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: 25% of iPhone Buyers are Switchers

Analyst: 25% of iPhone Buyers are Switchers

by , 12:10 PM EDT, July 13th, 2007

Apple's iPhone has proven to be a popular choice over the two weeks since its launch, and AT&T competitors are watching closely. American Technology Research analyst Shaw Wu estimated that about 25 percent of iPhone buyers are switching from other carriers to get their hands on Apple's combination iPod and smartphone.

"Our sources indicate that around 25 percent of iPhone-AT&T customers are 'switchers' from other carriers," he said. "We find these numbers impressive showing that a fair amount of customers are willing to pay high early cancellation fees (between US$125 and $200) to get out of their existing service contracts for an iPhone."

The figures suggest that cell phone customers are dropping their carriers and switching to AT&T because the company has an exclusive deal as the only service provider for the iPhone in the United States.

Mr. Wu added "The only other product we are aware of in recent history that commanded a similar type of respect (at least in the beginning) was the Motorola RAZR in mid to late 2004, priced at $500 with a service contract and $800 without."

In comparison, the iPhone costs $499 for a 4GB model, or $599 for an 8GB model.

Mr. Wu is also predicting that Apple will bring smartphones out of the realm of business users and into the consumer mainstream within two to three years by offering additional iPhone models that fall in the mid and entry-level.

The iPhone popularity means that Apple is now in a stronger position to negotiate deals with cell carriers in Europe, and may end up signing deals with multiple carriers that focus on specific regions or countries. Those deals will likely be on Apple's terms. "Regardless of which companies get picked for iPhone rights in Europe, we believe Apple is in a strong position to end up with favorable terms similar to what it was able to get from AT&T," he said.

Mr. Wu is maintaining his "Buy" rating and $165 target price for Apple's stock. Apple is currently trading at $135.21, up 1.14 (0.85%).


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 TMO Headlines - Updated May 22nd

Mon, 11:48 AM
Nike Unveils VaporMax Flyknit Apple Watch Bands
Mon, 10:30 AM
RSA Sues Apple Claiming Apple Pay Patent Infringement
Sun, 12:03 PM
Fixing Album Art, Cracked iPads, and UPnP Dangers – Mac Geek Gab 658
Fri, 6:58 PM
Data Forensics Company Recovers Notes Data Apple Claims is Deleted
Fri, 6:18 PM
A Stellar Concept Video for iOS 11 and the Rebirth of the Mac
Fri, 5:54 PM
Stevie Wonder Plays Apple's Beer Bash, Here's Tim Cook's Tweet
Fri, 5:36 PM
Dr. Mac Says He Can Save You an Hour a Day for Life (for Free)
Fri, 5:10 PM
How to shoot with zoom on iPhone 7 Plus (Apple Video)
Fri, 4:52 PM
How to shoot a one-handed selfie on iPhone 7 (Apple Video)
Fri, 3:50 PM
Dude Makes $70 Hackintosh, and It Worked (Video)
Fri, 2:24 PM
NFC on iPhone Can Be Unlocked, but Should You Care?
Fri, 1:43 PM
Trusting Siri, Apple's Diabetes Wristband - TMO Daily Observations 2017-05-19
  • __________
  • Buy Stuff, Support TMO!
  • Podcast: Mac Geek Gab
  • Podcast: Apple Weekly Report
  • TMO on Twitter!