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Piper: 1 in 10 iPhones to be pre-paid

updated 10:10 am EDT, Mon June 23, 2008

Piper on pre-paid iPhones

The likelihood of pre-paid iPhone sales outside North America may hurt the device's ultimate growth potential, write analysts with Piper Jaffray. While the majority of iPhones will be subsidized down to about $200, Piper notes, some 53 percent of potential buyers will likely have to pick a pre-paid phone, costing as much as or more than $600. In such regions demand could be limited, eating into previous unit estimates, investors are said to be worrying.

Piper is nevertheless defending its prediction of 12.9 million iPhone shipments in CY08, and another 45 million in CY09. This is based on Gartner's estimate that Apple holds 20 percent of the North American smartphone market, and 5 percent globally. Piper argues that if the CY09 smartphone market includes 270 million units, Apple can reach the 45 million mark by obtaining a 17 percent marketshare.






by MacNN Staff

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  1. testudo

    Joined: Dec 1969

    +2

    why?

    Why does one "have" to pick one pre-paid?

  1. lockhartt

    Joined: Dec 1969

    +3

    i'm confused

    The iPhone has a particular target demographic... a demographic that can justify the cost of the phone and associated carrier plan over a two-year period. Whether that amount is paid via a front-loaded structure (i.e. large phone cost plus smaller, or prepaid, minimum monthly cost) or more gradually (through a subsidized phone and larger minimum monthly costs) doesn't really matter. It's been sufficiently demonstrated at this point that the cost of owning and using the phone over two years is pretty even regardless of how the money is paid, so what's the point here? That there are people who can't afford the iPhone, and that this limits the potential customer base? Genius I say...

  1. bobolicious

    Joined: Dec 1969

    +1

    options = sales

    ...forcing customers' hand would seem to merely limit potential market share - low usage buyers may be happy to pay now vs later & vice versa...

    Some may find simply having good address book compatibility & convergence uses compelling even with limited phone needs...

  1. Eldernorm

    Joined: Dec 1969

    -2

    "investors"???

    I do not know, but lately, when these people talk about "investors", they are usually talking about stupid people, so its like saying "stupid investors" vs just investors.

    Just a thought.

    en

  1. nickbirch

    Joined: Dec 1969

    +1

    hand me down

    I expect a large fraction of the first generation iPhones will end up on PAYG when their owners upgrade to 3G iPhones and donate the older phones to friends and family.

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