iPhone 5 Launch: How Stupid Does Apple (NASDAQ: AAPL) Think We Are? T, S & VZ
Apple (NASDAQ: AAPL) along with carriers AT&T Inc (NYSE: T), Sprint Nextel Corporation (NYSE: S) and Verizon Communications Inc (NYSE: VZ) have plenty riding on the iPhone 5 launch.
By John Udovich
Sep 18, 2012 3:29:57 AM PDT
smallcapnetwork.com
On Friday, Apple (NASDAQ: AAPL) will launch its much hyped iPhone 5 with carriers AT&T Inc (NYSE: T), Sprint Nextel Corporation (NYSE: S)and Verizon Communications Inc (NYSE: VZ) (along with some Best Buy, RadioShack, Target and Walmart stores) and already everything is going according the the same choreographed script. You know the drill as in announcements that the Apple iPhone 5 have already been sold out in blockbuster pre-orders shattering all previous records and you can bet there will be long lines around the block on Friday. However, might that all be a slick marketing ploy to try and sell more iPhones and keep Apple (AAPL) stock on track to head higher? Moreover, how long can Apple (AAPL) keep that up before customers catch on and get pissed off?
To begin with, the Apple iPhone 5 is being launched in nine countries (including the United States, Australia, Canada, France, Germany, Hong Kong, Japan, Singapore and the UK) on Friday and there are plans to have it available in 100 countries by the end of the year. That makes this launch one of the most aggressive iPhone rollouts yet by Apple (AAPL) who will be charging $199 for the cheapest iPhone 5 for customers who sign up for a new two-year contract with their carriers.
However, some Apple observers are already questioning Apple’s (AAPL) iPhone 5 launch tactics. Specifically, Asher Moses, who is a technology editor for the Sydney Morning Herald down in Australia, recently quotedAustralian journalist and veteran Apple (AAPL) observer Matthew Powell as saying that Tim Cook (Apple’s CEO) "would have known exactly how many units were required and where they needed to be allocated.” After all, he is regarded as one of the smartest operations guys on the planet and from a marketing standpoint, Apple (AAPL) launches always contain two great stories: Sold out pre-orders and lines out the door and around the block on launch day (oh and have I forgotten to mention leaks, intentional or unintentional, ahead of any launch?).
Moses then quoted digital marketer Iain McDonald (the founder of digital marketing agency Amnesia that was previously owned by Microsoft) who noted that tactics being used by Apple (AAPL) have been used for years by nightclub owners. Moreover, Apple (AAPL) now finds itself in a position where it must have lines stretching out of their stores and around the block not just for an iPhone launch to be considered “successful” but also for the sales to keep rolling in after the launch is said and done.
On the other hand, Moses also quoted Anthony Agius, the founder of MacTalk.com.au, as saying there is a risk with Apple’s (AAPL) launch strategy in that they could just piss people off while the benefits of creating any fake demand are rather vague. Hence, he believes that the iPhone 5 sellouts have more to do with Apple (AAPL) being simply unable to keep up with demand.
Whatever the real story, Apple (AAPL) along with carriers AT&T Inc (T), Sprint Nextel Corporation (S) and Verizon Communications Inc (VZ) have plenty riding on a successful launch of the iPhone 5. However, I would hold off trading Apple (AAPL) stock until the iPhone 5 is in the hands of consumers who have also had a chance to review it over the coming weeks. And if the reviews are bad, anyone who bought Apple (AAPL) puts will quickly find themselves in the money with the only loss being the price of the puts should the new iPhone 5 turn out to be another hit. Likewise, AT&T Inc (T), Sprint Nextel Corporation (S) and Verizon Communications Inc (VZ) should also see some movement but not as much.
The Bottom Line. Keep an eye on Apple iPhone 5 carriers AT&T Inc (T), Sprint Nextel Corporation (S) and Verizon Communications Inc (VZ) but especially keep an eye on Apple (AAPL) stock because at some point (maybe not with this launch) they will stumble and the bears will be there waiting. |
