Analyst Offers Thoughts on iPhone Success, Multi-Carrier Business Models, iTunes Video Content

Piper Jaffray analyst Gene Munster today issued a note to clients this morning offering his team's thoughts on 14 "unanswered questions" about Apple. Several of his more revealing comments relate to the iPhone, which Munster feels will see its reach broadened to multiple carriers in the U.S. sometime within the next year.

Munster points to data from France, where Apple was forced by the courts to adopt a multi-carrier model, as an indication that Apple will rapidly transition its distribution model to multi-carrier agreements wherever possible, suggesting that such a change may occur in the U.S. next summer during the next probable iPhone refresh.

By way of example, for various reasons the company moved from an exclusive relationship with French wireless carrier Orange to a multi-carrier model. In France, the company now enjoys dramatically higher market share (in the 40 percent range vs. about 15 percent in ROW) than in countries with exclusive carrier agreements (such as AT&T in the U.S. where the iPhone has market share in the mid-teens). We believe Apple is seeing the increased unit sell-through more than offset the slightly (~10 percent) deteriorated economics per unit involved in non-exclusive agreements.

The report also suggests that Apple is unlikely to ever offer a low-cost phone model to compete with "rudimentary $10 models", citing the App Store as a key component to Apple's success in the mobile phone market and the near certainty that Apple would not be able to create a profitable low-cost phone still capable of running those applications.

Munster also sees the success of the iPhone 3GS, beyond that of Apple's expectations, as being due to two primary factors: 1) The success of the App Store, both in its applications themselves and in the cross-promotional "free advertising" the iPhone has received from high-profile companies promoting their iPhone applications, and 2) The fact that the smartphone industry has positioned the iPhone as the "gold standard", whereby competitors trying to emulate the iPhone experience are actually promoting the iPhone platform instead of their own products.

On the topic of iTunes Store video content, Munster sees Apple looking to modernize its offerings within the next year, entering likely lengthy negotiations to revamp arrangements currently limiting the amount of content and the allowed periods of availability. Apple would be looking to offer a monthly package of video content designed to replace a customer's cable bill, and may launch the service alongside upgraded Apple TV software and/or hardware.

We continue to believe that Apple will eventually offer a monthly subscription for iTunes TV shows accessible on Apple TV, iPods, iPhones, and Macs/PCs. Apple could leverage its deep library of content with many network and cable channel content owners to provide unlimited access to a sub-library of its TV shows for a standard monthly fee ($30 to $40 per month). Such a product would effectively replace a consumer's monthly cable bill (~$85/month) and offer access to current and older episodes of select shows on select channels. While timing on the launch of such a product is very uncertain given the negotiations that would need to take place, Apple may work to launch it simultaneously with a new version of Apple TV, or updated Apple TV software within the next year.

Related Forums: iPhone, Mac Apps

Popular Stories

AirPods Pro 3 Mock Feature

AirPods Pro 3 Just Months Away – Here's What We Know

Friday April 18, 2025 5:16 am PDT by
Despite being more than two years old, Apple's AirPods Pro 2 still dominate the premium wireless‑earbud space, thanks to a potent mix of top‑tier audio, class‑leading noise cancellation, and Apple's habit of delivering major new features through software updates. With AirPods Pro 3 widely expected to arrive in 2025, prospective buyers now face a familiar dilemma: snap up the proven...
iphone 17 air dummy unbox therapy

iPhone 17 Air's Extreme Thinness Demoed in New Video

Tuesday April 22, 2025 10:22 am PDT by
Apple plans to release an all-new super thin iPhone this year, debuting it alongside the iPhone 17, iPhone 17 Pro, and iPhone 17 Pro Max. We've seen pictures of dummy models, cases, and renders with the design, but Lewis Hilsenteger of Unbox Therapy today showed off newer dummy models that give us a better idea of just how thin the "iPhone 17 Air" will be. The iPhone 17 Air is expected to be ...
iphone 17 dummies sonny dickson

iPhone 17 Air Almost as Thin as Its Buttons, New Images Show

Thursday April 24, 2025 2:14 am PDT by
If you missed the video showing dummy models of Apple's all-new super thin iPhone 17 Air that's expected later this year, Sonny Dickson this morning shared some further images of the device in close alignment with the other dummy models in the iPhone 17 lineup, indicating just how thin it is likely to be in comparison. The iPhone 17 Air is expected to be around 5.5mm thick – with a thicker ...
ipad air windows 11 arm

M2 iPad Air Runs Windows 11 ARM via Emulation, Thanks to EU Rules

Tuesday April 22, 2025 5:01 am PDT by
A developer has demonstrated Windows 11 ARM running on an M2 iPad Air using emulation, which has become much easier since the EU's Digital Markets Act (DMA) regulations came into effect. As spotted by Windows Latest, NTDev shared an instance of the emulation on social media and posted a video on YouTube (embedded below) demonstrating it in action. The achievement relies on new EU regulatory...
iphone 16 pro models 1

17 Reasons to Wait for the iPhone 17

Thursday April 17, 2025 4:12 am PDT by
Apple's iPhone development roadmap runs several years into the future and the company is continually working with suppliers on several successive iPhone models simultaneously, which is why we often get rumored features months ahead of launch. The iPhone 17 series is no different, and we already have a good idea of what to expect from Apple's 2025 smartphone lineup. If you skipped the iPhone...
iOS 18

iOS 18.5 Includes Only a Few Changes So Far

Monday April 21, 2025 11:00 am PDT by
Apple seeded the third beta of iOS 18.5 to developers today, and so far the software update includes only a few minor changes. The changes are in the Mail and Settings apps. In the Mail app, you can now easily turn off contact photos directly within the app, by tapping on the circle with three dots in the top-right corner. In the Settings app, AppleCare+ coverage information is more...
iPhone 17 Pro Blue Feature Tighter Crop

iPhone 17 Pro Launching Later This Year With These 13 New Features

Wednesday April 23, 2025 8:31 am PDT by
While the iPhone 17 Pro and iPhone 17 Pro Max are not expected to launch until September, there are already plenty of rumors about the devices. Below, we recap key changes rumored for the iPhone 17 Pro models as of April 2025: Aluminum frame: iPhone 17 Pro models are rumored to have an aluminum frame, whereas the iPhone 15 Pro and iPhone 16 Pro models have a titanium frame, and the iPhone ...