19, 2003
4,370
16
AR
I wouldn't get too excited. This is Munster after all. He's proven time and again he doesn't know anything that we don't know.
 
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spazzcat

macrumors 68030
Jun 29, 2007
2,787
1,626
I been watch a lot of Hulu on my TV thought PlayOn. And until banthwidth improves in the US. I can't see people replacing their cable service with download service.
 
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Big Jelly

macrumors newbie
Aug 28, 2009
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Not sure this would be a very viable price. I mean there is alot of competition out there already. Huly, Netflix, and others offering Movies, and New TV Shows for free or cheaper 8.99 for Netlfix.

Also I dont pay $85.00 like they stated hell I pay 30.00 for Satelitte TV and I get instant access to thousands of shows in HD.

I know I have stopped buying tv shows from iTunes because I personally feel 1.99 is to much for a 1 episode in SD. I feel Tv shows and Music should be .99 an episode maybe 1.99 for HD. In fact I think it would be a much better value to buy a show at .99 and a Song at 1.99 seeing as I will watch the show once and listen to music probably for a few years at least.

I think apple is not taking the e-media serious. Apple TV gets almost no support and maybe yearly basic upgrades. there is a TON of things they could do to make the apple TV a staple of the household, but they havent.

Although I think we will see a new apple TV is the future here that does movies, music, and games sooner than we think.. 2010..
 
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SwiftLives

Contributor
Dec 7, 2001
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Charleston, SC
The Cable replacement thing would be awesome. But I still have trouble believing that these analysts are talking out of their mouths instead of their posteriors.
 
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OllyW

Moderator
Staff member
Oct 11, 2005
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It's just common sense really, if you have availability from multiple carriers you are bound to sell more.

I doubt if anyone has bought an iPhone just because it is exclusive to AT&T or O2, but there are a lot of people who haven't purchased because they can't get it on their carrier of choice.
 
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Steve Jobs=God

macrumors 6502
Apr 13, 2007
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So his reasoning behind why he thinks the iPhone will go multi carrier in the US is because they do it in other countries?

Even for Munster thats stupid
 
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kurosov

macrumors 6502a
Jan 3, 2009
665
272
Once again an 'analyst' points out a few obvious things then fills the rest with any old crap he can think of at the time.
 
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iOrlando

macrumors 68000
Jul 20, 2008
1,811
1
only way i watch movies is renting HD from apple tv. and i must say..it kind of stinks waiting 2-3 hours for a download to play. I always have to think before hand which movie I want to see at night. any improvement to this...i would like.

also some movies not offered in itunes (like transformers) stinks.
 
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chrisrlzz

macrumors newbie
Mar 12, 2009
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0
Apple already has multi-carrier agreements in other countries, like Australia, where all 5 major national carriers have the iPhone 3Gs available, and all offer it on pre-paid and even apple sell it out-right from their own website and in Apple retail stores, without a contract or locked to a certain carrier when buying outright... The iPhone 3G was only with 3 major carriers before, but loosened its belt with the 3Gs so I don't know why this particular case in Orange would change Apple's mind all of a sudden...
 
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BeyondtheTech

macrumors 68020
Jun 20, 2007
2,124
632
They have further indicated that there is a 50% chance of being accurate with their analysis. ;)

Seriously though, I am hoping for multi-carrier distribution in the US, but that would mean either two things: T-Mobile gets an official iPhone, or Apple creates a iPhone with LTE/3GPP/4G technology for Sprint and maybe Verizon to take a crack at it. What are the chances of either?

On the flipside, I would love to rid myself of my cable TV. It's been cluttered with infomercials and pointless channels that I'll never watch - what ever happened to "a la carte" programming they were talking about a while ago? I'm sure I'm not the only person in the world who doesn't watch any of the sports channels, and I'm quite sure that takes up a chunk of service costs. Give me internet, and I'll use my iPhone and a MagicJack or Ooma for telephone, and TV will be all internet-based, even PPV is acceptable if the costs were low enough.
 
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mozmac

macrumors 6502
Apr 28, 2005
332
15
Austin, TX
Funny that this should come up this morning. I just wrote a post on Friday about how the cable companies were going to have a run-in with Apple and other tech companies pretty soon.

The post is here, for anyone who cares to read it: http://www.blurtdaily.com/2009/08/28/apparently-im-forced-to-pay-for-child-abuse-jokes/

I would love to be able to build my own tv subscription package and watch it on my Apple TV. We don't even have cable at our house anymore and are doing pretty good without it.
 
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GQB

macrumors 65816
Sep 26, 2007
1,196
109
only way i watch movies is renting HD from apple tv. and i must say..it kind of stinks waiting 2-3 hours for a download to play. I always have to think before hand which movie I want to see at night. any improvement to this...i would like.

also some movies not offered in itunes (like transformers) stinks.

You obviously don't own an AppleTV.
You can begin playing any downloaded movies within a minute of purchasing.

I have my own problems with ATV. There's been a known bug since day one wherein a newly downloaded movie shows up as silent whitescreen with just a progress bar, and the only work-around is to pull the plug on the box and restart. Absolutely stupid. The inability of Apple to fix this is mind-numbing.
(aside... if anyone has any more recent info on a fix to this bug, please let me know.)

But its a sign of how much I love ATV that I ignore this stupidity and just work the bounce into my process. Life goes on.
 
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BeyondtheTech

macrumors 68020
Jun 20, 2007
2,124
632
...I feel Tv shows and Music should be .99 an episode maybe 1.99 for HD...

TV shows at 99¢ each could get pricey quickly. I can see my wife quickly running up the iTunes bill with watching One Life to Live, Days of Our Lives, Young and the Restless, The Doctors, and Dr. Phil every day. That's $125 for one month!
 
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MarlboroLite

macrumors 6502a
Oct 29, 2007
579
5
the 13 colonies
Duh

It is obvious to me that the iPhone will lose the ATT exclusivity at the end of the contract in 2010 or maybe 2011 after a one year extension at most. But that's it.

To the idiots claiming it would just be too much hassle to add a CDMA chip to the phone should ask why every other manufacturer has multiple phone versions with different chips and Blackberry manages to have a world phone for verizon that works with GSM too, yet this is just too burdensome for Apple?

That's like saying that Apple could only build one version of a computer without any customization at all--sure it would be great for Apple to have a single model to sell but that doesn't work in the real world, people want options and ultimately the company is better off because nobody would buy a MacBook if you could only get 1 model with no choice on anything else.

It would cost apple probably pennies per device to include a CDMA chip for a particular batch of phones. Ultimately LTE will come to Verizon but it won't cover everyone at launch, it's gonna take probably 5 years to cover everyone. Is Apple going to not sell the iPhone to the other largest carrier until 2016? Yeah right. They'll add the extra chip, and make money.

Oh and they have proven they are willing to modify the phone for a particular market:the China phone with no wifi.
 
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Evangelion

macrumors 68040
Jan 10, 2005
3,314
5
So his reasoning behind why he thinks the iPhone will go multi carrier in the US is because they do it in other countries?

Even for Munster thats stupid

Um, his argument is that Apple will go multi-carrier because doing so has given them higher market-share in other countries...
 
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Cougarcat

macrumors 604
Sep 19, 2003
7,766
2,552
I propose that if a news headline has "analyst" in the title, it should automatically go to page 2.
 
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SwiftLives

Contributor
Dec 7, 2001
1,344
309
Charleston, SC
To the idiots claiming it would just be too much hassle to add a CDMA chip to the phone should ask why every other manufacturer has multiple phone versions with different chips and Blackberry manages to have a world phone for verizon that works with GSM too, yet this is just too burdensome for Apple?

CDMA is pretty much on its way out. Apple has absolutely no incentive to spend R&D (which I am reasonably certain would cost a bit more than "pennies") to implement a CDMA-enabled iPhone - especially since the only place it would be supported is in the US.

Removing wifi and implementing a different technology are two rather different beasts.
 
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reallynotnick

macrumors 6502a
Oct 21, 2005
952
503
Basically this has been my pipe dream for awhile, have the iPhone on other carries like T-Mobile (well mine is unlocked :D) and offer me a better cable plan.

I don't consider myself watching a lot of TV or movies but the prices on iTunes are just way too high.
 
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Michael73

macrumors 65816
Feb 27, 2007
1,081
39
Last year I went all-in...almost

Last November I finally caved in and replaced my 1984 25" Mitsubishi tube TV with a Samsung 52" LCD from Best Buy along with all the other goodies (receiver, 5.1 speakers, etc.).

The one thing I didn't get that I wanted...an AppleTV. My Plan was to buy something like this for myself as a holiday present this December hoping they'd do a product refresh by then. What's the possibility?
 
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