Barron's: Apple stock slide linked to iPhone rumors
updated 10:10 am EDT, Fri May 23, 2008
Barron's on AAPL slide
A recent slip in Apple's stock value over the course of a day -- to as low as $175.41 on Thursday -- was attributable to iPhone rumors, writes Barron's. The financial publication notes that even though Apple has not technically announced the 3G iPhone, "rumors of a rumor" began circulating on Thursday that the product would be delayed, causing mild investor panic. As of press time, Apple stock has since recovered some of its value. Apple is expected to reveal the existence of the 3G iPhone on June 9th, the beginning of the company's WWDC conference in San Francisco.
Barron's also writes that the CFO of AT&T, Rick Lindner, is saying that the carrier yet to decide its pricing for the next iPhone, even though accounts have circulated that it is dropping revenue sharing and going with a subsidized scheme. Although Apple would lose out on a continual source of income, AT&T would have to drop its price by as much as $200, and thereby increase sales of the actual handsets.
"There’s not been a product announcement. There hasn’t been any pricing decisions made. That’s yet to come," says Lindner.
Say it ain't so.
05/23, 10:27am (2 replies) reply
So they want to make the iPhone just like every other friggin phone on the market. Cheap phone locking you into a contract.
The phone doesn't need a cheaper price. They were able to sell as many as they could make at FULL price still with a contract. Why the need for a subsidy? AT&T fears change.
bjojade
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Joined: Jun 2007
My theory on pricing
05/23, 10:59am reply
Release 1.0 - Recoup development costs by charging a premium to early adopters.
Release 1.1 - Cut pricing to broaden appeal
Release 2.0 - Cut costs again to widen marketshare and make it up on volume and future sales for the platform.
njfuzzy
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Joined: Apr 2001
fuzzy wuzzy
05/23, 11:26am reply
njfuzzy,
Hit the nail on the head!
Twelvepoints
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Joined: Oct 2006
price cuts
05/23, 12:24pm reply
Wouldn't the change from revenue sharing be just changing how the subsidies work, thus really negating any change in final price? The theory has been the unsubsidized price is $150 higher, with the difference made up over the revenue sharing. By dropping the revenue sharing, the phone's cost goes up, not down. Subsidizing might drop it back down to $399, and possible enhancements to manufacturing cut down the actual cost of the device, but I can't see it going down to $200.
Esp. since it would break Apple's ideal of making sure they sell 'high-end' merchandise. iPhone owners don't want every idiot on the street owning one. They won't feel special, then.
testudo
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Joined: Aug 2001
Re:t***
05/23, 04:11pm reply
Original iPod was $400 and $500. Now iPods are the most popular portable digital music player in a good part of the world.
Apple fans and stockholders have no problem with iPods being the most popular portable digital music player. In the same sense, Apple is not going to give away the iPhone, (let me guess, they PROBABLY have some very smart people calculating risk and benefits of different situations), so gaining market share will most likely to be good news.
BTW, any wild "price cuts" are pure speculation at this point in time, and most likely to be rumors passed through the rumors outlets that got picked up by news outlets.
dliup
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Joined: Jan 2006