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Looks like Sprint is hopping onto the apple cart.
News Headlines
Sprint, Verizon, AT&T to Sell iPhone 5: Report
Published: Tuesday, 23 Aug 2011 | 3:48 PM ET
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By: CNBC.com with Reuters
Sprint Nextel will begin selling Apple's iPhone 5 in mid-October, people familiar with the matter told the Wall Street Journal.
Sprint [S 3.50 -0.09 (-2.51%) ] shares rose sharply on the news, which if confirmed, will close a huge gap in Sprint's line-up and give Apple [AAPL 371.93 -1.67 (-0.45%) ] another channel for selling its phone.
According to the report, Verizon Wireless [VZ 36.0499 0.0899 (+0.25%) ] and AT&T [T 29.07 0.09 (+0.31%) ] will begin selling the phone in mid-October as well.
Sprint also will carry the iPhone 4 at the same time, the source told the paper.
This a big win for Sprint, which had blamed a decline in subscribers to competition from Verizon and AT&T, which both were able to sell the popular phone.
However, there may be some concern about Apple's business as some had expected that the iPhone 5 would be released by the end of September, which would have put those sales in Apple's third quarter. Now, those expected sales will be shifted into the fourth quarter.
Separately, Apple is expected to release a cheaper iPhone 4 within weeks, which some suspect will jeopardize profit margins, but win lower-end customers from rivals such as Nokia [NOK 5.935 -0.175 (-2.86%) ] in China and other emerging markets.
Asian suppliers have begun making a lower-cost version of the hot-selling smartphone with a smaller 8-gigabyte flash drive, according to two sources with knowledge of the matter that spoke with Reuters.
Apple is in talks with leading Chinese carriers China Mobile [CHL 50.25 -0.82 (-1.61%) ] and China Telecom [CHA 61.98 0.48 (+0.78%) ] , both of which are eager to carry the device that defined the smartphone market when Apple launched it in 2007.
"A lower-priced version of iPhone 4 seems to be a necessary evil at this point in the iPhone adoption cycle, especially in emerging markets where the average income of individuals is much lower," said Channing Smith, co-manager of the Capital Advisors Growth Fund, which owns Apple shares.
Pat Becker, portfolio manager at Becker Capital Management, said Apple is looking to take a chunk of the market that is currently dominated by Finnish rival Nokia, which is widely expected to release a new phone running on Microsoft's [MSFT 24.5625 -0.1575 (-0.64%) ] Windows software as early as end of the year.
Nokia dominates the lower end, while Apple has so far focused only on the premium market.
"Your best defense is sometimes your offense," he said.
A cheaper phone risks cannibalizing Apple's premium iPhone model and pressuring margins, but the California company needs one to expand its emerging market share, analysts say.
The flash drive for the 8-GB iPhone 4 is being manufactured by a South Korean company, one of the sources said Tuesday, declining to name the company. Apple currently sources its flash drives from Japan's Toshiba and South Korea's Samsung Electronics.
Apple, which demands high levels of secrecy and security from suppliers and employees, would not comment. Samsung also declined comment.
The iPhone 4 was launched June 2010 in black 16-GB and 32-GB versions, with white versions added to the lineup in April. The 8-GB version is expected within weeks, the sources said.
"Apple may want to push into the emerging market segment, where customers want to switch to low- to mid-end smartphones from high-end feature phones, which usually cost $150 to $200," said Yuanta Securities analyst Bonnie Chang.
"But I think for an 8-GB iPhone 4, the price is hard to go below $200, so Apple will still need a completely new phone with low specifications for the emerging markets." An iPhone 4 without contract commitments now costs over $600.
-Reuters contributed to this report.
© 2011 CNBC.com
News Headlines
Sprint, Verizon, AT&T to Sell iPhone 5: Report
Published: Tuesday, 23 Aug 2011 | 3:48 PM ET
Text Size
By: CNBC.com with Reuters
Sprint Nextel will begin selling Apple's iPhone 5 in mid-October, people familiar with the matter told the Wall Street Journal.
Sprint [S 3.50 -0.09 (-2.51%) ] shares rose sharply on the news, which if confirmed, will close a huge gap in Sprint's line-up and give Apple [AAPL 371.93 -1.67 (-0.45%) ] another channel for selling its phone.
According to the report, Verizon Wireless [VZ 36.0499 0.0899 (+0.25%) ] and AT&T [T 29.07 0.09 (+0.31%) ] will begin selling the phone in mid-October as well.
Sprint also will carry the iPhone 4 at the same time, the source told the paper.
This a big win for Sprint, which had blamed a decline in subscribers to competition from Verizon and AT&T, which both were able to sell the popular phone.
However, there may be some concern about Apple's business as some had expected that the iPhone 5 would be released by the end of September, which would have put those sales in Apple's third quarter. Now, those expected sales will be shifted into the fourth quarter.
Separately, Apple is expected to release a cheaper iPhone 4 within weeks, which some suspect will jeopardize profit margins, but win lower-end customers from rivals such as Nokia [NOK 5.935 -0.175 (-2.86%) ] in China and other emerging markets.
Asian suppliers have begun making a lower-cost version of the hot-selling smartphone with a smaller 8-gigabyte flash drive, according to two sources with knowledge of the matter that spoke with Reuters.
Apple is in talks with leading Chinese carriers China Mobile [CHL 50.25 -0.82 (-1.61%) ] and China Telecom [CHA 61.98 0.48 (+0.78%) ] , both of which are eager to carry the device that defined the smartphone market when Apple launched it in 2007.
"A lower-priced version of iPhone 4 seems to be a necessary evil at this point in the iPhone adoption cycle, especially in emerging markets where the average income of individuals is much lower," said Channing Smith, co-manager of the Capital Advisors Growth Fund, which owns Apple shares.
Pat Becker, portfolio manager at Becker Capital Management, said Apple is looking to take a chunk of the market that is currently dominated by Finnish rival Nokia, which is widely expected to release a new phone running on Microsoft's [MSFT 24.5625 -0.1575 (-0.64%) ] Windows software as early as end of the year.
Nokia dominates the lower end, while Apple has so far focused only on the premium market.
"Your best defense is sometimes your offense," he said.
A cheaper phone risks cannibalizing Apple's premium iPhone model and pressuring margins, but the California company needs one to expand its emerging market share, analysts say.
The flash drive for the 8-GB iPhone 4 is being manufactured by a South Korean company, one of the sources said Tuesday, declining to name the company. Apple currently sources its flash drives from Japan's Toshiba and South Korea's Samsung Electronics.
Apple, which demands high levels of secrecy and security from suppliers and employees, would not comment. Samsung also declined comment.
The iPhone 4 was launched June 2010 in black 16-GB and 32-GB versions, with white versions added to the lineup in April. The 8-GB version is expected within weeks, the sources said.
"Apple may want to push into the emerging market segment, where customers want to switch to low- to mid-end smartphones from high-end feature phones, which usually cost $150 to $200," said Yuanta Securities analyst Bonnie Chang.
"But I think for an 8-GB iPhone 4, the price is hard to go below $200, so Apple will still need a completely new phone with low specifications for the emerging markets." An iPhone 4 without contract commitments now costs over $600.
-Reuters contributed to this report.
© 2011 CNBC.com
