This Day On The Street
Continue to site right-arrow
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
TheStreet Open House

Telcos Hold Key to Apple Tablet Sales

Stocks in this article: AAPL AMZN VZ T

NEW YORK ( TheStreet) -- Apple's (AAPL - Get Report) Tablet prospects hinge on phone company charges.

In a research note Wednesday, Macquarie analyst Phil Cusick estimates that the Apple Tablet will sell for about $800 and boost the company's profit 5% next year. That projection calls for 3 to 5 million Tablets to be sold, adding $559 million to the bottom line.

But stiff data service charges by telcos like Verizon (VZ - Get Report) or AT&T (T - Get Report) could cool consumer desire for Apple's hotly anticipated touchscreen device, also known as the iPad or iSlate.

Rendering of a tablet device

"As beautiful as an Apple Tablet may be, the functionality will be driven or limited by the wireless connectivity," Cusick writes in his note.

If the Apple Tablet turns out to be an e-reader like the Amazon (AMZN - Get Report) Kindle, then monthly network connection charges would likely be around $6. But if the Tablet promises to be a full-featured media player -- a portable HD-TV, if you will -- service fees could run as high as $60 a month, Cusick writes.

Apple has been struggling to find the right sales approach for its Tablet. Apple and Verizon have discussed a plan to offer the device on a non-exclusive basis with Verizon subsidizing part of the buyer's cost. The heftier the subsidy, the more Verizon will charge for the data service plan.

The ideal price plan for the Tablet, according to Cusick, would be $700 for the device and about $25 a month for the data plan. But Cusick suggests that Apple will have to defer to the carriers on service prices, allowing for the possibility of tiered pricing based on different levels of data capacity, from light users to heavy users.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link 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

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs