After sending mixed signals, AT&T is now back in the iPhone-selling business. The carrier stopped selling the mobile device to New York-area residents for a brief time. On Dec. 28, after the issue had been resolved, an analyst raised the target price for Apple's stock to $260. The analyst described iPhone use as still being in its infancy.
The Apple iPhone is now available again for online sale in the New
According to several reports,
potential purchasers in New York
and northern New Jersey were told
during the weekend of Dec. 26 that, "New York
is not ready for the iPhone," essentially due to AT&T's inability to
offer adequate coverage in the area.
"You don't have enough towers to handle the phone," an AT&T
sales representative reportedly told a reporter for The
Then, on Dec. 28, AT&T released a short statement saying sales of the
iPhone in the New York area were
ready to resume. AT&T did not offer a specific explanation for what
The carrier has been roundly criticized for its lack of coverage in major
metropolitan areas, particularly New York
and San Francisco. The iPhone,
which AT&T is currently the exclusive provider of in the United States, has
been an enormous success for AT&T, but so much so that its growing number
of users are said to be bogging down its network.
According to AT&T, its smartphone traffic has increased by 5,000 percent
in the past three years.
On Dec. 8, in an effort to use the iPhone to help it pinpoint faltering
coverage areas, AT&T introduced a free
AT&T Mark the Spot application,
which enables customers to instantly-or in greater detail-alert it to
any services issues they experience, such as dropped calls. The carrier
said it plans to use the data it collects to inform decisions about where to
invest money allocated for improving its wireless network.
Fletcher Cook, an AT&T spokesperson, in a note to several media outlets,
explained the sudden unavailability of the iPhones in the New
York area by saying, "We periodically modify our
promotions and distribution channels."
Customers are being told to visit Apple or AT&T retail locations
instead, which gives credence to reports such as that from The New York Times
that the online
unavailability of the iPhones is due to "fraudulent activity" in some
Whether available to New Yorkers or not, Broadpoint AmTech analyst Brian
Marshall said he sees current iPhone use as being just the tip of the iceberg,
and on Dec. 28 raised the target price of Apple stock to $260.
"Despite the enormous success of the iPhone since inception in July
'07, we strongly believe the device is still in its infancy with respect to
penetrating the global post-paid subscriber market," Marshall
wrote in a research note. "For example, our analysis indicates that while
the iPhone currently enjoys 5.0 percent penetration of [AT&T's] post-paid
subscriber base, the penetration of its current international carrier partners'
post-paid subscriber base is only 0.8 percent."
Marshall continued, "In our
view, Apple remains the best technology company on the planet, and we are
comfortable with our Street-high Dec. 2009 estimates of $12,509 [million] and
$2.27 ([versus] consensus of $11,856 [million] and $2.04)."