Apple (AAPL) Lower Even After Positive AmTech Note
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Apple (Nasdaq: AAPL) is down nearly 1% even after a positive note from American Technology Research today. Some are attributing the drop to reports of a possible iPhone delay. According to a posting at SmarthouseNews, "Insiders at the Company manufacturing the Apple iPhone claim that quality problems are causing concern to the extent that the phone may be delayed past June 11th 2007." Link
Last week, Apple said iPhone is on schedule to ship in late June as planned and said they were pulling resources from their Mac OS X team to meet the launch, which delayed the release of the Leopard operating system.
This morning, American Technology Research analyst Shaw Wu raised his price target on Apple to $145 and added the stock to their Focus List. Wu said AT&T could offer rebates of $50 to $150 on iPhone when it goes on sale. He also said Apple could be paid a "bounty" on iPhone sales at their stores and said Vodafone could be the iPhone's European carrier.
In his note to clients Wu said, "In our recent analysis, we picked up three key iPhone developments that we believe will have a material positive impact on our forward assumptions. As a result, we are raising our estimates (above consensus) and price target and adding AAPL to our AmTech Focus List: 1) our sources indicate that a rebate or carrier subsidy for iPhone of $50-150 is under serious consideration. From AT&T's perspective, a rebate is a great marketing tool to entice a customer to sign up for 2-year voice and data plans that cost $75-100 per month, meaning $1800-2400 in "guaranteed" bi-annual revenue; 2) we believe AAPL will be paid a "bounty" for each customer signed up through its stores. In addition, AAPL will likely participate in a revenue sharing agreement where it collects a recurring monthly fee. We estimate mid- to high single-digit high margin revenue per user; and 3) our sources indicate that Vodafone is most likely iPhone's European carrier partner."
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