iPhone 5 Launch date
Today reports in the WSJ suggest that Sharp has fallen behind on the production of the iPhone 5 screens. http://on.wsj.com/R1aWVJ This will almost certainly impact the launch date and will impact iPhone 5 supplies. Does the date of the iPhone 5 launch matter to Canadian wireless carriers? We think so:
Launch in Early September?
If the iPhone 5 were to be launched in early September and there were no availability issues (Rogers reported these with the 4S), then we think this would be better for the carriers. We think this has been a relatively quiet period in terms of new loads and churn for all the carriers, following the best churn quarter ever in Q2 2012. Our hypothesis is that churn was low because many customers are waiting for the new iPhone. So an early launch would mean that churn and gross would both increase in Q3, which would not be a bad thing considering how they have already had two very quiet months in Q3. The churn and COA will be spread over two quarters.
Launch in early October?
Most churn will come in one quarter and Q4 is normally a big quarter anyway. Ardent Apple-philes could offload their 1 year old 4S to get the newer device causing a second wave of carrier independent churners. All the churn, COA and seasonally higher retention spend will occur in Q4.
Most reports suggest either Sept 12 or 21 as the announcement date. It is probably fair to add two weeks for first availability and another two weeks for reasonable volumes in Canada. Timing will make a difference. EBITDA margins should be lower due to higher COA and retention spend in the quarter that Apple releases their next device. This could impact short term investors. Either way, incumbent wireless carriers could have the best and worst financial quarters in the same year.
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