Update – January 22, 2009: Piper Jaffray analyst Gene Munster now believes a new iPhone model may be coming in June. More > HERE
Via Jim Goldman’s TechCheck blog: “We (Piper Jaffray) cut our estimates on iPhone, but it’s more of a shift. The expectations of having a March launch of a new form factor looks less likely.” He spoke to a manufacturing source in Asia which says new components will be delivered to Apple in late March or early April which means a new phone might not come until June. Gene was expecting that new phone in March. So, “We pulled the plug on our 45 million unit sales estimate for (calendar) 2009. There’s just no way without that March release.” His new calendar 2009 estimate is 28 million iPhone units. In 2010, he ups the figure by around 15 percent to 32 million.
Apple (AAPL) Q1 2009 Earnings Call – Discussion re Prepaid Markets
iPhonAsia comment: During today’s (January 21, 2009) Apple (AAPL) Q1 2009 earnings conference call, Piper Jaffray analyst Gene Munster asked Apple’s Chief Operating Officer Tim Cook about Apple’s strategy for entering “non-subsidized” markets. Q1 2009 earnings call transcript > HERE
To provide a bit of background and context … “non-subsidized” or “prepaid” markets are those where the majority of cell phone users are not on any fee-for-service contract with their wireless service provider. Prepaid customers typically purchase cell phones at full retail price without any type of carrier subsidy. The carrier has no motivation to subsidize (sell mobile phones below market price to the customer) handsets since the customer can simply walk away from the “prepaid” service relationship at any time.
Prepaid users are often on a tight budget and buy their “air-time” as they need it. In most markets, prepaid customers do not have to pay a deposit for cellular service. Topping up prepaid accounts is often done by going online, by phone, bank-machine or through the purchase of a pre-paid SIM card.
The largest “prepaid” cellular markets in the world are India, China, Indonesia, and greater Asia. Between China and India there are estimated to be more than 600 million prepaid customers. China Mobile alone has more than 290 million prepaid customers.
Here is the “Q&A” exchange (a close paraphrase) between Gene Munster and Tim Cook:
Piper Jaffray analyst Gene Munster
Gene Munster: “Hey good afternoon and congratulations (Apple had outstanding earnings). If you talk about the pricing environment to the pricing umbrella on the iPhone … if you look at your addressable market of almost 1,000,000,000 subscribers that you currently address, about 60% of them are in “un-subsidized” or “non-contractual” (a.k.a. “prepaid”) markets. Are those markets that you are potentially interested in? How should we think about an addressable market if they (prepaid markets) are a market that you are basically priced too high for?”
Apple COO Tim Cook
Tim Cook: “Gene, it’s Tim. We are now in over 70 countries with the iPhone and you are correct, some of those countries are non-subsidized markets. The largest example of that would be India in terms of the size of the non-subsidized market. And our sales are clearly materially less in those markets (e.g. in India) than in the subsidized markets that have post-pay contracts. And so we are constantly evaluating the best way to play in these markets. We know that there is a huge market opportunity there. And we’ll make adjustments in the future accordingly to play in a stronger way.”
Gene Munster: “Okay, so when you talk about no pricing umbrella, you are referring more towards the subsidized markets verses the non-subsidized markets?”
Tim Cook: “Yes, and clearly you know we are not going to play in the low-end voice phone (dumb phone) business. You know that is not who we are, and not why we are here. We will let somebody else do that. Our objective is not to be the unit share leader in the cell phone industry. It is to build the world’s best phone!”
During the latest quarterly conference call, and in an answer to a question about a cheaper iPhone, Tim Cook said “We’re not going to play in the low-end voice phone business. That’s not who we are, that’s not why we’re here. Goal is not to lead unit sales, but to build the world’s best phone.”
This shouldn’t surprise at all. All this says is Apple’s not competing in the dime-a-dozen phones. It is no way a comment about an iPhone nano.
The rumored and desired iPhone nano is still a smartphone. It would just lack a few features for those who dont’ need an iPhone with the lot. For example, it might have no GPS or WiFi. It also might be slightly smaller.
But it should definitely still be a smartphone.
So, we can still live in hope that the iPhone nano is planned.
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