Comments on: Iphone Video Review http://www.gadgetlounge.net/mobile-phone/iphone-video-review/ Digital Technology for Digital Living. Mon, 17 Jan 2011 10:18:58 +0000 hourly 1 http://wordpress.org/?v=3.0.4 By: Eric B http://www.gadgetlounge.net/mobile-phone/iphone-video-review/comment-page-1/#comment-24728 Eric B Wed, 27 Jun 2007 13:55:59 +0000 http://www.gadgetlounge.net/archives/2007/06/27/iphone-video-review/#comment-24728 Judging by today?¢‚Ǩ‚Ñ¢s selloff, I think potential customers are starting to realize how expensive the iPhone will be. If you sign the mid-range $99.99/mo service plan after purchasing the 8GB iPhone model, that alone will set you back $3000 during the two-year contract (without any accessories)! Here?¢‚Ǩ‚Ñ¢s a few other potential hurdles that could prevent the iPhone from exceeding its already lofty expectations: * You must be an AT&T customer to use the iPhone. With a market share of 20%, that means 80% of wireless customers must cancel their current contracts to sign with AT&T. Being a Sprint customer, I would have to pay a $175 cancellation on top of the $3000 price tag for the iPhone. AT&T?¢‚Ǩ‚Ñ¢s exclusive contract runs through 2009. * Only 4 & 8GB of hard drive space? My tiny video iPod holds 30 GB for less than $200. * Recent surveys have shown that the majority of IT departments will not even consider the iPhone due to its PC incompatibilities & exclusive AT&T contract. That will dampen business spending & all but eliminate demand for the higher-tier contracts. This is the ultimate ?¢‚Ǩ?ìsell the news?¢‚Ǩ¬ù scenario. On Jan 9th 2007, Steve Jobs announced the iPhone at the Macworld Conference & Expo. The stock has since been on fire rising 50% to $125, adding $30 billion to the company's market capitalization. Will the iPhone really hold that much value for Apple? This huge runup comes after a fantastic finish to 2006 after Apple?¢‚Ǩ‚Ñ¢s stock bottomed out at $50 in October. Thus, nearly everyone holding Apple is sitting on huge gains. Expect an Apple selloff on Friday when the iPhone is finally released. 3 similar mini-selloffs have occurred during this recent runup: * June 26th: Apple announces 6 AT&T service plans for the iPhone. The stock drops 3% on investor concerns over the high prices. * June 11th: Steve Jobs shows off the iPhone at Apple?¢‚Ǩ‚Ñ¢s World Wide Developer's Conference. The stock falls 5% after investors saw no ?¢‚Ǩ?ìsurprises?¢‚Ǩ¬ù. * March 20th: Apple beats 4th quarter analyst earnings & revenue estimates. The stock falls on profit taking. Apple?¢‚Ǩ‚Ñ¢s recent success has created impossible expectations. With all the mega-hype already priced into the stock, just meeting expectations will create a selloff. I plan to sell tomorrow and buy back in a couple months. Longer-term investors need not worry because the future looks bright with Macs gaining market share & the iPods continuing their dominant foothold on the music industry. Judging by today?¢‚Ǩ‚Ñ¢s selloff, I think potential customers are starting to realize how expensive the iPhone will be. If you sign the mid-range $99.99/mo service plan after purchasing the 8GB iPhone model, that alone will set you back $3000 during the two-year contract (without any accessories)!

Here?¢‚Ǩ‚Ñ¢s a few other potential hurdles that could prevent the iPhone from exceeding its already lofty expectations:

* You must be an AT&T customer to use the iPhone. With a market share of 20%, that means 80% of wireless customers must cancel their current contracts to sign with AT&T. Being a Sprint customer, I would have to pay a $175 cancellation on top of the $3000 price tag for the iPhone. AT&T?¢‚Ǩ‚Ñ¢s exclusive contract runs through 2009.
* Only 4 & 8GB of hard drive space? My tiny video iPod holds 30 GB for less than $200.
* Recent surveys have shown that the majority of IT departments will not even consider the iPhone due to its PC incompatibilities & exclusive AT&T contract. That will dampen business spending & all but eliminate demand for the higher-tier contracts.

This is the ultimate ?¢‚Ǩ?ìsell the news?¢‚Ǩ¬ù scenario. On Jan 9th 2007, Steve Jobs announced the iPhone at the Macworld Conference & Expo. The stock has since been on fire rising 50% to $125, adding $30 billion to the company’s market capitalization. Will the iPhone really hold that much value for Apple? This huge runup comes after a fantastic finish to 2006 after Apple?¢‚Ǩ‚Ñ¢s stock bottomed out at $50 in October. Thus, nearly everyone holding Apple is sitting on huge gains.

Expect an Apple selloff on Friday when the iPhone is finally released. 3 similar mini-selloffs have occurred during this recent runup:

* June 26th: Apple announces 6 AT&T service plans for the iPhone. The stock drops 3% on investor concerns over the high prices.
* June 11th: Steve Jobs shows off the iPhone at Apple?¢‚Ǩ‚Ñ¢s World Wide Developer’s Conference. The stock falls 5% after investors saw no ?¢‚Ǩ?ìsurprises?¢‚Ǩ¬ù.
* March 20th: Apple beats 4th quarter analyst earnings & revenue estimates. The stock falls on profit taking.

Apple?¢‚Ǩ‚Ñ¢s recent success has created impossible expectations. With all the mega-hype already priced into the stock, just meeting expectations will create a selloff. I plan to sell tomorrow and buy back in a couple months. Longer-term investors need not worry because the future looks bright with Macs gaining market share & the iPods continuing their dominant foothold on the music industry.

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