Wednesday, May 16, 2012

Enjoy that low price for the Iphone while it lasts.

The Wall Street Journal reported last week wireless phone carriers are seeking to reduce the $400 per phone subsidy paid to Apple for the Iphone"

"Wireless carriers are taking their first steps to change the terms of smartphone deals that have mostly benefited phone makers like Apple Inc., AAPL -0.91% in a push that could leave consumers paying more for devices like the iPhone.

Carriers in the U.S. have been raising monthly rates and charging higher fees when customers upgrade to new phones. In Europe, embattled carriers are taking more aggressive measures: Spain's two leading wireless companies are refusing to subsidize devices for new customers.

In the global wireless market, where device manufacturers such as Apple and Samsung Electronics Co. and software makers like Google Inc. GOOG +1.16% continue to hold considerable sway, carriers still typically pay full price for their phones, then sell them at deep discounts to customers who sign two-year contracts.

But the carriers' latest signs of resistance are drawing applause from investors and analysts. They say the carriers could benefit more from the smartphone boom if they succeed in raising prices for service plans and slowing the rate at which customers buy new phones.

"Optimism has increased that we are witnessing the leading edge of a more disciplined, and more profitable, future," Craig Moffett, a telecom analyst at Bernstein Research, wrote in a research note on Tuesday. The question now, he wrote, is how much carriers can increase their profits thanks to "increased discipline and pricing power."

At Sprint Nextel Corp., S -1.20% AT&T Inc. T -0.54% and Verizon Communications Inc., combined revenue from contract customers increased 6.2% from a year earlier in the first quarter of 2012, the fastest growth rate since before the recession, according to Bernstein Research. In the past month, AT&T and Verizon shares have gained more than 5%, while the broader market, as measured by the Standard & Poor's 500-stock index, is down 1%. Verizon Communications co-owns Verizon Wireless with Vodafone Group PLC. VOD -0.20%
[SUBSIDY]

Apple, meanwhile, is in the opposite situation. Its shares are down 12% from their April 10 record of $644, partly because of investor concerns that carriers may be looking to ratchet back the big subsidies that have allowed so many people to own an iPhone.

Apple Chief Executive Tim Cook has played down concerns that changes in subsidy policies could affect iPhone sales. He told analysts last month that carriers will continue supporting the iPhone because it brings them satisfied customers. Carriers "want to provide what their customers want to buy," he said. He argued that the Spanish market, which is reeling from Europe's economic crisis, "shouldn't be viewed as a proxy for the world."

Wireless carriers shell out $400 for every iPhone sold, analysts estimate.

Now, carriers are adding fees to discourage customers from getting new phones. Verizon imposed a $30 upgrade fee for some customers last month, and both AT&T and Sprint have doubled their upgrade fees to $36 in recent months. Customers pay the fees when they get a new phone.

"It will have a meaningful impact on us in managing those handset costs," AT&T Chief Financial Officer John Stephens said on a conference call with analysts last month.

Monthly rates for smartphone service plans have been rising, too. In January, AT&T boosted some monthly data plans by $5, or as much as 33%, while giving consumers more data. In April, pay-as-you-go carrier MetroPCS Communications Corp. PCS -4.16% raised its unlimited high-speed data plan to $70 from $60. Sprint raised smartphone data prices early last year by $10 a month.

Amid the smartphone craze, much of the profits are bypassing wireless carriers, going instead to app developers and Internet companies like Google, which charge for services and sell ads, and hardware companies like Apple, which sold 35 million iPhones in the first three months of this year.

That's why U.S. companies are closely watching the wireless industry's experiment in Spain. There, leading wireless carrierTelefónica SA TEF -5.26% stopped subsidizing phones for new customers in March. The No. 2 carrier, Vodafone, quickly followed suit. The No. 3 carrier, France Télécom SA's FTE -2.37% Orange Group, refused to go along.

As a result, new customers at Vodafone and Telefónica can no longer get an iPhone for a discounted rate with a two-year contract. Instead, they have to pay nearly $800 to buy the phone outright or sign up for an installment plan that, at Telefónica, adds 18 monthly payments of about $45 to their bills.

Telefónica and Vodafone, which have made the decision to shift resources from acquiring customers to retaining them, say they will continue to subsidize new phones for existing customers that upgrade. Still, the policy change will reduce Telefonica's spending on device subsidies by 25%, a spokesman said.

"People didn't know the effort we were making," a Telefónica spokesman said.

Orange's Spanish operations declined to comment.

For Telefónica and Vodafone, the risks is that Orange will seize the opening to try to win over customers with cheaper, subsidized phones. And, in fact, Orange has said it hopes to use its competitors' moves to increase its market share in Spain.

The industry is watching to see how well Vodafone and Telefónica hold on to customers, as a test of whether other carriers around the world might be able to wriggle free of the subsidy model.

Verizon Communications Chief Executive Lowell McAdam mentioned Telefónica's installment-plan experiment in an interview with The Wall Street Journal in late March. Verizon Wireless, he said, may cautiously follow the Spanish carrier's lead.

"We'll probably offer some things like that, and then we'll see what the adoption is like," Mr. McAdam said. "You can't push this on customers before customers are ready for it
."

Enjoy the $200 price while it lasts although I suspect an installment plan will be offered. Too many teens are addicted to their iphones. What is interesting is RIM, yes, the much maligned RIM that the media loves to hype as the next corporate train wreck, has been able to hold its own against Apple outside of America as the price of the Iphone is much higher. Is this the Achilles heel in Apple's stock price?

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Trollfest '09

Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

Wrestling returns, except this time it will be a Battle Royal with Othor Cain, Ben Allen, Kim Wade, Haley Fisackerly, Alan Lange, and “Big Cat” Donna Ladd all in the ring at the same time. The Battle Royal will be in a steel cage, no time limit, no referee, and the losers must leave town. Marshand Crisler will be the honorary referee (as it gives him a title without actually having to do anything).


Meet KIM Waaaaaade at the Entergy Tent. For five pesos, Kim will sell you a chance to win a deed to a crack house on Ridgeway Street stuffed in the Howard Industries pinata. Don't worry if the pinata is beaten to shreds, as Mr. Wade has Jose, Emmanuel, and Carlos, all illegal immigrants, available as replacements for the it. Upon leaving the Entergy tent, fig leaves will be available in case Entergy literally takes everything you have as part of its Trollfest ticket price adjustment charge.

Donna Ladd of The Jackson Free Press will give several classes on learning how to write. Smearing, writing without factchecking, and reporting only one side of a story will be covered. A donation to pay their taxes will be accepted and she will be signing copies of their former federal tax liens. Ms. Ladd will give a dramatic reading of her two award-winning essays (They received The Jackson Free Press "Best Of" awards.) "Why everything is always about me" and "Why I cover murders better than anyone else in Jackson".

In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.


In order to help clean up the legal profession, Adam Kilgore of the Mississippi Bar will be giving away free, round-trip plane tickets to the North Pole where they keep their bar complaint forms (which are NOT available online). If you don't want to go to the North Pole, you can enjoy Brant Brantley's (of the Mississippi Commission on Judicial Performance) free guided tours of the quicksand field over by High Street where all complaints against judges disappear. If for some reason you are unable to control yourself, never fear; Judge Houston Patton will operate his jail where no lawyers are needed or allowed as you just sit there for minutes... hours.... months...years until he decides he is tired of you sitting in his jail. Do not think Judge Patton is a bad judge however as he plans to serve free Mad Dog 20/20 to all inmates.

Trollfest '09 is a pet-friendly event as well. Feel free to bring your dog with you and do not worry if your pet gets hungry, as employees of the Jackson Zoo will be on hand to provide some of their animals as food when it gets to be feeding time for your little loved one.

Relax at the Fox News Tent. Since there are only three blonde reporters in Jackson (being blonde is a requirement for working at Fox News), Megan and Kathryn from WAPT and Wendy from WLBT will be on loan to Fox. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both and a torn-up Obama yard sign will entitle you to free drinks served by Megan, Wendy, and Kathryn. Get your tickets now. Since this is an event for trolls, no ID is required. Just bring the hate. Bring the family, Trollfest '09 is for EVERYONE!!!

This is definitely a Beaver production.


Note: Security provided by INS.

Trollfest '07

Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

Note: Security provided by INS
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