updated 11:40 am EDT, Tue June 10, 2008
Piper: Long view of iPhone
Investors should concentrate on the long-term when considering the impact of the iPhone 3G, says the analyst firm Piper Jaffray. Expanding on earlier arguments, Piper notes that despite Apple losing out on subscription revenue from iPhones, its CY08 and CY09 shipment predictions remain unaffected, at 12.9 and 45 million units. Apple is moreover believed to be charging carriers approximately $466 per iPhone, with companies such as AT&T absorbing a subsidy of roughly $267. Wholesale iPhone prices are only expected to decline to $425 during CY08.
What may be of greater interest to investors is the impact of the App Store, as Piper is predicting an average of two apps sold per user per year, at an average cost of $5 each. If there are 78 million iPhone owners by the end of of CY09 there should be $780 million in extra revenue, with 30 percent ($234 million) diverted to Apple. That in turn could represent 3 percent extra for Apple's CY09 operating income.