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 TMO Headlines - Updated June 28th

Mon, 4:18 PM
How Apple Watch Mirroring Works on iOS 16
Mon, 3:33 PM
Apple Suppliers Begin Shipping iPhone 14 Components
Mon, 3:29 PM
Tesla CarPlay Workaround Update Now Offers Support for All Tesla Models
Mon, 2:39 PM
Trailer for Apple TV+ San Fransisco-Thriller 'Surface' Goes Live
Mon, 1:58 PM
Lock Screen Widgets on iOS 16 Offer Preview of What an Always-On iPhone 14 Can Do
Mon, 1:52 PM
YouTube Tear-Down Shows Why New Base Model 13-Inch MacBook May Have Slower SSD Speeds
Mon, 12:48 PM
Gurman Predicts New Original-Style HomePod, Apple TV Sees Upgrades
Mon, 8:44 AM
Gurman: Apple to Release Watch Series 8, SE, and a Ruggedized Variant for Extreme Sports
Mon, 8:02 AM
Apple Plans to Release Four M2 Macs, Gurman Says, As Work on the M3 Chip Begins
Sun, 3:12 PM
For New Apple Store Workers Union in Towson, Maryland, the Journey Has Only Begun
Fri, 5:06 PM
’Obi-Wan Kenobi’ Star Moses Ingram to Join Cast of Apple TV+ Series ‘Lady in the Lake’
Fri, 4:31 PM
Chris Evans Stuns the Internet By Upgrading His iPhone 6
  • __________
  • Buy Stuff, Support TMO!
  • Podcast: Mac Geek Gab
  • Podcast: Daily Observations
  • TMO on Twitter!