January 17, 2007 5:15 PM PST

Apple's iPhone has Wall Street chattering

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Apple sold 21 million iPods during its first quarter, but financial analysts asked almost as many questions of Apple executives Wednesday about a product that won't ship until June.

Executives didn't have any new revelations about Apple's iPhone after CEO Steve Jobs unveiled it last week at Macworld. The company held a conference call Wednesday afternoon to discuss its first-quarter results, which exceeded expectations by a large margin.

Apple's iPhone is essentially a widescreen video iPod that makes phone calls and can browse the Web, and the company plans to ship it in June for Cingular's cellular network. One of the more persistent questions about the iPhone has been Apple's decision to use Cingular's EDGE (Enhanced Data Rates for GSM Evolution) network. That will get you online at around 75Kbps to 135Kbps, not much faster than dial-up.

Apple chose the EDGE standard for the iPhone because that standard is found in many more locations than Cingular's much-faster HSDPA (High-Speed Downlink Packet Access) technology, said Peter Oppenheimer, Apple's chief financial officer. "Obviously, we'll be where the technology is over time," he said, alluding to the fact that an iPhone with support for speedier networks is a likely bet for the future.

Chief Operating Officer Tim Cook declined to comment on some other inquiries, such as whether users will be able to replace their iPhone batteries and the projected gross margin for the product. However, Cook did mention that Apple should have more to say about projections for the iPhone during next quarter's earnings call and that the company will release more specific information in June before it launches the product.

With regards to Cisco Systems' lawsuit against Apple for using the iPhone trademark owned by Cisco, Cook read the same Apple statement distributed last week by public relations staffers. "We think the Cisco lawsuit is silly," he said.

Financial analysts are so curious about how Apple's iPhone will affect iPod sales that one actually asked if Apple anticipates a slowdown in iPod sales during the upcoming quarter as people wait for the iPhone to arrive. Oppenheimer demurred, saying "it's really too soon to tell that."

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financial analyst, EDGE, Apple Computer, Apple iPhone, HSDPA

17 comments

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Love it..
I got my wife a nano last year as she needed a decent mp3 player for jogging. She loves it and I have to say its easier to navigate than my creative mp3 player. Likewise from what I can see of Steve's demo of the iPhone, it looks like its way better than my Motorola Razr and/or Blackberry 7130e. I'll be in line in June for a iPhone. Only tough choice now is 4GB or 8GB?
Posted by trifster (5 comments )
Reply Link Flag
RE: love it
however i am saddened that apple joined the band wagon. they do
enough already with mac's software and iPod. they dont need to
add another load just because they lose a few dollars.
Posted by The_Dude7 (9 comments )
Link Flag
Yes - Great design
Go for the 8GB - future software expansion.

I will wait till Christmas - and see what additional hardware upgrades in the iPhone.
Posted by ArturoYee (20 comments )
Link Flag
HOW ABOUT ZUNE IN JUNE (LOL)
I have been trying to figure out, why Steve Jobs has left the launch of iPhone to June, a full six months away. If you look at the depth of speculation about (the coming of) iPhone, over the past couple of years, you wonder, why the MAC show was not used to actually launch the product.

At the same time, I have a feeling that Apple will use this period to size up the competition,
assess their plus and minus points, and 'upgrade' their iPhone offerings.

Reckon, Apple, now that it has declared its hand, has no intention of letting the competition take over the ground, and shut Apple out of the market.

One other scenario, the innovators (target group, may go in for Samsung, LG, Motorola offerings, right now, because a touch-screen phone carries a cachet of its own. But the rest of the social groups may well decide to wait
for Apple's 'iConic' iPhone, till June. So, till then, the competition, figuratively, sits on its
haunches at the starting line, waiting till the star of the race is ready to take its 'rightful' place in this race.

I don't know how it will ultimately pan out. But Steve Jobs will not repeat the mistake of ever letting another Windows Vs. MAC happen again. He is determined to keep his organisation the top dog.
Posted by bhushan bhaagii (127 comments )
Link Flag
next iPod... Don't want iPhone for a while!
I'm excited about the next iPod possibility!

If Apple makes an iPhone, minus all the actual Phone stuff (no
Cingular, no EDGE or GSM, etc. support); only an iPod and
internet communications device and sell it for $400, I would buy
one! I don't own a cell phone; never have actually, and won't for
a while.

If they integrate iChat AV so once city-wide WiFi becomes
available, this new "iPod" will be able to make audio and video
chats commonplace WITHOUT the cellular networks!!

I would love this "computer/communications" device in my
pocket and think it would be an awesome evolution of the high-
end iPod! Apple would continue selling loads of these things.

Each household would probably buy more than one as they do
with cell phones. Without the cellular networks they wouldn't be
spending for the monthly plan. They would probably save money
in the long run. Especially if Apple comes out with different
levels of the iPod/Communications device at varying price
points.

I think Apple is paving the trail for computing of the future. It's
very exciting and the iPhone is only a "foot-in-the-door".
Posted by ssmiroldo (53 comments )
Reply Link Flag
A phone-less iPhone (a touch iPod) is definitely coming
How could it not be?
Posted by Mark Greene (163 comments )
Link Flag
DVORAKS Reality-distortion of iPhone
Beleives the Iphone is a direct copy of the Neonode and the
cisco Name and goes o to say that Microsoft sells an operting
system for smart phone and call apple a third party with a vague
copy of what it ready does. No wonder Ballmer's upset
Nothing about what the iPhone can and can't do
IS THIS DVORAK A CREEP OR WHAT!
Posted by Sniche (108 comments )
Reply Link Flag
Cool Phone but is it Green?
Apple makes cool products but for the price does this iPhone reflect different thinking?
It's a cool product with an amazing interface and large screen but for it to get market share it will have to come down in price IMHO...
Posted by HandGlad2 (91 comments )
Reply Link Flag
Green Means environmentally friendly
www.greenpeace.org/apple/itox.html
Posted by HandGlad2 (91 comments )
Link Flag
Expensive and tied to Cingular
I think this is a market they should have stayed out of.

Yea, it's a super cool phone - no question.

But it's expensive, and for all that expense, now you're stuck with Cingular. I don't wanna shovel out that much money on a phone, only to have it tie me to a single provider, let alone Cingular. If the price were lower, it'd be a no-brainer, but it's not a low price.

I love Apple, but I'd be shocked if this thing made any real waves at it's current pricing.

Charles R. Whealton
Charles Whealton @ pleasedontspam.com
Posted by chuck_whealton (521 comments )
Reply Link Flag
Look...
it's really quite simple. Just look at what they did with the iPod.
I bought a 1G iPod (waited for the 10GB model) for $500. Why?
Because I'm an early adopter, and I have the money. Eventually,
newer, better and LESS EXPENSIVE iPod's came along. I bought
them too (not all of course). Apple is taking advantage for it's
FANS (not in a bad way) who have money and the desire to buy
anything cool from Apple. The iPhone is WAY COOL. So, they
will get their 1% market share (I predict they will get 2%) in the
first year from the Apple loyal, and others who have to have the
latest gadget (no matter the cost). To these people, the risk is
LOW because they already have an iPod and love it!
Got it?
Posted by robot999 (109 comments )
Link Flag
Is the ZUNE Green?
Think globally:

Q: Are all the other cellphones green?
Q: Are all the other MP3 players green?
Q: are all the other internet surfing & email pushing devices green?

Q: what should an iPod + cellphone + blackberry cost?

If Microsoft is from the Silicon Forest, then why isn't the ZUNE green? (Oh, that's right...it is. It's just a recycled iPod / MP3 wannabe / me2player)
Posted by Llib Setag (951 comments )
Reply Link Flag
 

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