Wednesday, June 27, 2007

The iPhone. 60 Hours and Counting

iPhones go on sale Friday night at 6 pm--which you already know unless you've been living under a rock or have just recently miraculously emerged from a coma.

Lines have started queuing at all Apple Store locations--personally, *IF I decide to buy one, I'm going on-line to buy one (if you're watching CNN this morning, they've incorrectly reported that you cannot buy an iPhone online)--and of course, there are blogs about the wait.

David Clayman is third in line in Manhattan and planning to buy two-one to give to his dad and one to auction off for charity.

Greg Packer is first in line in Manhattan. MacWorld interviewed him. Money quote?

Though he’s committed himself to spending nearly five days living on the street for the iPhone, Packer said he’s not “computer literate” and doesn’t own an iPod. “I’m not really a technology person, but I’m doing the best I can to keep up with technology,” he said.

Then there are the guys who didn't have to wait in line or even pay for an iPhone:
David Pogue gives the iPhone a great review. (It's all relative. If you've read some of his other reviews.....) Steven Levy likes it, too, but he drank the Mac koolaid long ago. Ed Baig says more of the same.

Did you know that there isn't a single Apple store in the state of Maine?

*I'm conflicted. Because of security and company policy, there's NO way to receive my company's email on the iphone (except via webmail), so I'll still be required to carry the company issued Blackberry. I currently don't pay for a cell phone, the company pays my bill (my Blackberry is my cell phone). Why would I get an iPhone? Gadget envy is the only reason and I'm having a hard time reconciling gadget envy with a two year cell phone service contract.


Eric B said...

Judging by today’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’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’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 “sell the news” 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’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’s World Wide Developer's Conference. The stock falls 5% after investors saw no “surprises”.
* March 20th: Apple beats 4th quarter analyst earnings & revenue estimates. The stock falls on profit taking.

Apple’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.

weasel said...

"Did you know that there isn't a single Apple store in the state of Maine?" Such contempt the rest of the Union has for little old us. Nevermind Apple stores, I can't buy a French-cuff dress shirt in my town (I'm all set if I want Cahartt though). I do however have views of the Atlantic Ocean, a back forty which comprises rolling hills, farms, villages and lakes all the way to Burlington, VT, boat price lobster, and rent that is less than a friend of mine in Brooklyn pays for parking so I guess I'll take my retail lumps like a man. A man in a frayed french-cuff shirt.

I just wrapped up a 7 month economic development project (a regional pilot project of Leadership Maine) and one of the teams presented on cell- and broadband coverage in the state and the resulting map looked like Jennifer Lopez in that famous green dress- heavy at the bottom but barely holding it together at the top. But how do ya fix it without breakin' it, ayuh?