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What Icahn Knows About the New iPhone: Channel Control

While Apple spent years going from carrier-to-carrier, all around the world, the new phones will also launch with nearly all the world's carriers simultaneously. The prices quoted are first-day retail prices. It's nearly certain that by Christmas you'll be able to get one of these phones from a carrier "free."

But a "free" phone from a carrier is not a free phone. As my daughter Robin and I learned on a recent trip to Europe, you can't buy a third-party SIM card for a locked phone and just put it in. There are ways to unlock the phone with technical knowledge, but that breaks the warranty. When the average consumer asks about unlocking their phone, the answer is just no.

We got along fine, but my daughter's iPhone became a camera and alarm clock. For service, we relied on my unlocked Nexus 4, which I bought directly from Google last Christmas for $349.

Christmas is another key term. Christmas is when most people go phone shopping. Chanukah, Kwanzaa, Chinese New Year, and Diwali all fall within the sales period.

These "free" phones are going to hit around Christmas. Consumers won't be paying for them until they get locked into contracts, next summer. While Apple and the carriers have also put in policies designed to allow faster upgrades, that doesn't mean you're being unlocked from your carrier -- just the opposite.

By giving carriers their best deal ever, and by having its phones in every retail outlet around, Apple assures itself a dominant market share this fall. It's going to be harder for Samsung and Motorola and LG and HTC and even Google to reach consumers than it was before, through the channel, because the channel is getting the best possible deal from Apple.

Also note that no manufacturer is better at monetizing the data traffic from its phones than Apple. An iPhone user still buys more paid-for apps than an Android user, and Apple gets a fat cut of all that business.

That's what has Carl Icahn excited, and that will likely propel Apple to the top of its trading range by January, or beyond. At $468 he's getting stock with a price/earnings multiple under 12, a 2.61% yield, and an ongoing buyback program that will keep dropping the float from its current level of 908 million shares.

We're not even talking about whatever other new products might be rolled out in the coming weeks or months.

When everyone is stocking Apple, Apple stock becomes a buy.

At the time of publication, the author owned 80 shares of AAPL.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Dana Blankenhorn has been a business journalist since 1978, and a tech reporter since 1982. His specialty has been getting to the future ahead of the crowd, then leaving before success arrived. That meant covering the Internet in 1985, e-commerce in 1994, the Internet of Things in 2005, open source in 2005 and, since 2010, renewable energy. He has written for every medium from newspapers and magazines to Web sites, from books to blogs. He still seeks tomorrow from his Craftsman home in Atlanta.
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