Josh OngMorgan Stanley analyst Katy Huberty said in a note to investors Tuesday that the announcement of the Verizon CDMA iPhone 4 supports her already above consensus iPhone sales forecast of 72 million units in the 2011 calendar year. Wall Street consensus projects iPhone sales to reach 60-65 million this year.
Huberty is optimistic about sales of the Verizon iPhone, noting that proprietary Morgan Stanley surveys suggest the Verizon subscriber base could add 7-8 million iPhone users for a total of "10-11 million incremental shipments, including those who switch to Verizon."
"If near-term demand from Verizon customers isn’t noticeably impacted by the expected iPhone 5 launch in mid-2011, we expect our iPhone estimates to move higher over the next three months," Huberty wrote.
The analyst sees Apple's non-exclusive agreement with Verizon as a potential opportunity for T-Mobile or Sprint, though global CDMA carriers seem more likely.
"Apple’s multi-year, non-exclusive agreement with VZ opens up the possibility of Apple adding other carriers in the US including T-Mobile and Sprint. What’s more, we expect CDMA carrier announcements including China Telecom and Reliance in India over time."
Both carriers named are rumored to be in discussions with Apple over the iPhone. China Telecom, China's third largest wireless carrier, is reportedly already in talks with Apple. According to The Wall Street Journal, Reliance and rival Indian CDMA carrier Tata Teleservices have both been engaged in negotiations with Apple over a CDMA iPhone.
If Apple's new CDMA iPhone helps it to expand its reach in China and India, which are widely considered to be the two fastest growing mobile markets, the iPhone maker could make substantial profits. India has seen growth rates as high as 18 million new users a month in recent years. CDMA users in India make up roughly 20% of the country's more than 670 million subscribers.
According to analyst Brian White of Ticonderoga Securities, China is in the "early stages of catching 'Apple fever,'" as China Unicom struggles to keep up with demand for the iPhone 4.
Huberty views China as an "unappreciated" potential growth driver for Apple. Surveys show that mind share and brand loyalty for Apple are steadily increasing among Chinese consumers.
Noticeably missing from Huberty's short list of future CDMA carriers, however, is China Mobile, the world's largest wireless provider with over 570 million customers. Though the carrier has expressed interest in carrying the iPhone, China Mobile's proprietary homegrown 3G TD-SCDMA standard would require a custom version of the iPhone.
There have been vague reports of a "cooperation agreement" being reached between Apple and China Mobile, but it remains unclear whether China Mobile will carry the iPhone in the near future.
Andrew Orr
Wesley Hilliard
Malcolm Owen
Christine McKee
William Gallagher
21 Comments
AAPL has got to be the strangest growth stock ever...
This ginormous company seems to be growing like a startup just catching on! It hardly seems possible that Apple can keep growing at these rates, but then when you look at where they make their money there is room for significant growth in all but the iPod market. Just mind blowing...
I wonder what the potential actual market is for iPhone CDMA in the rest of the world. Surely Verizon is the largest single carrier when you consider subscriber number and customers able and willing to pay the smartphone and usage plan costs.
Note, if you pull up the list of CDMA subscribers you may want to remove the ones that are CDMA for ‘2G’ but have since focused completely on UMTS for ‘3G’. S. Korea is one of those countries. Only about 8 million (20% of their entire country’s subscriber base) could take advantage of the new iPhone, the other 33 million would benefit greater with the current iPhone.
It's not hard to imagine 72 million in demand but 72 million units produced in a single year. Wow.
If it's non-exclusive, the only carrier to turn it away will be T-Mobile because the Infineon Gold chipsets have an amazing ability to not work at 1900 or 1700MHz.
They power up in the BCCH when they shouldn't, they crosstalk into other timeslots, they don't accept power level commands and overall, remain incompatible. Every time an Infineon comes on the network, they drop 3 or 4 other customers.
If it's non-exclusive, the only carrier to turn it away will be T-Mobile because the Infineon Gold chipsets have an amazing ability to not work at 1900 or 1700MHz.
They power up in the BCCH when they shouldn't, they crosstalk into other timeslots, they don't accept power level commands and overall, remain incompatible. Every time an Infineon comes on the network, they drop 3 or 4 other customers.
UNLESS it's at 800MHz. Infineon chipsets work well at 850/800MHz
Other than that, they're crap and shouldn't be used in any serious application.