Just got an email from John Melloy over at CNBC with news of a lowered forecast on Sprint from Goldman Sachs. Here’s a portion of the note from Goldman:
Walking through our iPhone forecasts.
The launch of the iPhone is an important
milestone for Sprint in its ability to compete on level footing with regards to handsets.
However, the device carries significant upfront margin dilution, and we think Sprint will
struggle more than others to be able to absorb the impact. We currently estimate 1.6mn
iPhone sales during 4Q11, driving record-low margins of 11.3% (noting some
incremental qoq pressure from Network Vision as well). We estimate 7.7mn iPhone sales
in 2012, and 9.9mn in 2013 (see exhibit 6). Our forecasts imply Sprint takes roughly 20%
of total iPhone sales between 4Q11-2013, compared to an 18% share of total postpaid
subscribers among iPhone carriers (AT&T/Verizon/Sprint). Given the elevated subsidy the
device carries, as well as iDEN migrations Sprint will need to work through with an
accelerated Network Vision rollout (iDEN shutdown by 2013), we expect net equipment
subsidy to be elevated. This is a key driver of our lowered EBITDA forecasts for 2012/2013.
$AAPL $S $GS