Analyst: iPhone Hack Warning Holds Little Impact

Apple let iPhone users know on Monday that hacking their combination iPod and smart phone for use outsie of AT&Tis;cell carrier service could ruin thier phone after the next firmware update. American Technolgy Research analyst Shaw Wu thinks that while the announcement may upset some people, the actual impact on iPhone owners will be minimal.

"While this announcement may cause some controversy and create headlines, we believe this impacts a small group of users, namely hackers, but we believe for the majority of users, the impact will be minimal, if any," Mr. Wu said.

He added that Apple likely had to take a strong stand with iPhone hackers to ensure that the iPhone remains a strong and stable platform, and also to meet contractual obligations with AT&T in the U.S., and O2, T-Mobile, and Orange in Europe.

Looking towards the future, Mr. Wu expects that Apple will eventually drop its exclusive deals and offer the iPhone through additional carriers. "Longer-term, we believe Apple will ultimately sign up multiple carriers within a country," he said. "In the near-term, the iPhone will likely remain an exclusive device given the newness and the extensive marketing and resources committed to it by Apple and its partners."

Mr. Wu is maintaining his "Buy" rating for Appleis stock and US$185 target price. Apple is currently trading at $149.37, up 1.09 (0.74%).

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