Although much of the buzz about Apple surrounds the iPad, the venerable three-year-old iPhone has a great deal of life, one analyst argues. Indeed, if Apple takes this analyst’s suggestions, the handset’s market could increase seven-fold. Key factors are expanding carriers selling the iPhone and offering a phone that doesn’t require a data plan.
Bernstein Research analyst Toni Sacconaghi told investors Wednesday that it will become “increasingly difficult” for Apple to get beyond its current 39 percent of the global smart phone market without expanding the major carriers selling the iPhone. If Apple added 13 of the world’s largest carriers – such as Verizon Wireless, NTT DoDoMo and China Mobile – the Cupertino, Calif. company jump from selling 29 million phones worldwide in 2009 to 557 million, according to the analyst.
The analyst also suggests Apple introduce a phone that doesn’t require a data plan. “With prices at $99 now for the 3G iPhone, we believe incremental elasticity is likely to come from Apple offering phone devices that require less expensive monthly fees,” he said. Sacconaghi envisions the iPod touch bundled with a $40 voice plan attracting “the vast majority of the post-paid subscriber base” as well as a segment of the pre-paid market.
Offering a $40 voice plan would allow carrier subsidies, as well as permit Apple to sell the phone for $350 wholesale, resulting in 50 percent gross margins.
Along with the suggestions, the analyst also offered a warning that Apple has a year to a year-and-a-half to expand its handset market.
“Apple increasingly risks disappointing on investor expectations for iPhone unit sales if it is not able to secure additional incremental distribution and/or introduce lower priced offerings over the next 12 – 18 months,” he said.
[via Barron’s]
