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Technology Stocks : Apple Inc.
AAPL 273.67+0.5%Dec 19 9:30 AM EST
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To: Road Walker who wrote (133839)5/18/2012 7:57:46 AM
From: slacker7111 Recommendation  Read Replies (1) of 213177
 
And if T and V act at the same time, there are not a lot of places that most people will go.

AT&T added 187,000 postpaid and 125,000 prepaid customers during Q1. They sold 4.3 million iPhones during the quarter.

Now assuming that Sprint leaves their pricing the same, you would only need to see 5% of iPhone purchasers moving to Sprint to see AT&T's postpaid growth go negative. A 10% change and their overall core subscriber growth goes negative (this doesnt count connected devices or resellers).

These networks are built with a certain number of subs needed to support the capex. The economics get ugly once you start to see negative sub growth.

I also think that Apple could launch the iPhone with any number of smaller competitors with the iPhone 5. T-Mobile will have a 3G compatible network by the end of the year and there are a number of flat-rate competitors like Leap and MetroPCS that would kill to sell the iPhone. Decreased subsidies would play right into those competitors hands as it would allow the economics of their flat rate plans to work.

Like I said earlier, I think the only way to decrease subsidies is to go whole hog. You need to decrease plan pricing to compensate for the increased upfront pricing and the only that works is you cut subsidies pretty drastically. A $100 increase in the upfront price and a subsequent $4 a month decrease in monthly costs isnt going to keep subs from moving to Sprint.

Slacker
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