This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Apple's iPhone Elixir: Cut Prices

"The 4 million phones sold in the first six months is also double the initial run rate of the Motorola (MOT) Razr," says Abramsky. "From our perspective, the early performance of the iPhone is nothing short of remarkable relative to other historic phone launches."

Analysts and investors also have been concerned about the difference between the number of iPhones sold by Apple and the devices activations registered by AT&T.

In its fourth-quarter earnings, AT&T indicated that about 2 million iPhones had been registered for the service on the company's network while Apple sold about 3.7 million iPhones during that quarter.

The difference of 1.7 million phones could indicate some excess inventory in the channel, which could come back to bite Apple's target of 10 million for the year and stoke fears of lower-than-anticipated demand for the phones.

Apple has not commented about the unlocked phones yet, and the company did not respond to a request for comment for this story.

Apple could have sold about 400,000 phones in Europe during the quarter, and about 20% have been sold unlocked, estimates Keith Bachman, an analyst with BMO Capital. In the U.S., about 25% of the phones sold could be unlocked.

The rest are likely to still be in inventory, while some will be returned and a small percentage are being used for nonphone features, such as iPod touches, until the owners can switch their wireless contracts to AT&T, says Gottheil.

The high percentage of unlocked iPhones should not deter investors, says Abramsky. "It's a leading indicator of the demand," he says.

As Apple signs up contracts with carriers in countries such as Canada, Italy, Spain, and Australia, Apple could bring more users into the fold, he says.

Meanwhile, U.K. mobile company O2 is doing its part to make the iPhone more attractive to its customers, in what some see as an attempt to revive flagging sales. The company said that while the cost of the iPhone remains unchanged, it will give three times as many free calls and text messages on its £35 ($69)-a-month service plan for iPhone customers.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $113.29 0.00%
NOK $6.32 0.00%
T $33.29 0.00%
FB $91.01 0.00%
GOOG $630.38 0.00%

Markets

Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs