Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Apple Tankwatch -- Ignore unavailable to you. Want to Upgrade?

To: pyslent who wrote (18832)	4/11/2012 5:45:19 PM
From: sylvester80	Respond to of 32692

Because Android users are not suckers like iPhone users are. And yes, absolutely positively, they are suckers. And maybe you should be asking why the rest of the world are not suckers like Americans are...

To: pyslent who wrote (18832)	4/11/2012 5:56:04 PM
From: sylvester80	Respond to of 32692

BREAKING..Verizon Wireless to charge $30 fee for upgrades reuters.com Wed Apr 11, 2012 3:47pm EDT (Reuters) - Verizon Wireless will start charging customers a $30 fee for cellphone upgrades, on top of the price they pay for the new device, as the company looks to supplement its income to cover costs. The change at the biggest U.S. mobile provider follows a fourth-quarter decline in its wireless profit margins, which came under pressure from hefty subsidies it had to pay Apple Inc ( AAPL.O) for the popular iPhone. Carriers pay such subsidies because devices like the iPhone help to attract new customers and boost revenue. However, upgrades can be less attractive to operators because despite paying a subsidy for the new device, mobile companies often get no extra revenue from existing customers who switch phones. BTIG analyst Walter Piecyk said that the fees could add up to $1 billion a year and boost the Verizon Wireless profit margin by as much as 150 basis points. In the fourth quarter Verizon Wireless posted a profit margin of 42.2 percent. "The incremental fee by itself is hardly going to be enough to materially curtail upgrade activity but it is yet another step by a major operator to recoup the margin reducing impacts of phone upgrades," Piecyk said in a research note. Piecyk said his estimate assumes fees from 33 million Verizon Wireless phone sales to its existing customers. Verizon Wireless, a venture of Verizon Communications ( VZ.N) and Vodafone Group Plc ( VOD.L), said the fee, which comes into effect starting April 22, would help it "provide customers with the level of service and support they have come to expect". For example, it cited wireless workshops, online tools, and expert advice on devices. AT&T Inc ( T.N), the second biggest U.S. mobile service, said in January that it would tighten its upgrade policies this year to help reduce handset upgrade costs. Spokesman Mark Siegel said AT&T increased its device upgrade fee to $36 from $18 in February. It had charged $18 for upgrades without a price change for 10 years, Siegel said. AT&T has also reduced the number of upgrades it allows. Under its new policy AT&T only allows its customers to upgrade their phones after 20 months compared with previous allowance for upgrades as early as 13 months. Sprint Nextel ( S.N), the No 3. U.S. mobile service, also charges a $36 upgrade fee. Verizon shares were up 1.5 percent at $37.37 on the New York Stock Exchange on Wednesday. (Reporting by Sinead Carew; Editing by Dale Hudson and Tim Dobbyn)

To: pyslent who wrote (18832)	4/11/2012 6:01:42 PM
From: XoFruitCake	Read Replies (2) \| Respond to of 32692

Sure. And Apple can gouge as long as there are no substitute for their products. Why doesn't Samsung or HTC or Motorola have the same pricing power? I think this is the key to Apple against the Android and Window phone discussion. Just having the same hardware spec is not enough to derail the Iphone franchise at this point. All the window phone review I read talked about how well the interface work and how much it is like an Iphone with a cheaper price. But no one offer a real reason other than price to ditch an Iphone (some talk about the boring and familiar interface but that is about all I can get). For the high end market that Apple dominate now, customer can afford the phone so low price is not an overriding incentive (same for all the other high end Android phone Apple is in the driver seat and determine it's own future. If they can keep building Iphone that even the mid market consumer want to pay the extra and buy, we will continue to see iphone growth in the near future. How big a market share in any given year is going to be determined by the particular unique features that Apple can bring to the table at any given year. I think the natural high end smart phone market is about 30 to 35% of the overall smart phone market (i.e. folks just have money to burn in their pocket and willing to shop for the high end phone and low price won't be a determining factor. Corporate/government purchase go here.). And then there is another 30 to 35% of mid market consumer that is most like want to stay with low cost smart phone unless they see something irresistible and they will spring for the higher priced phone. Apple has about 23% of the WW smart phone market share in 4Q11. If they do well with 4S and Iphone 5, they should hit the 30-35% market share sometime next year. A market share grow from 23% to 35% with the smartphone market grow at may be 35% to 40% in 12 would mean a unit volume growth close to 100%. But in 13, if you think smart phone market will grow in the 20% and Apple market share grow from 35 to 45%, the unit volume growth will be "only" about 55%. And the $64,00 dollars question is what will happen to margin to achieve that growth when it push against the mid market (a irresistible feature or lower price?). 2012 looks to be the golden year for Apple. 2013 is going to be a transitional year that Apple will have to make some decision to whether to cut price to gain more market share or stay with the same market share and maintain the ungodly margin.