In conjunction with its “uncarrier” strategy with lower monthly service plan fees, T-Mobile USA announced earlier this week that it will start carrying iPhone5 for the first time, starting from April 12. The company revealed that Apple Inc. (NASDAQ:AAPL)’s iPhone 5 will just cost $99 up-front, including $50 per month for unlimited talk, text and internet with 500 MB data.
Analysts at Sterne Agee view this as positive as it allows Apple Inc. (NASDAQ:AAPL) to gain market share in the U.S. with an additional 42 million subscribers. The research firm also believe this should help Apple Inc. (NASDAQ:AAPL)’s June quarter outlook which most expect to be very conservative due to weak build plan data ahead of new iPhone refreshes. Analysts at the firm continue to see Apple Inc. (NASDAQ:AAPL) as a 2H story with several catalysts.
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The research firm view the addition of T-Mobile USA as a customer as positive as this is one of a few remaining large carriers in the world that doesn’t carry iPhone. T-Mobile has 33 million subscribers and with its pending acquisition of MetroPCS will have a total of 42 million subscribers. This compares to 116 million for Verizon Wireless, 107 million for AT&T Inc. (NYSE:T), and 55 million for Sprint Nextel Corporation (NYSE:S). While T-Mobile USA has lost customers, its core customer base remains loyal to its lower-cost and unlimited data plans. Sterne Agee believe this will help Apple Inc. (NASDAQ:AAPL) capture incremental customers and strengthen its position against Google Inc (NASDAQ:GOOG) Android, which got its start on T-Mobile USA.
Most investors Sterne Agee have talked to in recent weeks believe that the company’s June quarter guidance will likely be very conservative, meaning a bit below consensus estimates. This makes fundamental sense as research firm’s supplier checks indicate that iPhone build plans have been cut due to weaker than expected demand and what appears to be an inventory draw-down ahead of iPhone refreshes in the 2H; however, analysts believe the addition of T-Mobile USA as a carrier could somewhat offset. At this point, analysts are comfortable with their iPhone forecast looking for 32.5 million units for the March quarter and 30 million for the June quarter (vs. consensus at 35-36 million and 30 million, respectively).
Sterne Agee continue to believe that potential catalyst for the 2H are new carrier wins, as well as product refreshes. Two large carriers that have yet to carry iPhone include China Mobile and NTT Docomo. China Mobile is the world’s largest wireless carrier with 703 million subscribers while NTT Docomo has 61 million subscribers, which is more than half of Japan’s cellular market. From firm’s supplier checks, analysts anticipate refreshes including iPhone 5S, a lower-cost iPhone, and new iPads.
The firm continue to believe that Apple Inc. (NASDAQ:AAPL) is positioned to outperform in this tough macroeconomic environment with its defend-able strategic and structural advantages and its vertical integration.