Apple built its iPhone business with exclusive carrier deals, like AT&T in the U.S., to make sure it got things right and to maximise profitability. But we expect Apple to increasingly break those deals and sign on multiple carrier partners per country.
Why? Because as Morgan Stanley analyst Kathryn Huberty notes today, its market share could easily double (or more) when it’s distributed by multiple carriers in each region. That’s because in many markets — especially the U.S. — consumers pick their mobile carrier first, and their phone second.
To be sure, that will likely lead to lower profit per unit. But Apple could some make that up in volume and revenue from other services, such as MobileMe, app revenue, etc. And because the fast-growing smartphone industry is a platform war, Apple has some incentive to value market share gains over margins.
This chart, via Morgan Stanley’s Huberty, shows Apple’s current market share — last 12 months — in blue, and its potential market share with multiple carrier partners in gold.
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