Barclays on U.S. Wireless Equipment: Subsidies - Little Pressure as Apple (AAPL) Outflanks
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Rating Summary:
52 Buy, 12 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
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Barclays on U.S. Wireless Equipment: Subsidies - Little Pressure, Apple Outflanks
Analyst Jeff Kvaal, said, Despite carrier rhetoric, we expect minimal handset subsidy pressure in developed markets in the near term: In conjunction with our European and US carrier colleagues, we find the theoretical pressure for carriers to lower subsidies, particularly to Apple, to be rising. However, we consider initial efforts only tentative and thus retain our smartphone growth estimates. In the near term, we expect Apple (Nasdaq: AAPL) to diversify away from subsidies with an aggressive move into open distribution."
"Our checks indicate that Apple's deals with prepaid players (Sprint's Virgin Media (NYSE: S) and Cricket) is likely only the beginning of Apple's efforts to expand via partnerships into the open distribution and prepaid markets in the US and internationally. The mid-tier smartphone market has been the fastest growing niche of the smartphone market in recent quarters."
So, bottom-line, Apple will move aggressively beyond carrier directed channels and could add 30-35mn devices.
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Analyst Jeff Kvaal, said, Despite carrier rhetoric, we expect minimal handset subsidy pressure in developed markets in the near term: In conjunction with our European and US carrier colleagues, we find the theoretical pressure for carriers to lower subsidies, particularly to Apple, to be rising. However, we consider initial efforts only tentative and thus retain our smartphone growth estimates. In the near term, we expect Apple (Nasdaq: AAPL) to diversify away from subsidies with an aggressive move into open distribution."
"Our checks indicate that Apple's deals with prepaid players (Sprint's Virgin Media (NYSE: S) and Cricket) is likely only the beginning of Apple's efforts to expand via partnerships into the open distribution and prepaid markets in the US and internationally. The mid-tier smartphone market has been the fastest growing niche of the smartphone market in recent quarters."
So, bottom-line, Apple will move aggressively beyond carrier directed channels and could add 30-35mn devices.
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