USA Today reported that Apple Inc. (NASDAQ: AAPL) iPhone Users Shocked by Huge Bills, but the story is not the headline. The cost of the iPhone is high, both in its initial purchase and its monthly cost, but it is by no means shocking anyone. Most iPhone users love them. The only shocking thing is the lengthy, very detailed statements that on occasion run 50 pages or more!
In relation to customer expectations, it is the physical bill that is HUGE, not the cost. This will work itself out eventually. As is often the case, today's news, is tomorrow's bird cage liner.
My 18-year-old daughter still thinks the iPhone is the coolest, and she's very happy after pounding on it frequently over the past six weeks. She has also just returned from England (yes, dad spoils her), where she found it worked just fine and was able to call home with no trouble.
The iPhone is not for everyone. Among my business associates who have recently acquired phones, the Research In Motion (NASDAQ: RIMM) Blackberry Curve is much more popular. I'm still happy with my Motorola (NYSE: MOT) RAZR.
I no longer believe the speculation that Apple might exceed its projected 10 million unit sales. From what I have read, they are even pulling back on production a little to balance with demand. The iPhone will not improve revenue or profit for Apple to the extent that the iPod did, and while the iPod is still a big money maker, it too, is not the future of Apple. It is just one of the players (pun intended).
Apple has even bigger plans. The personal computer division with Macs and Notebooks continues to increase market share -- and there is plenty of room to grow. According to MacDailyNews, Apple Mac grabs 7.6% of the home computer market share. I think this figure could easily be double in five years or less. That will be a real revenue driver. Software and advertising will grow as well and contribute far more revenue than now accounted for.
So, Apple is still on a roll and the future seems bright. The stock is down with the overall market but I do not believe it is a value yet, closing yesterday at $124.03 and down further today. However, it may be fairly valued, which is different. I also do not agree with anyone who thinks Apple will be $200 in 12 months, as some have prophesied. One of our readers even wanted to bet me that it would be $175 per share, after I wrote it might reach somewhere between $150 and $160, 12 months out. In any event, I do think Apple will be higher next year than this year and increase its share of the cell phone, computer, software and advertising markets.
Those of you who are new to BloggingStocks can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well -- INCLUDING ANY BAD CALLS.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.
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Reader Comments (Page 1 of 1)
2-06-2008 @ 11:33AM
Jawad said...
"My 18-year-old daughter still thinks the iPhone is the coolest, and she's very happy after pounding on it frequently over the past six weeks. She has also just returned from England (yes, dad spoils her), where she found it worked just fine and was able to call home with no trouble."
... Better check that phone bill.
http://www.boingboing.net/2007/07/31/att_iphone_intl_roam.html
8-15-2007 @ 3:16PM
Sheldon L said...
Right on Jawad... I am afraid to look!
8-15-2007 @ 3:01PM
Mark said...
it is by no means shocking anyone.
8-15-2007 @ 9:06PM
Chris Tutor said...
That "report" that Apple is cutting back iPhone production was proved to be totally false.
http://www.iphonealley.com/news/iphone-numbers-still-on-target-root-of-rumors-found
I'm glad your daughter likes her iPhone, I certainly like mine and can't imagine going back to something with buttons.
8-16-2007 @ 1:52AM
Beltway Greg said...
Sheldon,
Why do you do these things to yourself? These aren't posts they're public personal flagilations. Anyway the bet to $175.00 is still on. If I'm correct you've got to write a column about my posts. Gotta love that Countrywide. I'll short it to death. Also, get yourself some APH. I'm all over the options for Apple for Oct. We'll see.
Beltway Greg
"I was born in a crossfire hurricane."
8-16-2007 @ 11:22AM
Sheldon L said...
If you are correct Greg I will be delighted to give you full credit and if it does not I hope you will extend the same.
BTW: I love that line also...
8-16-2007 @ 11:17AM
Sherri said...
I've had my iPhone since the release date, and at that time I didn't have any type of PDA, nor an iPod or any other MP3 player. My cellphone was due to be replaced because of age and wear and I held out specifically for the iPhone. With all these considerations the iPhone purchase price was a bargain! I have since received 2 AT&T bills, neither were unwieldy or contained anything unexpected. the monthly cost of my service has increased approximately $20, but for that I get "unlimited" data transfer and access to the net. All this talk of "expensive" I believe to be HOOEY! The iPhone and its capabilities are a total bargain!!