Comments on: Apple iPhone tested by WSJ, two days before launch http://www.gadgetroad.com/apple-iphone-tested-by-wsj-two-days-before-launch-522/ GadgetRoad is the place for wacky gadgets and complete geeky stuff. Latest cool gadgets and wacky devices candbe found here. Thu, 20 Nov 2008 09:13:15 +0000 http://wordpress.org/?v=2.6 By: Eric B http://www.gadgetroad.com/apple-iphone-tested-by-wsj-two-days-before-launch-522/#comment-743 Eric B Wed, 27 Jun 2007 13:56:21 +0000 http://www.gadgetroad.com/phone-and-pda/apple-iphone-tested-by-wsj-two-days-before-launch/2007/06/27/#comment-743 Judging by today’s selloff, I think potential customers are starting to realize how expensive the iPhone will be. If you sign the mid-range $99.99/mo service plan after purchasing the 8GB iPhone model, that alone will set you back $3000 during the two-year contract (without any accessories)! Here’s a few other potential hurdles that could prevent the iPhone from exceeding its already lofty expectations: * You must be an AT&T customer to use the iPhone. With a market share of 20%, that means 80% of wireless customers must cancel their current contracts to sign with AT&T. Being a Sprint customer, I would have to pay a $175 cancellation on top of the $3000 price tag for the iPhone. AT&T’s exclusive contract runs through 2009. * Only 4 & 8GB of hard drive space? My tiny video iPod holds 30 GB for less than $200. * Recent surveys have shown that the majority of IT departments will not even consider the iPhone due to its PC incompatibilities & exclusive AT&T contract. That will dampen business spending & all but eliminate demand for the higher-tier contracts. This is the ultimate “sell the news” scenario. On Jan 9th 2007, Steve Jobs announced the iPhone at the Macworld Conference & Expo. The stock has since been on fire rising 50% to $125, adding $30 billion to the company's market capitalization. Will the iPhone really hold that much value for Apple? This huge runup comes after a fantastic finish to 2006 after Apple’s stock bottomed out at $50 in October. Thus, nearly everyone holding Apple is sitting on huge gains. Expect an Apple selloff on Friday when the iPhone is finally released. 3 similar mini-selloffs have occurred during this recent runup: * June 26th: Apple announces 6 AT&T service plans for the iPhone. The stock drops 3% on investor concerns over the high prices. * June 11th: Steve Jobs shows off the iPhone at Apple’s World Wide Developer's Conference. The stock falls 5% after investors saw no “surprises”. * March 20th: Apple beats 4th quarter analyst earnings & revenue estimates. The stock falls on profit taking. Apple’s recent success has created impossible expectations. With all the mega-hype already priced into the stock, just meeting expectations will create a selloff. I plan to sell tomorrow and buy back in a couple months. Longer-term investors need not worry because the future looks bright with Macs gaining market share & the iPods continuing their dominant foothold on the music industry. Judging by today’s selloff, I think potential customers are starting to realize how expensive the iPhone will be. If you sign the mid-range $99.99/mo service plan after purchasing the 8GB iPhone model, that alone will set you back $3000 during the two-year contract (without any accessories)!

Here’s a few other potential hurdles that could prevent the iPhone from exceeding its already lofty expectations:

* You must be an AT&T customer to use the iPhone. With a market share of 20%, that means 80% of wireless customers must cancel their current contracts to sign with AT&T. Being a Sprint customer, I would have to pay a $175 cancellation on top of the $3000 price tag for the iPhone. AT&T’s exclusive contract runs through 2009.
* Only 4 & 8GB of hard drive space? My tiny video iPod holds 30 GB for less than $200.
* Recent surveys have shown that the majority of IT departments will not even consider the iPhone due to its PC incompatibilities & exclusive AT&T contract. That will dampen business spending & all but eliminate demand for the higher-tier contracts.

This is the ultimate “sell the news” scenario. On Jan 9th 2007, Steve Jobs announced the iPhone at the Macworld Conference & Expo. The stock has since been on fire rising 50% to $125, adding $30 billion to the company’s market capitalization. Will the iPhone really hold that much value for Apple? This huge runup comes after a fantastic finish to 2006 after Apple’s stock bottomed out at $50 in October. Thus, nearly everyone holding Apple is sitting on huge gains.

Expect an Apple selloff on Friday when the iPhone is finally released. 3 similar mini-selloffs have occurred during this recent runup:

* June 26th: Apple announces 6 AT&T service plans for the iPhone. The stock drops 3% on investor concerns over the high prices.
* June 11th: Steve Jobs shows off the iPhone at Apple’s World Wide Developer’s Conference. The stock falls 5% after investors saw no “surprises”.
* March 20th: Apple beats 4th quarter analyst earnings & revenue estimates. The stock falls on profit taking.

Apple’s recent success has created impossible expectations. With all the mega-hype already priced into the stock, just meeting expectations will create a selloff. I plan to sell tomorrow and buy back in a couple months. Longer-term investors need not worry because the future looks bright with Macs gaining market share & the iPods continuing their dominant foothold on the music industry.

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