The Mac Observer

Skip navigational links

You're viewing an article in TMO's historic archive vault. Here, we've preserved the comments and how the site looked along with the article. Use this link to view the article on our current site:
Analyst: iPhone Revenue Sharing to Boost Apple EPS

Analyst: iPhone Revenue Sharing to Boost Apple EPS

by , 8:25 AM EDT, July 19th, 2007

Piper Jaffray analyst Gene Munster believes Apple and AT&T have a revenue sharing agreement for the iPhone, and that it will prove to be a plus for Apple's bottom line. He estimates that as part of the deal, AT&T is paying Apple US$3 per month for its customers that change handsets to use an iPhone, and $11 a month for iPhone customers switching from another carrier.

That agreement could prove to be lucrative for Apple since the deal covers the 24 month life of each iPhone user's contract.

"Due to the unique terms of iPhone sales and pricing, we believe AT&T has agreed to a revenue sharing plan with Apple," Mr. Munster said. "And while we do not know the exact details of the agreement, we conservatively estimate that AT&T gives Apple $3 per month (over the life of the 24 month contract) for every iPhone customer already with AT&T and $11 per month for every new subscriber."

While the deal would add only about $0.02 to Apple's EPS for 2007, it could have a much larger impact in 2008 and 2009. He estimates that it could add $0.15 to the company's EPS in 2008, and $0.58 in 2009.

Mr. Munster is maintaining his "Outperform" rating and $160 target price for Apple's stock. Apple is currently trading in the pre-market at $140, up 1.88 (1.36%).


If you are interested in Apple's stock, join our forum members in the Apple Finance Boards, a moderated forum for Apple Investors and people who are interested in Apple's financial dealings. For other stories regarding Apple's stock activity, visit our updated Apple Stock Watch Special Report.

  

Recent Headlines - Updated July 27th

Mon,12:40 PM
Three Ways to Protect your Apple Watch (and One Way Not To)
Mon,10:42 PM
Google Brings Higher Resolution Satellite Imagery to Google Earth and Maps
9:10 PM
Google Bloks Will Offer Kids Hands-On, Collaborative Programming Concepts
8:44 PM
PRE-SALE: The Complete iOS 10 Developer Course at $29
5:15 PM
Game Foul: Ford Dealership Steals Firewatch Art
5:04 PM
TMO Background Mode: Interview With Symply Co-founder and President Alex Grossman
3:20 PM
iPhone 7 Sans Headphone Jack: The Debate Continues
1:58 PM
TMO Daily Observations 2016-06-27: AAPL, Brexit, Google Blocks
11:58 AM
Google Ready to Try Apple’s Tactics with New Smartphone
9:33 AM
Apple gets its Rainbow on for SF Pride Parade
Sun,12:18 PM
MGG 611: Troubleshoot & Resolve Your Mac & Apple Issues
Fri,7:00 PM
Apple Kills the Thunderbolt Display - Will the Mac Pro Be Next?
  • __________
  • Buy Stuff, Support TMO!
  • Podcast: Mac Geek Gab
  • Podcast: Apple Weekly Report
  • TMO on Twitter!