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 November 15th

Sat, 9:27 PM
Apple AirPods Studio May Ship for Christmas, Leak Suggests
Fri, 6:00 PM
The Inside Story of Apple's M1 Chip
Fri, 4:07 PM
Storage (Disk Drive) Decision-Making
Fri, 3:59 PM
TourBox Controller for Creators on Mac and Windows: $149.99
Fri, 2:52 PM
How to Take a Screenshot on Your Apple Watch With watchOS 7 and iOS 14
Fri, 1:38 PM
Pixelmator Pro 2.0 Coming With M1 Mac Support and Redesign
Fri, 1:33 PM
Security Friday and Big Sur Updates – TMO Daily Observations 2020-11-13
Fri, 1:21 PM
Apple Releases Official Teaser For Series Two of 'Servant' on Apple TV+
Fri, 1:00 PM
Was Your Mac Slow on Thursday? Apple's OCSP Server Was Likely the Cause
Fri, 12:42 PM
Cartoon 'Doug Unplugs' Now on Apple TV+
Fri, 11:25 AM
Facebook Credit Card Scam Exposed via Data Leak
Fri, 10:40 AM
Vertafore Data Breach Affects 27.7 Million Texan Drivers
  • __________
  • Buy Stuff, Support TMO!
  • Podcast: Mac Geek Gab
  • Podcast: Daily Observations
  • TMO on Twitter!