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 18th

Thu, 5:01 PM
Apple Awarding $5 million 'Innovation Grants' to Four HBCUs
Thu, 4:40 PM
Carrot's Idiot Maker Tried to Unbox Their Apple Design Award - It Didn't Go Well
Thu, 4:21 PM
Rep. Joe Morelle Introduces Right to Repair Legislation in House of Representatives
Thu, 4:15 PM
Netflix Takes Almost the Same Percentage of TV Usage as Apple TV+, HBO Max, Paramount+, Peacock and Discovery+ Combined
Thu, 2:48 PM
This Man Warned Apple About China Years Ago
Thu, 1:44 PM
Try Out The New Safari 15 Features With Safari Technology Preview
Thu, 1:18 PM
Apple Slashes Cost of AppleCare+ Plans for M1 MacBook Air and MacBook Pro
Thu, 1:06 PM
Thursdays with Bob: Gifts and WWDC Summary – TMO Daily Observations 2021-06-17
Thu, 12:59 PM
What Struck Dr. Mac at WWDC 2021...
Thu, 12:54 PM
Full RuneScape is Now Available for iPhone and iPad
Thu, 12:50 PM
'The Shrink Next Door' Premieres on Apple TV+ November 12
Thu, 12:43 PM
Hyper’s New USB-C HDMI Adapter Supports 8K at 60Hz
  • __________
  • Buy Stuff, Support TMO!
  • Podcast: Mac Geek Gab
  • Podcast: Daily Observations
  • TMO on Twitter!