Friday, September 11, 2009
Monday, September 07, 2009
On Apple's iPhone the music website Spotify launches
The Swedish music streaming website Spotify, announced launch of its software on Apple's iPhone on Monday. The best-selling handset that features high speed internet access.The Swedish company said in the statement that, the application of the software is available to download for free from the AppStore, Apple's online shop, for customers that subscribe to its premium service.
Music fans can sign up for the company's ad-supported free service or a premium service with no commercials that costs 9.99 euros a month.
Users can search for new tunes and then stream them directly on their handsets. Playlists can even be saved for use when there is poor mobile reception.
The service, which first launched last year, is seen as a potential rival to iTunes because of its huge, free library of millions of songs.
The Swedish company first asked Apple in July if its software could be made available on the iPhone and both companies struck a deal at the end of August.
Spotify is currently only available in Sweden, Norway, Finland, Britain, France and Spain.
According to analyst iPhone is cash machine for Apple
On Friday Vicent Rech wrote in a research note that 'Due to the Apple's practice of amortizing iPhone revenue and costs over a 24-month period, there is a substantial difference between reported numbers and underlying cash generation.' However, "most market participants including us have missed the dramatic impact of this specific accounting practice because it hides profitability trends," Rech asserted.
Rech contends that iPhone gross margin is already running at about 60%, compared to 33% for the rest of Apple's activities. He sees iPhone accounting for 28% of adjusted revenue in 2009, growing to more than 40% in 2012. Even if iPhone gross margin drops to 50%, he says, Apple's reported gross margin will rise from 36% in fiscal 2009 to 39% in 2012 due to a shift in product mix.
Even if Apple sells sold no iPhones after June 2009, he writes, assuming other activities produce a 33% gross margin, the reported margin would reach 37% in Q4, with 2010 still flat at 36% versus 2009. He notes that the Street consensus calls for flat gross margin in the 2009-2011 period, which he contends would imply a dramatic fall in Mac and iPod profitability.
The analyst sees the company producing adjusted EPS of $9.13 in the September 2009 fiscal year, $11.16 next year and a whopping $13.83 in fiscal 2011. On a reported basis, he expects $5.42 this year, $7.92 next year and $10.18 in FY 2011.
Rech on Friday raised his target price on the stock to $255, from $170.
The analyst also contends that the fat profitability of the iPhone gives the company substantial room to cut prices, a factor he says poses a risk for Nokia, which he already rates a Sell.




