Wednesday, November 18, 2009
Time to Cut AT&T Some Slack, iPhone Users?
Since 2008, AT&T’s network in and around San Francisco has experienced an increase in 3G data traffic of 2,000 percent. If you find this metric as astonishing as I do, consider this: The increase in Bay Area data traffic is actually below the national average–significantly below. According to AT&T CTO John Donovan, 3G data traffic on the company’s wireless network has risen nearly 5,000 percent nationally in the past 12 quarters.
For Oracle, whose acquisition of Peoplesoft and Siebel Systems cleared in Europe without conditions, news that the European Commission issued formal objections to its purchase of Sun was likely particularly galling. According to Oracle CEO Larry Ellison, Sun is already losing $100 million a month as it waits for regulatory approval, and judging from the price of the company’s stock today, it may be losing even more.
Add Morgan Stanley’s Kathryn Huberty to the list of analysts calling for Apple to broaden the iPhone’s distribution by ending carrier exclusivity deals. In a research note issued this morning, Huberty–noting that the iPhone’s market share grew 136 percent in France when Apple switched to multicarrier agreements there–said iPhone sales could more than double if the company took a similar tack in other countries.
Apple has $29 billion in cash, no debt, a 36 percent gross margin, and it’s on the cusp of another iPhone ugrade cycle. Little wonder, then, that analysts are raising their target prices on the company’s stock. Among those doing so today: Morgan Stanley’s Kathryn Huberty, who says “Apple is emerging as the clear leader in the battle over the mobile Internet.”
Riddle for you: What’s larger than the gross domestic product of Sri Lanka, Lebanon or Bulgaria, and when divided by 186,000, more than four times higher than the median U.S. household income in 2006? If you guessed the $39 billion in bonuses Wall Street’s five largest banks doled out in 2007, you’re right!
Six months ago, the nation had five independent investment banks. That number soon dwindled to four. And then to three. And by last week’s end, only two investment banks remained. Now those two are gone as well. The Federal Reserve Board hammered the final nail in the coffin of independent investment banks Sunday evening, allowing Morgan Stanley and Goldman Sachs to become traditional bank holding companies.
Next year is shaping up to be Apple’s (AAPL) best financial year ever–and we’re not even out of 2008 yet. Last week Piper Jaffray (PJC) analyst Gene Munster said the company’s new App Store could end up generating $1.21 billion in revenue. And now Morgan Stanley (MS) is predicting Apple will sell 27 million iPhones in 2009. 
