Today, Cramer on TheStreet.com is out saying that the new iPhone’s cool factor isn’t in the numbers and that the guys who make the numbers are too young to have kids. If you will recall, this is his #2 growth pick for 2007 from last week.
I think a lot of the analysts do get it or are starting to get it, although he is right that they have been and probably are way behind the curve. This morning there were price target hikes and raised estimates (or the same type of call) from Credit Suisse, Prudential, Sanford Bernstein, UBS, Deutsche Bank, Citigroup, Merrill Lynch, and more. Yesterday I noted how so many analysts would have play catch-up on this because they had been public about saying the "Apple Phone" was not likely coming out in the release, so they’d have to go back and crunch their numbers.
One thing that is worth noting is that if you go to Blogma, Engadget, TechCrunch, listen to Herb Greenberg,
and the like, then you’ll see a lot of comments about the technology shortcomings on the iPhone. The one consideration that hasn’t been made and hasn’treally been factored in is that one has to consider that what was show yesterday will also be the subject of Moore’s Law and that it is likely a bandaid release before the second generation iPhone will come out after they have had time to add all the other cool features and be able to change out to newer and faster technologies. What is most important to remember right now is that even if the first phone isn’t all that successful compared to how Palm or Blackberry took the market, it is incremental revenue and income and is not at all in the old estimate models before yesterday.
This really took the sails out of the likes of R-I-M (RIMM) and Palm (PALM) yesterday, although these are recovering today because the features of the iPhone aren’t business class yet. What you can expect is that this will be an ongoing case of urban warfare among all the players several quarters out. If Palm or R-I-M have any next-new things lurking they better start unveiling them faster and faster because there is a new competitor coming to town. I am personally happy with my Palm Treo for now, but the future is a different story.
Jon C. Ogg
January 10, 2007