Major Carriers Souring On iPhone; Apple Found Guilty Of Price Fixing

[jpeyton]

First, news out of Russia that their largest mobile carrier has dropped the iPhone in favor of Windows Phone:

http://www.bloomberg.com/news/2013-...artphones-as-apple-iphone-ebbs-in-russia.html

“Apple wants operators to pay them huge money, subsidizing iPhones and their promotion in Russia,” Chief Executive Officer Andrei Dubovskov said in an interview in St. Petersburg. “Now it’s not beneficial for us. It’s good we stopped selling the iPhone as these sales would’ve brought us a negative margin.”

And now, news that Verizon (the largest domestic mobile carrier) has grossly overestimated the popularity of the iPhone when they signed their commitment with Apple in 2010. They might be on the hook for $14 billion in iPhones:

http://www.bloomberg.com/news/2013-07-10/verizon-seen-owing-apple-up-to-14-billion-for-iphones.html

The report suggests sluggish demand for the iPhone, which accounts for about half of Apple’s sales. Other wireless providers around the world may be experiencing iPhone sales deficits as well, Moffett said. The sales shortfall bolsters analysts’ projection for Apple to report a 22 percent decline in net income to $6.87 billion in the third fiscal quarter, according to the average of estimates compiled by Bloomberg.

And finally, a verdict we all knew was coming, a federal judge has found Apple guilty of eBook price fixing:

http://www.theverge.com/2013/7/10/4510338/apple-found-guilty-of-ebook-price-fixing

After a trial and several settlements with other publishers, a federal judge has ruled that Apple conspired to raise the price of ebooks from major publishers, and a hearing for damages will be held later. Apple was originally accused of price fixing in 2012, along with five of the six major publishers. Several publishers quickly caved, and all had agreed to settlements by early 2013, leaving Apple the only company facing a trial. Now, Judge Denise Cote has found that "the Plaintiffs have shown not just by a preponderance of the evidence but through compelling direct and circumstantial evidence that Apple participated in and facilitated a horizontal price-fixing conspiracy."

 

[AstroManLuca]

There should be a semicolon in the title so it's less misleading. By having a comma, you imply that Apple was found guilty of price fixing the iPhone.

 

[luv2liv]

karma. it just works!

 

[Crono]

There should be a semicolon in the title so it's less misleading. By having a comma, you imply that Apple was found guilty of price fixing the iPhone.

Agreed, that was my iniital impression, as well.

Them being found guilty of price fixing in the ebook market was pretty much a given at this point, but if they were found guilty of price fixing with the iPhone, that would have been unusual and surprising.

 

[Dari]

The screen is too damn small and the home screen has not change since the original iPhone. Add the fact that a lot of the innovation is in Android and Apple was bound to fall.

 

[Suspicious-Teach8788]

Oh no. Carriers committed too much money. Whose fault is that? Too bad Verizon and Sprint committed a lot of money upfront for the iPhone.

 

[Anubis]

Oh no. Carriers committed too much money. Whose fault is that? Too bad Verizon and Sprint committed a lot of money upfront for the iPhone.

yea as fun as it is to poke fun at apple that is not their fault im not sure how many iphones VZW thought they were going to sell but 14 billion is not chump change .

however the book price fixing thing was. and they rightfully lost and were found guilty

 

[AstroManLuca]

Oh no. Carriers committed too much money. Whose fault is that? Too bad Verizon and Sprint committed a lot of money upfront for the iPhone.

Yeah no kidding. You'd think they'd be able to look at sales trends for the couple years leading up to the iPhone and see how quickly Android was catching up.

 

[Brian Stirling]

yea as fun as it is to poke fun at apple that is not their fault im not sure how many iphones VZW thought they were going to sell but 14 billion is not chump change .

however the book price fixing thing was. and they rightfully lost and were found guilty

We are talking 15B dollars not 14B units -- right?

Either way they overestimated Apples appeal.

But, it looks like the industry as a whole is seeing some contraction in growth if not outright contraction in sales.

Wonder what Apples stock will be at in a month...


Brian

 

[Ravynmagi]

Geez, if Verizon overestimated it's iPhone sales, I wonder what position Sprint is in. Didn't they sign some crazy $20 billion deal to get the iPhone?

 

[randomrogue]

As an aside I've seen a drastic shift on the metro from nearly everyone with an iphone to a lot more android based phones (and those few blackberries). Most of my friends weren't pleased about the change in the charger. You wouldn't think it would be that big a deal but it was. I highly doubt most people give a shit about the actual phones and screen size. It's the charger that pissed them off lol.

 

[Ravynmagi]

As an aside I've seen a drastic shift on the metro from nearly everyone with an iphone to a lot more android based phones (and those few blackberries). Most of my friends weren't pleased about the change in the charger. You wouldn't think it would be that big a deal but it was. I highly doubt most people give a shit about the actual phones and screen size. It's the charger that pissed them off lol.

I think the new charger connector is just a short term issue. People have probably gotten over that by now. I imagine they were just upset with all the accessories that had not working.


I think iPhone is still selling really good. I just thing carriers got a bit crazy with their expectations. I think I read that 60% or more of AT&T phones sold are iPhone, so it seems to be the majority of phones sold at AT&T. AT&T got all the early Apple fans. With Verizon I hear it's a much lower percentage, 30% or something in that area. I guess Verizon was expecting more of it's customers to switch to iPhone too and they'd also be selling 60% iPhones maybe, which was probably unrealistic.

 

[Anonemous]

Geez, if Verizon overestimated it's iPhone sales, I wonder what position Sprint is in. Didn't they sign some crazy $20 billion deal to get the iPhone?

from the article linked

Sprint Nextel Corp. (S), which began selling iPhones in 2011, will probably be able to meet its commitment to buy $15.5 billion worth of iPhones over four years “barring any hiccup in Sprint’s rate of handset sales or the popularity of the iPhone,” Moffett said.

 

[Ravynmagi]

Good for them. Would suck if Apple single handedly killed one of the major US carriers.

 

[cronos]

As an aside I've seen a drastic shift on the metro from nearly everyone with an iphone to a lot more android based phones (and those few blackberries). Most of my friends weren't pleased about the change in the charger. You wouldn't think it would be that big a deal but it was. I highly doubt most people give a shit about the actual phones and screen size. It's the charger that pissed them off lol.

I thought I noticed the same thing last year but it turns out that these things are seasonal. Summer months belong to Android. Why don't you look again later in October, they're all iPhones

 

[Ravynmagi]

I thought I noticed the same thing last year but it turns out that these things are seasonal. Summer months belong to Android. Why don't you look again later in October, they're all iPhones

I'm the same way. I buy my iPhone in the fall, ebay it and buy a Windows Phone for the winter. Then for spring it's Blackberry time, and finally nothing says summer like Android.

 

[randomrogue]

Yeah when it's winter I tend to see people bringing out the old bricks since they can't use smart phones with gloves on. They have these giant phones with giant buttons. Totally makes sense. During the summer everyone has Android and Fall and Spring are definitely iphone season. These jackasses with Blackberries during the winter crack me up. We all make fun of them.

 

[MrX8503]

I feel like we hear Apple's doom every few months for the past 5 years. They'll be fine.

 

[lothar]

Oh no. Carriers committed too much money. Whose fault is that? Too bad Verizon and Sprint committed a lot of money upfront for the iPhone.

This.

I don't have any remorse for the carriers signing such a foolish contract with Apple.
Thank God for T-Mobile.

 

[RampantAndroid]

It's Verizon's own fault. You can't walk into a VZW store without a rep trying to shove an Android device (or three) down your throat.

 

[WelshBloke]

I feel like we hear Apple's doom every few months for the past 5 years. They'll be fine.

It seems like every huge technology firm is doomed if you listen to forums. Apple, Microsoft, Google, Samsung, Nokia, Blackberry (actually those last two might be) all doomed by forum experts.

 

[cronos]

I feel like we hear Apple's doom every few months for the past 5 years. They'll be fine.

Stop making things up. Steve Jobs died October 2011.

 

[WelshBloke]

Stop making things up. Steve Jobs died October 2011.

He died for our sins. Praise Jobsus.

(really not sure what you were going for in your post)

 

[poofyhairguy]

Verizon built up Droid and it back fires.

 

[cronos]

He died for our sins. Praise Jobsus.

(really not sure what you were going for in your post)

There were always Apple haters who talked crap about Apple products, but we didn't hear 'Apple's down' every few months until after Steve Jobs died. So I was basically disagreeing that he said 'five years', because it's more like 'two years'