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Thu, Sep 02, 2010 - 01:24 PM EDT  —  AAPL: 250.03 (-0.30, -0.12%)  |  NASDAQ: 2186.18 (+9.34, +0.43%)

Schwarz: Apple iPad to change iPhone strategy; thrash all analysts’ unit sales estimates (with vid)
Friday, March 19, 2010 - 04:48 PM EDT

The iPad will transform Apple's business model. TSC's Jason Schwarz explains how and what it means for Apple stock.

The iPad is going to thrash all analysts' estimates, says Schwarz.


Direct link to video via TheStreet here.

MacDailyNews Take: Since the first iPad unit estimates began appearing, we have been routinely saying that they were all too low (for examples, see: here, here, here, here, and here). Schwarz, as usual, gets it.

[Thanks to MacDailyNews Reader "David E." for the heads up.]

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Mar 19, 10 - 04:49 pm Comment from: Uncle Al

May the Schwarz be with you.

Mar 19, 10 - 04:52 pm Comment from: NCG598

Yup, easy for those that understand and not stuck with their face in a Microsoft PC all day!

Well, when it is working.

Mar 19, 10 - 04:53 pm Comment from: XE1

2 Batteries. Slide out keyboard. BET ON IT.

MDN Magic Word: 'lack'

Mar 19, 10 - 04:57 pm Comment from: rhoytink

Didn't know your Schwarz was as big as mine!

Mar 19, 10 - 04:59 pm Comment from: LeeSweet

Uh, shrink the iPhone? Where is this rumor that he's heard that we've not heard a word of? I get and agree with the rest of it. But I think the iPad is already enough larger than the iPhone, and perhaps someone has misinterpreted 'it will be larger and a gamechanger' to mean 'shrink the iPhone'.

Mar 19, 10 - 05:00 pm Comment from: Richie

NOOOO, don't shrink the screen size of the iPhone!

Other than that, I agree with da man.

Mar 19, 10 - 05:05 pm Comment from: grwisher

He is half right:
Right - The iPad estimates are low.
Wrong - The screen size of the iPhone will not change.

Mar 19, 10 - 05:06 pm Comment from: 8core

(with flash) crappushino, kill flash!

Mar 19, 10 - 05:06 pm Comment from: Michael

There is no way that Apple is going to decrease the functional use of the iPhone by decreasing it's screen size. If it is to be decreased (which I doubt) it will be because it makes the iPhone a more functional device. More likely the iPhone will start to come in two sizes. The iPhone is already well differentiated from the iPad (phone calls anyone), as is the iPod Touch (pocket sized). The iPad will change the face of computing because it will be a gateway into the way that all mobile computers are made and used. It will reinvent the desktop for home use and the mobile screen for all other use over the course of the next several years.

Mar 19, 10 - 05:10 pm Comment from: Norrin Radd

Hmmm.....I think he's nuts if he thinks the iPhone screen size is going to change. The rest of it I can see, but the iPhone changing screen size? Nah. Ain't gonna happen.

Mar 19, 10 - 05:14 pm Comment from: mr awesome

I dont think that the iPad will be a game changer for the reason he states. Schwartz says that the iPhone will be the "glue" to the internet and iPad and that the iPad will be a "mobile device".

It would be a bad decision for Apple to downsize the iPhone because all the apps would be strange and it would not be making the iPhone any better than it already is. Instead of expanding on the iPhone, Apple is making the iPad, a device in between the macbook and iPhone, a lot like the Porche cayman in between the carrera and boxter. Like the iPad the Porche cayman does not make very much sense, yet it is a very well selling car with a six month long waiting list. I hope as a share holder that it will be the same for the iPad.

I can't say much about it's functionality until I try one though!

Mar 19, 10 - 05:17 pm Comment from: nomoremsbs

Why would they gift wrap the iPhone market share and give it away when iPhone can still be the glue/hotspot for the iPad? I'm not going to have my iPad in a man-purse by my side at all times. Right now, the current screen size is fairly close to the sweet spot.

Mar 19, 10 - 05:20 pm Comment from: iWill

BOOM.

iPhone as an internet antennae for iPad.

YES!

Mar 19, 10 - 05:20 pm Comment from: lalit

This guy is jackass. his analysis is based on rumors and if the rumors are right Apple will have two iPhone model by end of this year, one with slightly bigger screen then the current iPhone.

Mar 19, 10 - 05:25 pm Comment from: Brau

The guy is plain looney. Apple would never dilute one product to make another appear great. A move like that would be against everything Steve Jobs and Apple is about. Believe it or not, there are people out there who want a smaller, simpler iPhone. Apple will likely release smaller versions of the iPhone, just like they did for the iPod, and for that they will need smaller screens.

Tethering? Yeah, like people are going to increase their cell data package so they can pay through the nose even more to download those iTunes purchased movies over 3G/4G. Cell contracts are too damn expensive already and unless Apple can change that, it won't happen any time soon.

Mar 19, 10 - 05:26 pm Comment from: Mike Farr

A smaller iPhone as a second iPhone model makes sense. For some people an iPad and a smaller iPhone would be all that's necessary.

For others, myself included, there are times when you won't have your iPad but you still want your phone with its apps: at the movies, at a concert, at a restaurant, at your kids soccer game, church, playing sports. The fact that it is an "always with you" device is significant for apps such as restaurant finders, tipping guides, maps etc.

Mar 19, 10 - 05:31 pm Comment from: David Chu

Can't take this report serious. Apple is not going to shrink the size of the iPhone. That would seriously piss off all their developers and customers.

What they may do is introduce a 'Nano' version. Maybe even get the costs down to free with a contract?

We can be sure that they are working on something big to take control of the market from Android.

Mar 19, 10 - 05:37 pm Comment from: Jim - TIV

"Apple would never dilute one product to make another appear great."

uh... imovie HD to current imovie version, and FCP

Mar 19, 10 - 05:40 pm Comment from: TheConfuzed1

I can't see Apple reducing the size of the iPhone, unless it is for another, smaller, model, while keeping the current size current as well.

I'd actually be in favor of a slightly thicker iPhone, with twice the battery life, and I would be strongly opposed to a smaller screen.

My wife reads ebooks on her iPhone, and I've considered getting her an iPad. Her birthday is just about a week too soon this year though for that. Perhaps for Christmas this year...

However, we both already have iPhones, and I don't see either of us dropping them. We already pay ATT for our monthly service though, and see no need to pay them twice. Tethering makes a lot of sense for this.

Apple should make a deal with their providers so that any iPhone can automatically tether for iPad at no additional charge. While we're at it, stop charging me for texts, when I supposedly have an unlimited data plan!

Either way, I definitely see the iPad becoming a huge hit, but I don't think it will be replacing many iPhones.

Mar 19, 10 - 05:41 pm Comment from: CourtJester

This is complete bollocks! No way is Apple going to downsize the iPhone screen and perform a fragmentation of the iPhone iPod Touch market.

My predictions are correct 10% of the time.

Mar 19, 10 - 05:43 pm Comment from: cogitoergomac

@ lalit: I hardly think that makes him a jackass. The substance of his commentary--that the iPad success is not yet factored into AAPL's stock price--remains valid. You [and Brau missed his point also] may disagree with his analysis, but at least he offers analysis. You, on the other hand........

Mar 19, 10 - 05:45 pm Comment from: Huh?

David Chu wrote: We can be sure that they are working on something big to take control of the market from Android.

Android has control of the market?!

Sorry, but it is just another also ran. Even if Android kept up the pace that it has, it wouldn't pass the iPhone until 2012... and it won't keep up the pace it has now. It is just too disjointed and isn't even really like one platform (lack of upgradability, etc).

Mar 19, 10 - 05:50 pm Comment from: Kevin Winsness

I just hyperventilated!!!

Mar 19, 10 - 05:52 pm Comment from: Matt

While I do agree the iPad will do well and I'm looking forward to getting mine.. This guy is smoking something if he really thinks Apple is going to reduce the iPhone screen because the iPad is popular.. It makes no sense at all. Umm.. Sorry but I'm not going to haul my phone and a iPad everywhere I go all the time.. Maybe they could have two versions.. Like the iPhone nano rumor that surfaces once and a while.. But if Apple doesn't offer a iPhone with a screen at least as big as it is now in the future.. Then that's NOT something to get excited about as a shareholder.. It's a reason to consider selling.

Mar 19, 10 - 05:58 pm Comment from: BullSheet

I'd bet my left nut this never happens.

— Lance Armstrong

Mar 19, 10 - 06:10 pm Comment from: jmmx

I thought someone had a pic of the new iPhone, and it was 1/2" larger.

So size is all rumor!!

Sure looks like the Pad is a hit tho. I got my money riding on it.

Mar 19, 10 - 06:31 pm Comment from: Ogre

estimates and use of the iPhone 4G as a MiFi-type device are all great, but there's no way they're decreasing screen size when competing devices (DROID, Nexus 1) have larger displays that maintain a similar overall device footprint.

Mar 19, 10 - 06:40 pm Comment from: gws

If Apple does reduce the screen size of a newer iPhone Nano, it will have the same pixel count to retain compatibility with the vast amount of existing iPhone software.

Typing on an even smaller screen would not be easy unless it was only marginally smaller.

Teathering, if implemented by AT&T should apply to the iPhone as well as the iPad so that an iPhone would not be needed to get a computer on the net via an iPad.

- gws

Mar 19, 10 - 06:45 pm Comment from: currentinterest

This guy must be drinking LSD laced Kool-Aid. There may be another smaller iPhone (my wife wants this), but the current iPhone screen size will definitely be maintained in the primary device. Once one experiences the iPad, the differences with the iPhone will be readily apparent, no need for a tiny screen. Also, I doubt we will se iPad to iPhone tethering any time soon.

Mar 19, 10 - 06:49 pm Comment from: macaholic

tethering? Yay , but will it happen?
Who says u can do that anyway with the hardware as we currently know it to be. I know u can tether a laptop to an iPhone, but an iPad?

Mar 19, 10 - 07:17 pm Comment from: scottm4321

Absolute nonsense about changing the iPhone screen. Apple does not devalue it's products in order to make a new product look better. It creates a new product that creates or grows a market. Apple pushes forward, it doesn't go backwards.

Mar 19, 10 - 07:41 pm Comment from: Tobias Tate

there's no light behind his eyes... big surprise

Mar 19, 10 - 08:14 pm Comment from: iMaki

For God's sake - give me a fruckin web cam on the iPad and I won't give a holy crap what size you make the stupid phone.

Mar 19, 10 - 08:57 pm Comment from: flirtsquirt

flash vid. Ugh.

Mar 19, 10 - 09:48 pm Comment from: rael

what?
what?
I mean, what?

why would Apple make the iPhone screen smaller?
maybe they may come out with a 2nd type of iPhone, but the iphone's screen is perfect at its current size, smaller makes no sense and bigger except for a maybe 1/2 CM makes no sense either. making the screen smaller would not make people want to buy the ipad, the ipad just needs to be marketed appropriately the same way the iPod is marketed differently than the iPhone is.

I have an iPhone and plan to buy an iPad eventually (maybe by years end) because I wean to read books on it. reading books on my iphone is not ideal for me, so I am look at the iPad for that. make the screen smaller on th iPhone and I will look at Android or (gasspp) WinMo AKA windows phone.

Mar 19, 10 - 09:48 pm Comment from: DRMSSDB

I agree with the choir that Apple will not and does not have to decrease the size of the iPhone screen. Could there be a smaller model? Maybe, but I doubt that, too.

The iPad could be a game changer, and I think it will sell above estimates. However, even in that scenario, the number of possible units sold for iPhones is much larger than the iPad. Everyone and their cat has cell phones. What fraction have laptops? I don't think that iPad sales will be more than laptop sales for the next few years, though it could get there in the next 5 as people that didn't have laptops get tablets. Regardless, many times more iPhones will be sold than iPads and every one of those has monthly income attached to it.

Oh, plus the iPad has no keyboard or FM tuner, doesn't have enough buttons, and doesn't support flash. I mean, really, who's gonna buy the thing? Touch screen? That's only for ATMs.

Mar 19, 10 - 09:52 pm Comment from: Jesus

The video will not play on my iPhone.

Mar 19, 10 - 10:51 pm Comment from: Anim8me2

"Why would you decrease the size of the iPhone screen?"
You wouldn't you incredible tool!
Why the fuck are people still listening to anything these people have to say? Aren't they under investigation now?
You can watch his delivery and tell that he has no clue what he is talking about. It is almost like his eyes are saying "I am so full of shit."

Mar 20, 10 - 12:12 am Comment from: Dodger

I have to agree with most of the posters here. This guy works at the same pump-and-dump financial site as our ultra-shithead pal Scott Moritz... To quote their boss, "They know nothing!!!!"

1) It's completely nonsensical to suggest Apple will alter the iPhone screen size, why? to differentiate? so stupid it hurts.

2) iPhone becomes a tethering appliance for the iPad? 1st gen iPad already has wifi and 3G. All the carrier (AT&T;) has to do is allow me to share my existing data plan with another sim... done...Again such an obviously brain dead concept that even my dog laughed when he heard it.

These guys are players, they are trying to program AAPL stock.. I find them all to be douchebags.

Mar 20, 10 - 10:10 am Comment from: Tim Flint

I might have believed all that until he claimed that the next iPhone will be smaller. Steve Jobs doesn't shift his strategy in mid-game.

Mar 20, 10 - 10:48 pm Comment from: boulderfrog

I met Swartz in a public bathroom. He pleased me in a way I didn't expect.

And he swallowed.

Mar 21, 10 - 12:06 am Comment from: DJ

iPhone Nano would be useful in this regard - and would be a useful tether to an iPad.

Mar 22, 10 - 03:42 am Comment from: PiMatrix

Jason is right about the iPad estimates being WAY too low, it will be the internet appliance for the masses, a full computer is to big, too heavy, too expensive, and too complicated for most users. However I do think Apple will not replace the 3GS but come out with a lower cost iPhone like they did in past for the iPod.

Mar 22, 10 - 09:28 am Comment from: Jersey_Trader

Apple should keep the size of the classic iPhone and also make a small iPod like iPhone that also tethers. I would also like a mobile AirPort in each of my cars.

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