Apple has remained silent about a cell phone. Some people are
wondering if this is the right time to buy Apple
stock, or defer. And if Apple does ship a phone,
people are wondering how it will fit into the
existing structure of the cell phone business. These
were the issues brought up in a Wall Street Journal
article Friday. [Subscription required.]
All of Appleis issues were laid out. Will an Apple
cell phone with music capability cannibalize iPod sales?
Next, Appleis stock is already considered overvalued by some.
Buying now could be a risk if the Apple cell phone
disappoints. However, the article also proposed that
Apple has a huge opportunity. Six million cell phones
sold in 2007 and 12 million in 2009 would generate
an estimated US$5.41B in revenue.
There are other considerations cited: “Apple would have
to take on the responsibilities of … billing and customer
service.” Also, Appleis iPod business model conflicts the
the current system of virtually giving away hardware and
charging for services. Disneyis own cell phone service failed when Disneyis
customers were luke warm to the services offered.
Apple is faced with a delicate balancing act. Appleis
investors and analysts are uncertain about Appleis business model
and the direction of the technology. There are many opportunities to go wrong.
How Apple wades through all these perils has everybody watching.