Synchronoss loses a 1/4 of business with 3G iPhone
updated 12:40 am EDT, Thu June 12, 2008
Synchronoss loses business
With the release of the 3G iPhone, Apple has clarified that all units must be activated at the store for them to be sold, taking away nearly a quarter of Synchronoss' business – the company responsible for home iTunes-based iPhone activations. Silicon Alley Insider writes that as the company confirmed the loss of Apple's business in a filing to the SEC, its stock tipped, falling almost 19-percent, as the news lines up with financial expectations given in its first quarter.
"Synchronoss will not participate in the on-site, retail store activations associated with the 3G iPhone, which was already taken into consideration when we provided our revised financial outlook on our first quarter 2008 financial results conference call," wrote Synchronoss in its SEC filing.
Synchronoss' stock took a beating shortly after announcing its Q2 financial outlook, dropping almost 44-percent in after-hours trading, since it was aware of the shift in Apple's activation strategy. The company was bound by a non-disclosure agreement, and was unable to specify why its numbers had been so modest.
In total, Synchronoss has lost 78-percent of its market value since hitting its 52 week high in fall 2007.
Join the crowd
06/12, 12:54am (1 reply) reply
Everyone else is losing money, jobs and marketshare now too.
dampeoples
Mac Elite
Joined: Jul 2002
re: Join the crowd
06/12, 08:50am reply
Huh? Everyone is? I don't know a single person that has lost their job, the latest numbers on retail do not reflect 'everyone' losing money and how does 'everyone' lose market-share?
mgpalma
Fresh-Faced Recruit
Joined: Sep 2000
Those who do not remember
06/12, 12:12pm reply
It's not the first time a company has been burned after doing business with Apple. It's actually quite an old story and one of the reasons Apple has such a bad reputation in the Valley. Greed springs eternal though, so when companies see fat Apple contracts come they forget how quickly Apple contracts can be yanked. Apple is not a company which builds long-term relationships or which has "partners."
TheSnarkmeister
Fresh-Faced Recruit
Joined: Jun 2007
Burned?
06/12, 02:30pm reply
Synchronoss markets a service. Apple makes use of the service. Synchronoss earns money. Apple does not need the service anymore and stops using it. Synchronoss stops earning money for a service that is not used anymore. How is Synchronoss getting burned? Should Apple still be paying for a service they are not using anymore? I think it is bad for any company to build a majority of its business on serving one single client. Even worse if it turns out that you've been given a cash cow and have not used the opportunity to expand your business beyond it. Im in no position to judge Synchronoss' management decisions with almost no information. But to claim that it has been burned by Apple because Apple does not make use of the service anymore is just absurd.
repi8
Fresh-Faced Recruit
Joined: Apr 2007
But was this Apple...
06/12, 05:06pm reply
or AT & T?
bigpoppa206
Fresh-Faced Recruit
Joined: Jun 2003
Middlemen are disposable
06/13, 10:06pm reply
The don't sell the phone or the cellular service. They were just an unnecessary middleman. Everyone I know with an iPhone knows who Apple is, and they know who AT&T is. Until now I've never, ever heard of Synchronoss.
I doubt they'll be missed (or even noticed, outside a handful of shareholders).
Guest
Fresh-Faced Recruit
Joined: Nov 1999