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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.




by MacNN Staff

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Comments

  1. dampeoples

    Joined: Dec 1969

    0

    Join the crowd

    Everyone else is losing money, jobs and marketshare now too.

  1. mgpalma

    Joined: Dec 1969

    0

    re: Join the crowd

    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?

  1. TheSnarkmeister

    Joined: Dec 1969

    +3

    Those who do not remember

    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."

  1. repi8

    Joined: Dec 1969

    +1

    Burned?

    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.

  1. bigpoppa206

    Joined: Dec 1969

    +1

    But was this Apple...

    or AT & T?

  1. Guest

    Joined: Dec 1969

    +1

    Middlemen are disposable

    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).

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